PICKING LOCKS by Michael S. Malone
One of the most frustrating features of the current era in high tech – that is, the years since the bursting of the dot.com bubble and 9/11 – has been the comparative lack of competition.
Part of the fun of being an observer of the tech revolution all of these years, particularly here at Ground Zero in Silicon Valley, is the epic human frisson that comes from really brutal market competition: the companies stealing each others’ employees (and sometimes their technologies), the rich and famous who lose their cool in public, the unforgiveable slights and cuts that take place everywhere from cocktail parties to industry conferences, the companies that sweep the table and the companies that bet it all . . .and go down in flames.
This is the Silicon Valley I love, and it was at its best in the late ‘60s (when Fairchild blew up and the scores of new chip companies fought to the death), in the early ‘80s (when the personal computer boom surfaced maniacs like Steve Jobs and Bill Gates), and, as noted, in the late ‘90s, when everybody became a paper millionaire overnight and went insane in the process.
Unfortunately, the last few years – the Web 2.0 years — have been comparatively dull. Sure, there have been a lot of great companies created, fortunes made, and some of the greatest consumer products in tech history introduced. But somehow the big companies, old and new, seemed to slipped right past each other. They’ve carved out spaces of their own and rarely tread upon each other’s turf.
Even the few outright collisions have been oddly anticlimactic. Hewlett-Packard and Dell were supposed to duel to the death over the PC market – until Dell shot itself first. Facebook and MySpace seemed destined to collide over the social network world – until MySpace unexpectedly became the land of the pervs and the uncool. Then there was Google v. Microsoft v. Yahoo – but Google won almost on the first day, Microsoft acted its usual boring self, and the only entertainment was how badly Yahoo would be managed until it finally cratered. Meanwhile, Apple’s offerings, from iTunes to the iPod to the iPhone, were so revolutionary that they created their own competition-free spaces.
All that was good news for a lot of people, including us consumers. But it sure wasn’t very exciting watching all of those corporate gentlemen bowing and nodding and politely insisting that the other company go first. And, who knows? All of that solicitous behavior may has cost us all some of those great products and inventions that only appear when angry competitors throw all caution to the wind and head for each other at ramming speed.
In all, the last seven years of high tech can be characterized as a dozen or so major companies, each with a lock on their marketplace, and each doing their damndest not to interfere with each other’s success.
But not, refreshingly, those locks look like they are about to be picked.
Everywhere you look right now, companies are moving fast to step on each other’s turf. And when I say fast, please note that almost none of this had surfaced even three months ago – and now almost everything seems to be in play.
For example, take Google. Almost everybody in tech (and a lot of other industries) has burned with envy about that company for most of this decade now. The media world feels as if it was played for a sucker early on by giving Google the keys to its advertising business . . .and never getting them back. Other companies in the search business are cross-eyed with resentment that Google quickly raced to a lock on that business and has never let it go. And everybody else in tech hates Google because it is just so damn successful . . . and so cocky about it.
Six months ago, it looked like Google could go on owning these markets forever, with scarcely a contender in sight. Now they seem to be popping up everywhere. First there was Stephen Wolfram’s Alpha, which wasn’t quite the pure search engine it was predicted to be – but nevertheless a very intriguing (and perhaps influential) new way of thinking about the search paradigm.
Then, seemingly out of the blue, decadent old Microsoft managed to rise from its gilded couch . . .and rediscover a kind a second youth with its introduction of its own new search engine: Bing. And Bing isn’t just another classic Microsoft me-too product: it’s really pretty good. In fact, it could even be better than Google. Try it – you’ll be impressed.
So, suddenly, Google, until now apparently so secure in its position, is getting a serious assault on its core business. And that’s just the beginning; because Google’s real business strategy has always been to control the flow of information on the Web. It’s been a brilliant strategy, but now it too is under assault.
That challenge is coming from Twitter. Even a couple years ago, Twitter wasn’t much more than a cult product, a novel little Web app used by a few thousand insiders. Well, I don’t have to tell you what’s happened over the last six months. Twitter, it goes without saying, is the hottest tech company in the world right now – and its story is just beginning.
But what has been scarcely noticed by the general public, but strikes fear into the heart of both Google and Facebook, is that Twitter represents both a new kind of social network and a new information stream that neither of those giant firms can get their hands on. That’s why Google’s Eric Schmidt is publically bad-mouthing Twitter even as he ponders buying it, and Facebook’s Mark Zuckerberg is racing to put Twitter-like functions on his site. But, in yet another irony, it’s now Twitter’s turn to have a lock on its market.
However, don’t cry for Google. Because even as it is being challenged in its core business, the company is racing to attack other historic technology locks on two new fronts.
The two greatest locks in the high tech world are the Microsoft Windows operating system and the Microsoft Internet Explore Web browser. Except for some niche products (the Apple OS and Firefox, for example) that sometimes seem to exist only as the not-Microsoft products, Microsoft has essentially owned these giant businesses for decades now. They have made the company (and its founders) hugely rich in the process, and are about as close as you can get to a permanent monopoly in the tech world. And yet, even these locks are being picked – this time by Google.
Google’s open source Android operating system for smartphones has always been thought of as the company’s iPhone killer – its way of spearing Apple’s Steve Jobs in his historic weak spot: his unwillingness to give up control. And indeed Android is just that – though it’s got a long ways to go to catch up with Apple’s huge lead. But nobody saw this coming: this week, two Taiwanese computer giants, Asus and Acer, announced two new netbook computers running Android as their operating systems. And even more amazing, they also announced that these computers would run that operating system on energy-saving, cell phone-type ARM processors rather than the standard Intel Atom chip – thus breaking the other great lock in the high tech world. HP and Dell are reporting looking at similar products.
And that’s just the beginning: this week Google also began previewing ‘Wave’, a new application for managing and organizing personal Internet activities that essentially makes it possible for the user to do away with both the browser and e-mail . . . in other words, goodbye Internet Explorer and Outlook.
So far, other than Google’s Android attack, Apple Computer seems the one outfit immune to all of this. But don’t be too sure: from the interesting new Microsoft Zune 2.0 to the Palm Pre, the competitors are swarming, just waiting to see if Apple loses a step after Steve Jobs’ ‘departure’ and uncertain level of ‘return’.
Meanwhile, we haven’t even talked about a re-organized, resurgent Yahoo. And who is waiting in the wings to take on those other two long-standing locks: Amazon and eBay?