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FeibusTech Blog

The Death of 'Open'

Mike Feibus

 

When this century’s platform war first flared up, it had all the trappings of a sequel to the epic battle between Macs and PCs.

But don’t get sucked in. The current struggle between Apple, Google and Microsoft is nothing like the quaint conflict between an open and a closed system. On the contrary. In this war between the smartphone and tablet platforms, it appears that all comers agree on that issue: it is better to have a closed platform.

That plops a lot of power into just a few hands. On a closed system, the platform provider takes on the role of middleman, lodged between us and the content we consume and the stuff we buy. At a time when internet usage is shifting rapidly to smartphones and tablets – combined, they’ve already overtaken the PC in the US, according to a recent survey – this has wide-sweeping ramifications. For consumers, it might mean fewer choices and higher prices. For internet shopping outlets, it could translate into lost sales as the hardware hinders the direct line of communication you have with your customers. For Intel, Nvidia, QualComm, TI and other mobile silicon providers, it means you will need to offer an entire platform solution to compete.

Amazon, are you listening? Obviously, you are. That’s why you have your own line of tablets. And why you’re expected to come out with your own branded smartphones. It’s not a stretch to think that Amazon is developing its own OS. If I was Amazon CEO Jeff Bezos, I’d already have signed the check for that investment.

The titanic platform battle now underway more closely resembles the early days of consumer Internet connectivity than the decades-old conflict between Mac and PC. Indeed, the playing field looks more like the arena that hosted the battle for our eyeballs – that’s what they called page views in those days –between companies like AOL, Yahoo and Prodigy.

They sold proprietary, pre-packaged Internet experiences. And it worked for a little while. But as the Internet matured – and consumers along with it – they got left behind. In a sense, the old guard was peddling peepholes through a three-foot-high wall. Consumers quickly learned that they could just look over the wall without them. So they did. In retrospect, it’s astounding that they remained relevant for as long as they did.

This century’s combatants have a far better chance of succeeding because they have much more control over your portal to the internet. You couldn’t buy an AOL computer. Now, though, you can buy an iPad, with a crafted internet experience that includes a direct line to the music Apple sells, for example.

Indeed, Apple isn’t really a hardware supplier any more. Today, Apple is a content distributor. And the hardware is just a means of delivering the content.

In that sense, Apple has leapfrogged the level of power and control that record labels once enjoyed. Imagine what Columbia Records, EMI or Elektra could have accomplished if they also designed and sold us our stereo equipment.

So the issue of open versus closed has been settled. ‘Open’ lost.

Increasingly, the big players are adapting to this new world order. It helps explain why Microsoft isn’t allowing competing browsers on Windows RT tablets. And why the company is developing Surface, its own line of branded RT tablets. And why it’s only allowing a few system vendors into the fold.

It also lends credence to the speculation that Google may begin to focus future Android development on Motorola Mobility now that that acquisition is consummated.

For all their newfound power, though, there are limits to how much Apple, Google, Microsoft and – one day, maybe – Amazon can exploit it. They are still operating on the worldwide web, after all, the same wide-open connected platform that proved to be AOL’s undoing.

Consumers will pay a premium for convenience, and that’s the opportunity that smartphones and tablets afford the platform gods. It’s why 7-Eleven thrives.

There are limits to that, as 7-Eleven knows all too well. We’ll only pay so much more for a carton of milk at a convenience store. Price it too high and we’ll just put the carton back and head off to the supermarket.

Today, our browser functions as the equalizer, the great supermarket in the sky that keeps the convenience store operators honest.  But that leverage fizzles once the platform provider closes off and controls everything from your hand to your head. Apple is already there. Microsoft and Google are close behind.  And Amazon looks like it may join the pack.  

We still have an open Web.  But when it comes to mobile, it's so far looking like any countervailing open alternatives are DOA.  Without them, consumers and companies alike are facing a dim prospect -- paying far more and settling for far fewer choices.