Applications or Plumbing: The Money Makers for the Internet
July 21, 2009
I recall reading that Google perceives applications as important but secondary to the broader computing ecosystem. The BBC expressed a contrarian view in “Apps to Be as Big as Internet.” The BBC argument advanced by Maggie Shiels is that an executive from GetJar made this assertion and the BBC reported it. Ms. Shiels wrote:
To date, Apple runs the most popular application store with over 65,000 applications. Last week it notched up another milestone with 1.5 billion downloads. Its success was a shock both to Apple and the industry. However, every smartphone company is trying to replicate it, from BlackBerry makers Research in Motion to the world’s biggest mobile phone business, Nokia.
Ms. Shiels includes Google’s point of view. She wrote:
But Google’s engineering vice president Vic Gundotra told the conference that the application store trend is just a fad and that the focus will shift to powerful browsers as the main mechanism for delivering services. “Many, many applications can be delivered through the browser and what that does for our costs is stunning. “We believe the web has won and over the next several years, the browser, for economic reasons almost, will become the platform that matters and certainly that’s where Google is investing,” Mr Gundotra told the conference.
I liked her write up. Several observations flitted through the addled goose’s mind:
First, applications are a subset of plumbing. Without an infrastructure on which to build and deploy applications, applications are dependent. Once the plumbing is in place, software ecologies spring up. The battle to follow, in my opinion, is the plumbing war. He who gets the plumbing gets annuity money.
Second, applications in the aggregate are how people access the plumbing. The challenge for application developers will be to support the “right” platform. Pick the wrong platform and a good application will not make much if any money. The key decision then is which platforms can a developer support. Candidates are Apple’s, Google’s, Microsoft’s, Oracle’s and a handful of others. The platform with the broadest reach into lucrative markets is a key factor for a developer to consider.
Third, search is the essential first step in accessing any digital content. As a result, a platform with robust search and reach will have an advantage over a platform with out those characteristics. Apple iTunes “works” because it is an integrated solution. Can Amazon, Google, Microsoft, or any other competitor wrest users from Apple’s ecosystem?
My thought is that in the platform wars, size matters. In the application skirmishes, solving a user’s problem wins. In my experience, applications get attention because these are where the rubber meets the road for the user. Over time, however, I think the money from utility services will be big, stable, and outside the reach of individuals and smaller organizations. This means that there will be more developers than plumbing companies.
The key decision, then, is picking a platform or platforms to ride in the money derby.
Stephen Arnold, July 21, 2009
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