Tuesday, June 19, 2012

Apple has made Microsoft more relevant, not obscured

No, I'm not referring to the latest and greatest Microsoft Surface announced yesterday. No doubt, its  announcement has once again showed Microsoft is at its best when it's the second mover, when it has an opponent to imitate. But this is not what I'm going to talk about in this post. What I want to talk about is something more subtle but fundamental to Microsoft's business model.

At its core, Microsoft is a platform provider. What threatens the commercial viability of a platform most? True portability. What keeps Microsoft executives awake at night is when a copy of software runs exactly the same on any device, any OS. The Java platform was (and still is) one such threat. The threat was serious enough to prompt Microsoft to revamp its rather dated Win32 API with its .Net initiative. But Java wasn't the only serious threat. Another serious threat is the HTML/Javascript open standard (or the current incanation, HTML5). If all applications are browser-based, there is no reason to get a Wintel box. This threat prompted Microsoft to try to crash Netscape by any means and get itself into trouble with the antitrust cases years ago. But even Netscape has disappeared from the scene, the threat is well and alive. Otherwise, Microsoft doesn't have to invest so much resources and money to keep Internet Explorer alive.

But a strategic decision made by Apple five years ago -- and to a less extent, by Google -- has neuralised this threat to some extent.

When Apple released its first iPhone/iPad, it made the decision not to make iOS a pure HTML5-based platform. Instead, in order to develop an application on iOS and take full advantage of the underlying hardware, a developer needs to develop the application on the top of Apple's proprietary Cocoa Touch platform, not HTML5. There are practical reasons for such decision: on a device with limited computing power, maintaining adequate performance is important. However, its true strategic objective is control and lock-in. Apple wants to lock you in on its iOS/Cocoa Touch platform as much as Microsoft wants to lock you in on its Windows/Win32 API platform. When you are the dominant player, you want everything proprietary, everything based on your proprietary platforms. Only when you are the marginalised player, you want everyone to adapt open standards. In a similar fashion, Google has also gone down the same path with Android.

However, I would argue that this supposedly self-serving decision has actually benefited Microsoft. If other dominant players had fully embraced HTML5, Microsoft would have had no choice but to embrace it. Then, no one could lock anyone in. But now, because everyone goes proprietary, the playing field is now leveled in a way that both developers and users won't demand true portability. This in turns has validated Microsoft's "proprietariness". Windows can now compete on an equal footing with iOS and Android for developers.

Actually, if you look at an even bigger picture, the sad truth is Apple's decision has pushed back the advance of system openness by a whole decade.

(Disclosure: Long MSFT)


  1. A developer doesn't need to develop a application on top of Apple's Cocao platform; using html5 is an option. The facebook app is a well known example, and unfortunately it also shows how that sucks performance wise. For many apps using html5 would technologically simply not be feasible. What matters to Apple is not if programs are based on open standards, what they want is to control the publishing channel. Maintaining that control while using open standards wouldn't be a problem I'd say.

    What matters to Apple is not if programs are based on open standards, what they need is to control the publishing path.

    1. Hi Hielko,

      That's insightful.

      But how do you control the distribution of HTML5-based apps which can merely be "webpages" running in the browsers?

    2. I suddenly remember one thing this morning.

      In terms of performance, pure HTML5-based platform is feasible on mobile device. Despite its commercial failure, it has been done before and earned raving reviews: