Friday, September 12, 2008

Suddenly, It's All About Network Connections

Of late, there have been a lot of discussions about network connections of different kinds. They all point to framing strategic opportunities and challenges from a network-centric points of view.
1. Mobile App Stores. Apple, Google and Microsoft are jockeying to get third-party developers to write applications on their mobile platforms. All three have mobile application stores with different names (naturally!). Not be left behind, RIM announced relationships with TiVo, Ticketmaster and MySpace.  It will be interesting to see how Handango responds to these recent shifts. Till now, Handango served as a multi-platform aggregator of applications.  Its role is now challenged by each of the major mobile companies seeking to establish their own proprietary app strore.

2. Yahoo opens up.  The battle between Yahoo and Google continues despite their attempted relationship, which may be running into problems.  Yahoo is striving to create the platform so that third-party widgets can be created to enhance its services.
 Yahoo plans to open up more with the first major redesign of its home page since May 2006. The changes will enable Yahoo users to plant more mini-applications known as "widgets" on personalized versions of the home page, said Ash Patel, executive vice president of the company's audience product division.
WSJ is reporting that:
On Friday, Yahoo is hosting a "Hack Day" for developers to start building versions of their service that integrate with its home page or that can be used by Yahoo Mail's 275 million monthly users...... [and....]
Scott Moore, head of Yahoo's media group, said Yahoo's media sites, which include heavily trafficked staples like Yahoo Finance and Yahoo News, have strong track records of drawing on outside content but see opportunities to expand. "We are not just doing this open thing because it is the flavor of the month," he said. "This open approach is really in our DNA."
3.  Apple iTunes patches things up with NBC.  When Apple launched its new Nano earlier this week, it also announced that it was patching things up with NBC.  As reported in NY Times,
Mr. Jobs also announced that NBC, a division of General Electric, was bringing its television lineup back to iTunes, 10 months after the two parties clashed over how much flexibility NBC would have on the pricing of new NBC programs. Both sides now say they got what they wanted. Television shows from NBC and other networks will all cost $1.99 for standard video quality, and $2.99 for high-definition video quality. Older shows like “Kojak” will sell for 99 cents...... [and..]
Mr. Jobs said in an interview that the resolution came through personal discussions with Jeff Zucker, the chief executive of NBC Universal. “We both knew we wanted to get this together, and our mutual customers wanted us to get this together,” he said. “They let us know, we worked it out, and everyone is happy.”
These three examples tell a lot about the challenges of developing winning strategies in the network era.
1. The criticality of attracting key developers as complementors to platforms. The mobile applications is now a major battle front and all the key companies are seeking to attract complementors. What is important is to see who links preferentially to one platform like iPhone compared to another.
2. Yahoo (somewhat belatedly) is opening up its platform. Perhaps it lost some valuable time because of the deal/counter-deal with Microsoft but its value hinges on how vibrant its third-party community becomes in the coming months.  It is not just competing againt Google and Microsoft. It is competing against Facebook and MySpace.  The one way that Yahoo can survive and be counted is if it attracts the requisite number (and exclusive) applications that make Yahoo a must-visit destination site. If that happens, Yang would have succeeded and its stock might be re-energized.

3. The NBC-Apple reengagement shows the criticality of mutual dependence. NBC needs Apple and Apple needs NBC and they have to mutually work out their differences.  And they have done so.  Often such skirmishes derail successes and both companies do not recover. It is refreshing to see that these two have worked out their disagreements. 

Tuesday, September 9, 2008

Microsoft's Ad Campaign: Not Just for End-Customers but for the Ecosystem

The Fall seasons opens with a new advertising campaign.
At a first blush, one may think this is just about getting end-consumers to not give up on Windows, That is partly true. It is equally about keeping its business network (ecosystem) excited and committed to the Windows platform.  We have come a long way from the tight network of Wintel (Windows and Intel) architecture embraced by companies such as Dell, HP, Sony, Adobe and others.  Intel chips power Macintosh computers. Sony competes against Microsoft. Dell and HP are looking for ways to add their own flavor to their branded machines. 
Business Week ran an interesting story recently about the activities within HP. 
HP's "customer experience group"—formed nine months ago and headed by vice-president Susie Wee, a former director in the company's research labs—is developing software that can complement Microsoft's Windows operating system to make it accessible to more users. Wee's team is tackling touchscreen technology and software that lets users circumvent Vista to watch movies or view photos, as well as transferring ideas from HP's Halo videoconferencing system to mass-market products. "Our customers are looking for insanely simple technology where they don't have to fight with the technology to get the task done," says Phil McKinney, chief technology officer in HP's personal systems group. "For us, it's about innovating on top of Vista."
 It went on to say that:
Others in HP's PC division are exploring the possibility of building an HP operating system for mainstream desktop and notebook computers based on the open-source Linux system, which competes with Windows, say people familiar with the company's plans. The goals may be to make HP less dependent on new releases of Windows, and to strengthen HP's hand against Apple, which has gained market share with computers that boast innovative features and inspire a loyal following of users. 
This points to the inevitable tension about the roles of different entities in an ecosystem over time. During 1995-2005, Microsoft and Intel orchestrated the ecosystem and others played supporting complementary roles.  Dell and HP were happy to ride the wave of network effects enjoyed by the Windows platform--acting as 'branded resellers' of Wintel machines (assembled through Asian contract manufacturers).  Now, that Vista has received rather lukewarm support, they are examining ways to create differentiation on top of Vista.  If that differentiation sticks, then they can run Linux or any other variant. If that differentiation is marginal, they are consigned to be branded resellers within the Windows ecosystem. 
Networks are dynamic and roles continually shift and evolve. Examining alternative trajectories of network evolution is key to crafting winning strategies for the network era.

