The idea of building a technology platform and watching developers and customers flock in large numbers has been out there for a while. Microsoft, for one, is a paragon of platform-building. It got far ahead of its competition with Windows and has been enjoying life with no serious challengers for well over a decade.
These days a software platform is no longer just the “traditional” desktop platform, and the competition gets stiffer by the day. Platform battles are raging in such markets as mobile applications, Web 2.0 software and cloud computing.
One of the most powerful weapons in the platform owner’s arsenal is an application store. App stores (and their corresponding platforms) have two peculiar characteristics: lock-in and network effects.
Once consumers commit to a particular platform, they also commit to a particular app store. In other words, they become locked in. When you buy an iPhone, you cannot download applications from Windows Mobile Marketplace (whether you would want to do this is of course a different question).
Network effects is the virtuous cycle of “more developers—more customers—more developers,” ad infinitum. Platform owners have every interest in attracting more developers with fun apps, which would help them attract customers to their platform, which in turn would attract even more developers.
Distributing software through app stores is good for all the parties involved: the app store owner, software developers and consumers. The owner gets a share of all the money flowing through the store. Software developers incur much lower distribution costs and can hope for greater visibility of their products. Consumers have a one-stop shop for software and benefit from lower prices, especially for products where competition among developers is tight.
And after the success of Apple with its app store, such stores have proliferated. Here are just some examples from different markets:
- “Traditional” desktop software: Apple Store, Windows Marketplace
- Web 2.0 software: Google Wave App Store (announced just this week), Facebook Platform
- Mobile devices: Apple’s App Store, Nokia’s Ovi Store, Android Market, BlackBerry App World
- Mobile operators: Telefonica’s mstore, Vodafone 360
Mobile operators are actually the odd ones out here. Their “platform” is the mobile network. And you cannot build applications that would be exclusive to a particular operator’s network because all networks generally have the same functionality. A web browser in your phone works on AT&T, Telefonica, Vodafone, Verizon or pretty much any other network. So these are not platforms in a real sense. The reason operators got into the app store game is to give customers a unified shopping place and to not let the likes of Apple get all the profits from app distribution. (And operators haven’t been successful in catching up with the most innovative device manufacturers yet.)
Does all this have any lessons for companies figuring out which cloud platform to pick? It probably does.
- There will be more app stores than platforms on the cloud. Some app stores would differentiate themselves by platform (for example, the Facebook app is available at the Apple’s, Nokia’s and BlackBerry’s stores). Others will achieve lock-in by targeting an exclusive population. For instance, the US government has just opened its own cloud app store, apps.gov, which is only available for government agencies.
- The platform’s approach to innovation and its openness seem to predict its prospects well. Pursuing even one of these factors is good, but being bad at both spells trouble. Apple is big on innovation; Android on openness. Nokia seems to be too little, too late on both and its market share is declining steadily.
- There is likely to be specialization among platforms. For example, BlackBerry caters primarily for the needs of the business community. Its app store does not even have a games section. Compare that to the Apple’s store, where games usually make up over half of top downloads. On the cloud, Amazon seems to be mainly targeting business applications.
(By the way, if you are struggling with the concept of cloud computing, take a look at this entertaining video.)
What do you think? Have you ever found yourself being locked into a particular mobile platform? Do you think the story of mobility is a good guide to cloud computing developments? Please share your thoughts with the Face IT community in the discussion.