The modern business model from Silicon Valley is build. Don’t just make a computer, make digital products (as Steve Jobs said by launching a music player, then a music store, then a phone). Build and build again is what the dominant players are showing us to be the winning formula.
Google was just a search engine, Apple was just about consumer electronics, Amazon was just a bookstore and Facebook was just a social network. No more.
These four colossal companies all appear to want to channel us down their particular funnels and have you ride their own track as you consume all things digital. To paraphrase the eloquent John Battelle, Google used to equal search, now they equal Chrome, YouTube, Android, Docs, Gmail, Maps, Places, Voices, self-driving cars, energy research, Adwords, Google+ and Motorola. And let’s not forget possibly their biggest opportunity for a true golden goose: Google TV.
This Fab Four will make the scale of Murdoch’s empire look about as impressive as a Lego village. Their dominance of technology, media and data over our lives will be insurmountable. Google is expected to bring in more than $30 billion this year. Analysts expect Amazon to reach $100 billion in revenue by 2015, faster than any other company. You need to stand up when you hear Apple’s annual growth numbers: net profit up 85% to $25.9 billion (£16.5 billion). In just Q3 of this year (obviously not their largest without Christmas sales), Apple turned over $28,571,000,000*. Read that number again – it’s genuinely staggering. They sold over 17 million iPhones in their financial Q4!
Such is the significance of the Fab Four, that we barely even think of Microsoft in the same vein. Arguably the largest of them all and the business choice of the world, Microsoft simply isn’t in the running for our hearts and minds like these guys are. They’re in their own cold war with each other, leveraging the juxtaposition of the web in that the low barrier of entry shouldn’t allow such monopolistic companies to exist. Yet again, what shouldn’t be possible, actually proves true online.
Each of the Fab Four want to build an ecosystem. Think about smartphones, tablets, apps, cloud storage, social networking, gaming, music, TV, or movies and all fit into their strategic map of web’s future – their own corner of the web.
I can’t help but think this is taking the open web and making silos for the user. Amazons new tablet, the Fire, doesn’t like you to browse around the web too easily, but if you want to download a movie from Amazon or buy shoes from their marketplace, then that’ll be a piece of cake.
There’s an element of lock in. I don’t necessarily mind that it’ll be a bit stifling, but the decision you make with your hardware may well dictate how easily you can consume software and content in the future.
It’s a bit like choosing to buy a car having the knowledge of exactly where and how you’ll drive it in the future. Suddenly what you buy becomes far more than we’ve traditionally dealt with when buying a laptop or a PC i.e. size, speed and storage.
It’s like buying a new BMW. Not happy just with selling you the metal, plastic and rubber, BMW build a bunch of roads and would very much prefer it if you drove only on them. And they’d like you to use their fuel stations as they’ll hook up with your car far easier than any other (perhaps auto payments through number plate recognition). And BMW have plans afoot to offer you destinations too that will stop you going to the beach or Center Parcs or the shopping centre – the BMW equivalent will be better, more secure and more ‘holistic’ to your vehicle.
It’s hugely exciting to see these guys slug it out on the global scale and change our lives through innovation. It’s a shame none of them are British. Who are you backing to be the winner or can they coexist?
*The numbers and much of the facts came from an excellent post by Farhad Manjoo.