Everybody was talking about it in 2006…

When did it become clear to you that the browser will be more important than the operating system?  Beneath the AJAX and pretty colors, this was seemingly the underpinning of Web 2.0.  But when did people really start talking about the internet as a platform?  As far as I could remember, the idea was popularized right around when Google acquired Writely and turned it into Google Documents in 2006, and fully solidified when Facebook launched its platform in 2007.

The visionary in hindsight

…but did anyone see this earlier? I mean…way earlier?  Like 1995 early?

What do you suppose was going on in Bill Gates’ head when he said that Java “scares the hell out of me”?  Looking at Microsoft’s aggressive Internet Explorer and Java strategy in the following years, I believe his vision of the internet must have been frightening accurate: that “write once, run anywhere” will erode the relevance of host operating systems, leaving them dumb interfaces good only for controlling hardware.  No wonder he fought Java so hard, and mobilized Microsoft’s A-team to rework IE from the ground up for the big 4.0.  (IE 4.0 was the money shot to to Netscape)

It’s not surprising that he would have this insight.  After all, Gate’s is widely praised for the vision that it is software, not hardware which will command the most profits as soon as hardware makers commoditize themselves by adopting the IBM-PC standard.  He knew this while the big boys were still drinking the hardware koolaid.

Wait…but that was software killing hardware.  What does that have to do with web services killing software?

The fear of openness

Lets dig deeper into Gates’ first insight.  Hardware wasn’t always divided between Mac-vs-PC.  The PC standard is actually what was originally the IBM hardware platform, amongst many other hardware makers with their own incompatible specs.  As IBM PCs grew to dominance in the early 80s, they also had the best range of software, many of which developed by IBM.  To piggyback on this advantage, other manufacturers soon adopted the “IBM-PC Compatible” spec (remember those stickers?).

This is the event which commoditized hardware, and made software the differentiating factor.  The moment hardware opened up, it handed its pricing power to software—a vertical shift which I believe was the fundamental force behind the Windows and Office cash cows.

But now the same thing is happening to software.  The rise of cross-platform browsers and web standards didn’t just make the lives of web developers easier; it commoditized software, and made web services the differentiating factor.

We are sliding along a gradient.  As downstream products demand openness from the upstream platforms on which they sit, they also commoditize the platform and thereby yank profits from upstream.

What do you think happens when Facebook-MySpace-Bebo become inter-compatible, and embrace unfettered data potability?  People stop caring which social network they’re on, and the platform applications become the killer apps, in other words, the differentiating factor.

I think this is the fundamental reason why strategists are weary of openness, and explains Facebook and Apple’s “evil walled garden” behavior.  Openness and interoperability has dethroned the last two kings of technology: IBM then Microsoft.  If I were them I’d say openness “scares the hell out of me” too.