Marketwatch just ran an interesting article that quoted Eric Schmidt on the current winners and losers in the technology market. Describing Google as one of a “gang of four” that also includes Apple, Amazon and Facebook, I believe he’s accurately captured the core companies that are the driving force behind consumer technology.
Microsoft, When they were the Rebels
Why isn’t Microsoft in the list? I imagine that Microsoft’s failure to become a leading consumer technology company will be the subject of many business school studies in years to come. Microsoft had absolutely everything going for it, yet seemed to make mistakes at every turn. For example, they have the Xbox–an amazing device that plays games and delivers on-demand movies and music to your living room. When I was asked to meet with Microsoft last year, to advise them on areas where they could improve, I told them exactly that; the Xbox had the opportunity to be the center of a wide-ranging strategy, but instead it is just a device used by “gamers.” Whereas they had the opportunity for a paradigm-shifting product like the iPad, instead they choose to focus on integration with other marginal products (Microsoft’s forced integration of the Xbox with Xune was almost a disaster, leading to months of poor video download performance–at times rendering it unusable).
Where Apple succeeded was to have the courage to deliver new products to market that were unshackled by the past. The iPad and iPhone were successful because they didn’t attempt to integrate MacOS–instead creating a new platform and a new means of software distribution. Meanwhile, the success of these products enabled them to double-down on their investment in portable computers, which has enabled the Mac to flourish as a standalone device–not forced upon consumers through technical interdependencies.
Google’s success in search has given them enormous resources to make a wide range of experiments. One of those experiments–Android–is now paying off in a huge way, and made one of the smartest acquisitions in history when they took over YouTube. However, Google has also struggled to make many of its consumer products relevant. They were early to the social networking market (Orkut) but ceded the opportunity to Facebook (and even Myspace, in earlier days), failed to leverage their market reach to overcome Twitter with Buzz, and couldn’t manage to turn products like Wave into anything people cared about. On the other hand, maybe that’s just how things need to be: to accomplish the big wins like YouTube and Android, Google is just going to make a lot of mistakes along the way.
Steve Jobs, Top Entrepreneur of the Last 30 Years?
Beyond Apple’s willingness to create new platforms, they’ve also shown an ability to embrace exactly what consumers want to do with their devices. Games are now one of the most successful product categories on iOS. Likewise, although Facebook is too new to know whether they’re platform will endure for another decade or more–they’ve also shown a willingness to go where the consumer demands, by embracing games as a profitable product category.
Where will these companies need to be careful in the future? Where’s the room for new upstarts to break-in, and become the Facebook and Googles of tomorrow? And what can be learned from where Microsoft went wrong? These are questions we’ll all be debating for years to come–if you have any thoughts, please post them on Twitter or in the comments here!
