post

Just look at the signs…

Lots of speculation about Eric Schmidt (Google CEO) joining Apple’s board. Articles by John Markoff in the New York Times, John C. Dvorak writing for Marketwatch, along with a spot-on counter opinion to Dvorak from Dana Blankenhorn, all look at this from a variety of perspectives.

No one really knows.

Instead of trying to look narrowly at the aspects of the Schmidt announcement and the possibilities surrounding an Apple-Sun merger (and whether or not it alone makes sense), it’s more useful to stand back and observe as many signs as possible occurring simultaneously worldwide:

  • The desktop operating platform as the core of your computing experience is over. Observers smarter than I am have taken a macro, global look at the internet and are now clearly agreeing on the internet-as-a-platform (Dion Hinchliffe has, in my view, the best blog out there on the subject and wrote this great article you should read to understand more).

Tim O’Reilly, head of O’Reilly & Associates, wrote the seminal article on Web 2.0 (and coined the term) which is a must-read along with this OpenBusiness interview if you’d like to understand the forces driving internet-as-a-platform.

  • As further evidence of the increasing dilution of server operating system dominance, Linux is gaining a global foothold. With the acceleration of internet-as-a-platform and companies (like Google) running their business on Linux, Apple has to be looking at the future of their business as one that will be increasingly dependent upon internet-centric services and not just focusing on desktop-centric operating systems.

Recent experiences I’ve had with the Ubuntu Linux distribution have been nothing short of stunning in this distro’s elegance, ease of installation and use, and design. Since most hosted Web service offerings are FINALLY (and mostly) browser and operating system agnostic, developments like this just provide more options for access and make Apple’s (or even Microsoft’s) focus on desktop operating systems increasingly irrelevant.

  • Remember when Google hired Vint Cerf (father of the internet)? No question this was about global internet architecture, offense and defense around regulatory and global internet politicking and positioning Google correctly and strategically.
  • Speaking of our pals in Redmond, why do you think Ray Ozzie is the primary thought leader and technology head? He totally and completely groks what is happening globally and is probably better suited than anyone there to figure out how to leverage what Microsoft can do and position the company to dominate certain on-ramps (like tools and servers) to this internet-as-a-platform.

Sun totally and completely “gets it” with respect to internet-as-a-platform. Google’s entire business is based upon this new platform and the collective (and global) participation of people who can access their business in an instant. Apple understands human-computer interaction better than any other company in the world and is (arguably) in the perfect position to be THE on-ramp for people accessing internet services regardless of device (and the only prediction I’ll make is that Apple will accelerate their expertise delivering it in a multitude of devices like phones, tablets, enhanced iPods, etc.).

I remember how filled with glee many investors were in the late eighties and early nineties when they finally understood the gross margins Microsoft enjoyed. Heavy investment up front and laughingly low replication costs downstream. The internet makes this value proposition even more attractive since the cost of transmitting bits is considerably less expensive.

That’s why Apple needs Eric Schmidt and why their business must be internet-centric going forward. Whether they need to merge with Sun to make that happen will remain to be seen.