Friday, September 5, 2008

Reflecting on Amazon's VOD Initiative

So, we now have a new alternative to Apple iTunes, Netflix and Hulu. Amazon has launched its video on demand service. It will stream to Windows, Macs, Sony TVs with Internet conenctions, TiVo devices as well as Xbox 360. Now, we will have to wait till next Tuesday (Sept 9) to see what Steve Jobs will announce to further shift the goal-post.
From a network-strategy point of view, what's key is how well does Amazon orchestrate multiple networks? So, I am interested in the following indicators besides the obvious one about pricing and advertising-supported subsidy.
1. How extensive is Amazon's content library?
2. How exclusive is the content? (What content--if any--is only available here?
3. What content is not available? (for example some of the NBC shows are not available on iTunes because of prior contract disputes)
4. How sticky are Amazon's customers with this service compared to being part of two or more services?
Then, there is the technical issue of seamlessly moving content across multiple devices within home and portability of content (cell phone, laptop etc.) without violating digital rights.  The media and entertainment network is changing fast and Amazon's initiative is significant because of its distinctive recommendation engine.  Sure, Netflix is good at recommending possible movies that may interest me. But, Amazon may be able to do across all my purchases and interactions on its website. Google may be able to recommend based on my broader searching profile and so on. So, what will Apple do to close this gap?   Apple has clear design lead but how good is it in recommending movies? I have not seen a good systematic comparison of the different recommendation engines but winners in the converged network will have distinctive advantage based on consumer preferences and habits....

Wednesday, September 3, 2008

Reflecting on the Scorecards on Multiple Wars Underway

Just reflections on the scorecards on multiple wars underway--not in Iraq or Afghanistan or Georgia. I mean the wars relating to (1) search; (2) browser and (3) mobile apps.  These three wars (and related ones) will define--in the short term--who will dictate and specify the rules for winning in the network era. 
The Search Wars: Advantage, Google.  Yahoo and Microsoft are behind but hardly threatening Google for now.  But as search morphs and evolves with social networks, Google may face competition from Facebook, MySpace and others. 
The Browser Wars: Advantage, Microsoft. Microsoft's Internet Explorer is the leader, by far. Firefox is catching up and Apple's Safari is a distant third. Apple is trying to get Safari into Windows through iTunes but that is not gaining much traction.  Now, Google has launched Chrome, which redefines the battle.
The Mobile Apps War: Advantage Apple. Apple led the way with third-part applications on the mobile phone with its App Store. This is the strategy that Microsoft has followed successfully with Windows and Office but has not somehow followed it in the mobile arena till now.  Google has followed suit with Android Market and Microsoft has SkyMarket to support the Windows Mobile 7 platform.  Will RIM--makers of Blackberry be far behind?  
The three wars are all connected to the broader shift about how we search, access, consume, transact, share and store things on the network.  Moves by these companies and others are worth tracking and watching to understand the pattern of evolution and shifts in competitive positions.

Monday, September 1, 2008

The New Front on Google-Microsoft Battle: Browser-Wars

WSJ is reporting that Google is launching its own browser, Chrome.  Specifically, the WSJ article notes that:
Google executives have expressed concern that existing browsers might fail to support the sort of new Web-based applications they want to develop as they seek to expand the company's influence beyond search. By building its own Web-browsing software, Google is ensuring that it will have a platform for its Internet services that needn't conform to other companies' standards.
Microsoft and Google battle each other in Internet search and in applications. Google leads in search while Microsoft is the leader in the applications with its Office Suite.  They also fight in the mobile OS arena with Microsoft spearheading Windows Mobile while Google is orchestrating its Android OS ecosystem.  
One may have thought that the browser war is long-over but it is not as it continues to be an important part of the tecnology architecture shaping business strategies and practices in the network era.  Apple is slowly making Safari important not only for its  Macintosh computers but also for its iPhones.  It will be interesting to see the link between Chrome and Android. Here's a link to the comic book that explains Chrome.  This is a quick overview video.
The following paragraphs from Google's blog provides some more details--mainly their rationale to create their own browser to maintain their distinctive edge in related areas. 
All of us at Google spend much of our time working inside a browser. We search, chat, email and collaborate in a browser. And in our spare time, we shop, bank, read news and keep in touch with friends -- all using a browser. Because we spend so much time online, we began seriously thinking about what kind of browser could exist if we started from scratch and built on the best elements out there. We realized that the web had evolved from mainly simple text pages to rich, interactive applications and that we needed to completely rethink the browser. What we really needed was not just a browser, but also a modern platform for web pages and applications, and that's what we set out to build.

On the surface, we designed a browser window that is streamlined and simple. To most people, it isn't the browser that matters. It's only a tool to run the important stuff -- the pages, sites and applications that make up the web. Like the classic Google homepage, Google Chrome is clean and fast. It gets out of your way and gets you where you want to go.

Under the hood, we were able to build the foundation of a browser that runs today's complex web applications much better. By keeping each tab in an isolated "sandbox", we were able to prevent one tab from crashing another and provide improved protection from rogue sites. We improved speed and responsiveness across the board. We also built a more powerful JavaScript engine, V8, to power the next generation of web applications that aren't even possible in today's browsers.

This is just the beginning -- Google Chrome is far from done. We're releasing this beta for Windows to start the broader discussion and hear from you as quickly as possible. We're hard at work building versions for Mac and Linux too, and will continue to make it even faster and more robust.
In network-era, the scope and shape of competition continually evolve. The playground is far from static. What will Microsoft do next?  And, will this further cool the historically strong relationship between Google and Apple?