[Disclosure: Microsoft is a client of the author.]
This week Microsoft announced that Apple’s iCloud app would be available in the Microsoft Store. At face value, this isn’t really a big announcement…more along the lines of “dog bites man.”
For some time now, Microsoft has defined itself by being open and focusing on interoperability. And while Apple hasn’t exactly embraced competing systems like they did when Steve Jobs ran the company (after all, the Apple watch is simply a wearable iPhone), putting their stuff on Windows PCs isn’t new, either.
[ Further reading: Review: Office 2019 is the best advertisement yet for Office 365 ]
It got me thinking about the evolution of the computer, a history in which we’ve largely focused on the hardware. Mainframes to PCs to client/server to smartphones…and, finally, to cloud. But what if we looked at the evolution regarding vendor behavior instead? I mean, if you think about it, the behavior around smartphones (initially) and mainframes (initially) was highly proprietary and closed. From a user/customer standpoint you were locked in and competition was contained.
But over the last 20 years, the big change – bigger than hardware – was in collaboration, cross-industry standards and interoperability. In effect, perhaps the biggest change wasn’t the move from terminals to smartphones but from being locked into one vendor to being free to choose.
Clearly not all vendors are on this progression path. But those that believe they’re keeping up but aren’t focusing on interoperability and allowing customer choice may soon find themselves locked out of the market as opposed to locked in like they currently believe.
The power of interoperability and competition
What the Apple/Microsoft announcement reminded me of was a meeting I had with some Microsoft executives early last decade regarding a European Commission demand that Microsoft open up its operating system interfaces. Microsoft was resisting and laughingly saying they were going to open up the interfaces, but they were going to charge exorbitant amounts for that access and really screw both their competitors and the commission.
Frankly, I thought they had lost their minds and asked if they thought the commission was staffed by idiots, implying that the EU’s likely response would be catastrophic for them. Fortunately, they realized their mistake and instead began a pivot that took them from avoiding interoperability to becoming a leader in it. And rather than going under – which was a real possibility when you go to war with a government – they are now a challenger for the most valuable company in the world again.
Rather than being a negative, interoperability became a true positive. Interoperability became a foundation for their cloud effort, because an all-Microsoft cloud would likely have failed and not become the success that Azure is.
Competition, rather than something to be avoided, shifted to something to embrace and get really good at. Microsoft learned (granted, the hard way), that competition drives advancement and advancement drives survival. Because, if you don’t advance, you tend to die (often as a result of becoming some government’s project…such as what happened to RCA).
A change in mindset
So, it seems to be that the bigger change isn’t the evolution in hardware because – regardless of whether you were on a terminal or a smartphone – initially everything was closed and tied tightly to the vendor. Shifting between BlackBerry, Palm or Microsoft Phone was anything but easy, but it was merely a change in mindset. And that’s what allows Microsoft to accept iCloud, without reservation, into their store without blocking it as a potential threat to Azure.
So, the mindset has gone from lock-in and control, to one of open technological borders and a focus on advancement and keeping the customer happy. Vendors realized that unhappy customers could overcome lock-in and change brand (and product) loyalties. Microsoft saw this with the shift to Linux. And rather than fighting Linux, they embraced it…and they’re embracing Apple as well.
They know that if they have open borders and a better place to live, people will move to them. And if Microsoft remembers that focusing on locking customers in isn’t as effective as keeping them happy, they won’t move out.
Or, put another way, much like (some) governments learned that huge walls aren’t as effective as making the country a great place to live when it comes to holding and motivating citizens, tech companies like Microsoft have learned that customer satisfaction is the strongest and best way to retain customers. It’s a huge improvement over the old industry standard of lock-in.
The second age of computing
So rather than this being the 5th Age (mainframe, PC, client/server, smartphone, cloud) maybe it’s only the 2nd age (from proprietary to open). And focusing on what the customers want and providing it to assure retention rather than locking them down is the new standard in customer retention.
I expect that in a few years the firms that understand and embrace this change will still be around and those that don’t won’t. I learned when I worked at IBM that lock-in is a company killer. IBM concurred, which is why they, too, became a poster child for open standards and interoperability.
Companies that don’t grok that we are now in a very different world – one that abhors lock-in and loves competition – will likely not be around by 2030.
Or, put another way, freedom is winning…and that is a very good thing.
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