Pipes, software and platforms: To be (a platform) or not to be – that is the question ..

Hamlet.jpg

Picture depicts Hamlet in context of the quote: To be or not to be – that is the question

HAMLET’s CHOICE

The big news last week was the launch of Opera Mobile 9.5. I will do a more detailed post about it later this week – but the Opera Mobile 9.5 launch made me think of this post ..

As Bob Dylan would say – times they are a changing – and indeed in the recent past the rate of change in the mobile data industry has been accelerated through the launch of the iPhone and the impending arrival of the Android. In early 2006, when I started talking of the significance of the full web to mobile devices including technologies like Mobile Ajax , it was an exception rather the rule. Since then, there are many companies who have been caught up by surprise in the last few years at the speed of advancement of the Mobile Web – for instance that Openwave mistimed and missed the full mobile browser wave and realized too late that the market had fundamentally shifted away from the WAP oriented world it once dominated. It shows that a company can be completely caught off guard by the rate of change .. and then would be unable to recover in time.

This rate of change can only accelerate.

If the book Future Shock Alvin Toffler talks of an accelerated rate of technological and social change which will overwhelm people and entities . We have been living in the toffleresque world especially since the Web took off .. and now we are experiencing the same in the Mobile World as the Mobile Internet starts to mirror the Internet and as the Web starts to become ubiquitous.

What does all this mean in practice?

As we start to see the Internet and the Web dominate the Mobile data industry – every player in the value chain will have to make the choice between being a Pipe, a Software or a platform – and that’s why Opera Mobile 9.5 is so significant because it leverages the Web as a platform ACROSS devices (which could also include the non mobile phone devices). This is significant since (non phone) devices offer one of the strongest growth potential for the industry as a whole.

If players in the value chain(not just Operators) don’t act – then they will have a choice made for them by the tidal wave of change by default.

Much like Hamlet’s choice – To be or not to be (a platform) is the question.

LIVING ON THE EDGE – THEDRIVERS AND THE WINNING STRATEGIES

Let us see the mobile value chain as it stands today ..

Unlike the consumer oriented value chain, we are seeing increasingly a customer driven, creation oriented value chain where the players include

a) The Social Web spanning the Web and the Mobile Web

b) The network operator

c) The device manufacturer

d) The browser

e) The operating system and

f) The SIM

If we also include the content consumption value chain, then we get two additional players

a) The content creator

b) The content aggregator

Now, let us consider what happens when the Internet and the Web become dominant players

Firstly, following Net neutrality principles , the network becomes dumb. Intelligence shifts to the edge of the network. The three entities at the edge of the network – stand to benefit the most – namely – The device, the browser and the SIM card.

Again, following net neutrality principles, customers and the developers becomes the main beneficiaries and also the main drivers

Why?

Customers – for obvious reasons. See the impact of the iPhone driven by customers if you doubt this.

Developers – for a less obvious reason – namely that as intelligence shifts to the edge of the network, we cannot anticipate in advance as to what the potential requirements are – hence the need for a vibrant developer ecosystem extending the core ecosystem in ways which are not predetermined. Thus, developer action benefits consumers – especially keeping the Long tail in view.

Thus, developers and customers determine the competitive positioning of an entity in the value chain and it’s peers

Now, in an Internet and Web dominated world, we have three choices: To be a Pipe, a Software or a platform.

THE PIPE, THE SOFTWARE AND THE PLATFORM ..

Operators are not the only ones to fear being a Pipe. In an Internet/Web dominated world – there are three choices : A Pipe, A software and a platform.

Let us define what we mean by these terms

A pipe is a pure carrier of digital information with no value addition.

A software – is a digital entity without the services layer /platform layer. It may have a developer program but does not a mindshare in the minds of the community and finally

A platform is characterized by a services layer and also a community following. This strategy stretches far beyond the developer program.

Let us look at a few examples:

a) Social networks: What was started by facebook is now a norm. Most large scale web based social networks are now platforms.

b) Networks: There are many initiatives to make the network as a platform. That’s why I have historically supported initiatives like the GSMA third party access initiative and Vodafone betavine . In addition, the network can also extend it’s influence substantially by working with the SIM – and that explains the strategies behind SCWS – which could be a powerful strategy considering the SIM, browser and the device are at the edge of the network.

