Are you an Apple or an Android person? This common question underscores a fundamental truth to how consumers buy and choose hardware and services online today. To the big two players we might also add Amazon and Microsoft, as the purveyors of what an Accenture report out today calls a “superstack.”
The consulting firm dubs the combination of hardware (even down to the silicon) and operating system as well as services and software a “superstack.” The focus of the report is the spread of this “superstack” concept from the mobile and consumer world over to the enterprise, especially as it relates to cloud services. But the concept hit me at a personal level, especially since yesterday I received an iPad for Mother’s Day. My first reaction was tepid since we already have an iPad and I don’t buy my content from Apple or use its services. (Seriously I have gone at least four years without remembering my iTunes password, and only my recent receipt of a MacBook Air with the Mac App Store forced me to finally get back on board and update my credit card.)
Instead I’ve spent my time on Google’s Android “superstack” and buying and keeping my content on Amazon’s “superstack.” Apple’s place in this universe was as a provider of beautiful, lightweight hardware with a battery that lasted for almost a whole day. But with the iPad I’m suddenly back in the position where I have to make an effort to move my Amazon content off its cloud and onto my hard drive and into iTunes if I want to consume it on the iPad. And on the movie front I can’t actually download content from Amazon or Google Play, and must go to the Apple store.
Suddenly I’m stuck having to ask myself what movies or music or apps do I want to use or play and then decide the device I need in order to play them. And that is the truth of the superstack. The entire point is to circumvent the openness that the Internet and the digitization of content has enabled and once again lock consumers into a single platform for their content determined in part by the hardware they choose. And yes, I am aware that I can spend time transferring unprotected content between platforms and can download apps to help me use Gtalk on a Mac for example, but for many consumers this is too much: consumers trade convenience for choice.Superstacks are everywhere in the new economy.
And it’s not only happening at the device and cloud layer. The creation of “superstack” services, where one predominant player controls an entire field, occurs all over the web today. There, the tools for lock-in aren’t agreements struck with content owners and different OSes, but access to data and the limits placed on APIs. For example, your attention is Facebook’s most valuable asset, so it strikes deals to let folks access it and can play kingmaker for a variety of apps. Meanwhile and Twitter guards those who can access its API well. And there will be plenty of others rising up to own various platforms on the web in travel, payments, games, coupons, etc.
There’s another large area where superstacks are developing, which I find to be the most problematic, and that’s between the Internet providers and the content industries. So Comcast’s ownership of NBC-Universal and its access to Hulu is troublesome. Even if an ISP doesn’t own a content company directly, the ties and influence the pay TV side of their business exerts over its broadband access business can be a problem. That’s why companies such as AT&T, Cox and Charter are joining Comcast in implementing broadband caps.
Somehow, we’ve moved from locking customers into proprietary systems using hardware as was done in the old Bell and IBM days to building proprietary systems using operating systems, control over data and access to content. As is generally the case, the consumer tends to value convenience over choice, until the choice outside the walled garden looks better than what’s inside (see TiVo). The challenge for any of these companies is to make sure it’s options still appeal to consumers even if it means co-opting the innovations occurring outside the wall (again, see TiVo and video on demand), while building its walls as high as possible.
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