c) Devices: Nokia has done a brilliant job in aligning itself with the ethos of the Internet and positioning itself as a platform. The same is not true of the others. Motorola still stuggles. Sony Ericsson Q2 profit sinks and lays off 2000 workers . Both Samsung and LG do not have the same mindshare in the minds of the community and hence are vulnerable in the new world. (The iPhone and the Android are covered below)

d) Operating systems: The valuation of Symbian shows that it had become commoditised – even when Symbian has shipped 150 million devices with annual revenue of £195 million, at £210 million – the Nokia deal values Symbian at only two times the revenue Yes, Symbian had a developer program – but not much of a mindshare in the wider community beyond that. Hence, I view Symbian more as software and less as platform

e) Browsers – Webkit is pursuing a software staretgy. This is successful but it is limited in contrast to a platform strategy (although Webkit is open sourced, most of the contributions are from big companies – most notably Apple – and not from grassroots developers)

f) The iPhone – is very significant player because of iTunes (and not only for the iPhone itself) – since iTunes is the foundation of Apple’s platform strategy and is a very significant part of it’s go to market platform.

g) Android v.s Limo – Android is a platform. Limo is mainly software. Contrary to popular comparisons in the industry – the two are not the same. See iphone vs. Symbian vs. Android vs. Limo vs. Ovi : We cannot compare an ecosystem with an operating system

h) Content aggregators: With a few exceptions like buongiorno who are extending their scope of influence by acquisitions – , most of the mobile content aggregators are stuck in the middle – and will not be able to gain mindshare in light of competition from others in the value chain.

OPERA MOBILE 9.5 – LEVERAGING THE WEB AS A PLATFORM

All this brings us to the Opera announcement last week. I will have a detailed post about it soon – but I will cover a specific aspect here: i.e. Dragon fly – Dragonfly is more than a Web based debugger for the mobile browser .. it heralds the maturity of the Web as a development platform for the Mobile browser. The browser becomes the tool to leverage the Web as a platform. This has already happened on the desktop so it makes sense that the mobile should follow – alongwith the principles of Mobile Web 2.0 . Opera believes in the vision of One Web . In order to make that a reality, you need equivalent experiences across devices. In order to ensure that the experience is equivalent, you will need first class debugging tools. So, in that context, Dragonfly is leveraging the Web as a platform through the browser across devices(not just the mobile phone) since the Opera browser powers one of the most successful non mobile phone devices in recent times – the Nintendo Wii ). Thus, this leverage plus the historic synergies between Opera and the developer community – make Opera Mobile 9.5 a significant platform play.

I will write a longer blog about Opera Mobile 9.5 covering – Cloud computing, Gears, Widgets, Community interaction, the iPhone, impact on the wider ecosystem, mobile web 2.0, developer community, go to market strategy and so on ..

TO BE OR NOT TO BE ..

Hence, to recap – Opera Mobile 9.5 – much more than just the browser. It is a manifestation of the Web as a platform – spanning devices.

But the wider impact is more significant here -

The choice between pipe, software and platform – will be one which many will have to make – either by intent or by default.

Indecisiveness and uncertainty of knowledge are the major themes throughout Hamlet. A life of action v.s. a life of silent acceptance is a drama which is being played out today in our industry; leading to a choice akin to Hamlet which many in the Mobile data industry will have to make – sooner rather than later.

As usual comments welcome ..

Image source: http://files.list.co.uk/images/2007/08/16/Hamlet—Solo.jpg

Comments

  1. Martin Wirz says:

    I agree with all you say.
    However, the main drawbacks of browser-based apps are
    a) no system access (GPS, Address book)
    b) latency
    A system like Gears could help to overcome this issues.
    So, for me, that’s definitely the future for mobile apps.

  2. Tote says:

    Ajit,
    I wonder about your opinion on “mobile” browsers doing transcoding at their back-end. Opera Mini is a real product, TeaShark and SkyFire (among others) are competitors ==> they all contribute to one-real-web manifesto. Is Opera Mobile so special that it’s worth a separate article on this topic?

  3. Ajit Jaokar says:

    Thanks for your comments Martin. Yes, I agree that gears is significant. I have a more detailed blog on Opera Mobile 9.5 coming soon. rgds Ajit

  4. Ajit Jaokar says:

    Tote
    Yes – everything will co-exist. However, I have historically covered the Mobile Web and hence the blog in detail. Also, the blog is more about a platform stratety as you see – and less about products. Also my personal belie is that slowly with Android, Gears full web browsing etc – we will see more of the Web and less of other propriotery mechanisms on the device

  5. Guan says:

    Ajit, excellent post outlining the roles of the mobile web ecosystem. I personally agree with Opera’s vision on “one web”. I just got my HTC diamond with the opera mobile 9.5 – I think this is the right way to go. However, operators have been struggling about finding their role and fear to be a dumb pipe as you also mentioned. Ultimately, I believe that operators have to open themselves more to really become a platform and attract 3rd party developers to differentiate themselves. Using the platform, operators can demonstrate the true capabilities of a mobile network and IMS – presence, location, charging, access channel and etc.