Of all of the companies, Apple has the most difficult path. This is because it recently lost the one person in the world who had the proper skills to run that company. This is because Steve Jobs redesigned Apple around his unique skill set. To continue at its current level, it can’t just be good — it has to be outstanding, and the firms that did this consistently last decade can be counted on one hand with four fingers left over.
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I ran into a new forward-looking video from Microsoft (Nasdaq: MSFT) last week that showcases a number of Microsoft technologies as they might be used a decade from now. Intel (Nasdaq: INTC) produced a video a few years ago, equally compelling, showcasing a future based on its technology; unfortunately, it hasn’t been able to demonstrate a single design win yet that indicates it is on that path. This got me thinking of a Philips (NYSE: PHG) video (unfortunately I don’t have a link) in the 1990s that basically predicted the iPhone — a device it never actually made.
Over the years, it has often seemed like the companies in power have people inside who can accurately see the future but are often cursed by people running the business who can’t or won’t execute against that vision. They are able to see the future but in some terrible parody of the cursed Greek prophetess Cassandra, who could see but not change the future, they are unable to benefit from it.
I’ll look at four companies that are at various stages and consider their future chances: Microsoft appears to be in decline; Apple (Nasdaq: AAPL) is in transition; Google (Nasdaq: GOOG) appears to be the next Microsoft — in a bad way; and Facebook is the current heir-apparent.
I’ll close with my product of the week: a notebook from Dell (Nasdaq: DELL) that looks like it was carved out of a block of aluminum and blends practicality with design elegance.
Microsoft on the Cusp
This is now Steve Ballmer’s Microsoft, and in many ways the firm bears little resemblance to the user-focused company that Paul Allen and Bill Gates launched in the 1980s. It is financially successful but clearly struggling in a market defined by Apple gadgets and user focus — which is somewhat ironic, given Microsoft’s initial success was largely because it was more user-focused than IBM (NYSE: IBM). The video I started out with accurately showcases a possible future for the company, but its historic problem is that it is too unfocused as a company, and the result is too many efforts that are massively under-resourced.
For instance, with Mango, the latest iteration of the Windows Phone platform, Microsoft has a product that is actually competitive and arguably better than Android — yet it is still losing market share, largely because it is massively underfunding it. It is spending billions on Bing, but the lack of progress there indicates it is under-resourced as well.
The test is not how much you spend, but whether you are making progress — and this new Microsoft focuses too much on containing costs and not enough on funding at levels that ensure success. That, to a large extent, is why it fails.
Channeling Yoda for a moment, it tries but it needs to do — and the end result continues to fall short of expectations. If Microsoft could accurately assess the cost of success, it would likely choose different battles to fight rather than underfunding the battles it is fighting. Seems like a simple thing, but if it made this one change, it would be far better for it.
Google: Death by Envy and Advertising
In 2007, this video foretold a future in which Google wins. It predicts that Google buys Microsoft in 2015 and pretty much takes over the world by 2050. Is really is rather interesting to watch. I do think it accurately showcases Google’s potential, but I don’t think Google is on this path either.
As was revealed in Steve Jobs’ biography, Jobs himself, effectively speaking from the grave, argued that Google was becoming Microsoft — too unfocused and too willing to toss crap out to the market. In short, Google needed to focus and grow up.
Children tend to obsess over showing up their elders. Mature adults focus on goals tied to success — well we should, anyway. Steve Jobs accurately described Google’s childlike excessive focus on Microsoft as its biggest problem and the reason that it has become a poor parody of that company.
Recently it even got its own version of the old Microsoft consent decree (which ironically mirrored IBM’s decades before). As I was writing, this info graphic was released showcasing that Android, Google’s premier operating system, pretty much screws the people who use it.
This brings up a second clear problem for Google, and that is quality. By separating the revenue from the product (it funds everything indirectly through advertising), it does what any product company knows is death: It makes its developers a cost center. Cost centers are naturally starved for funding and generally underperform as a result. So, for Google to reach its potential, it needs to stop focusing on showing Microsoft up, find a way to adequately resource its efforts, and focus instead on what it wants to be when it grows up — or it will fail, as Netscape did, for being the perennial child.
I also doubt Google wants to be remembered as the company that stole from Steve Jobs while being mentored and while Jobs was dying of cancer.
Facebook: Nibbled to Death
Facebook is clearly its own company. It doesn’t seem to be focusing excessively on any predecessor, and it is shifting its revenue sources from pure advertising into things more closely connected to products, like gaming. Interestingly, the video that showcases Facebook is being created, and it is being crowdsourced. This approach also showcases both the promise and problem for Facebook in the future. The video isn’t done, and the teaser is a collection of disjointed views from observers on the company’s future — kind of the video equivalent of a group of monkeys trying to type Shakespeare.
Because Facebook’s long-term success is most tied to how people interact, the core skills needed are more closely tied to skills like ethnography than they are to the engineering skills that typically define companies like this and currently define Facebook. In fact, coverage of Mark Zuckerberg (the CEO and vision behind Facebook) suggests that he is about as far from a people expert as we are likely to get in this business.
Already we are seeing services like Tagged, a social service designed to create deeper relationships, and Nextdoor, a Facebook-like secure offering focused on neighborhoods nibbling around Facebook’s edges. Services like this showcase Facebook’s core weakness — the very real problem that humans currently can’t scale to the relationship numbers that Facebook provides, and general services like Facebook have trouble focusing on the needs of small demographics or distinct geographies.
In short, Facebook’s future will likely be dependent on its ability to develop and apply leading expertise on human behavior and remain good enough for the majority of people looking for a social service. If it doesn’t, it isn’t Google it has to worry about — it is being nibbled to death by a ton of better-focused competing services, as barriers to entry remain very low in this segment.
Wrapping Up: Apple – The Next RIM or Reborn Again?
Of all of the companies, Apple has the most difficult path. This is because it recently lost the one person in the world who had the proper skills to run that company. This is because Steve Jobs redesigned Apple around his unique skill set. To continue at its current level, it can’t just be good — it has to be outstanding, and the firms that did this consistently last decade can be counted on one hand with four fingers left over.
Atari, Commodore, Netscape, Palm, Motorola and now Research in Motion (RIM) have all demonstrated that today’s champion can easily be tomorrow’s bozo. It doesn’t feel like Apple’s board or executive team has yet fully grasped that Apple can’t be sustained as it is without Jobs. It will have to change or find someone who can actually replace him.
Right now, this video showcases Apple’s future, and it desperately needs to change this outlook to something far more positive. In 1996, commenting on Apple, Steve Jobs appears in this video to have provided direction. But in the end, the company will have to maintain product passion at the top to continue to dominate — and right now, that is broken at Apple. Interestingly, this video by Corning may represent the best future for Apple, particularly if the new Apple TV rumor is true.
In the end, each of these companies must find in itself the vision, the focus, and the willingness to take the needed risks to define the future. Each could, but odds are that none of them will. Something to think about this week.
Product of the Week: Dell XPS 14z
Product of the Week
The XPS line has always been one of my favorites, and for most of this year, I carried the 17-inch older version of this product. The XPS 14z, initially released in China, represents the current state of the art in Windows 7 notebook computers. Pretty to look at and elegant in use, this laptop computer, at 14 inches, hits the proper balance between portability and usability in terms of size.
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Dell XPS 14z
Dell XPS 14z
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Twelve inches is far more portable, but the screen and keyboard tradeoffs make them hard to use for heavy writers. Seventeen inches is an amazing desktop replacement, but portable it isn’t, and the weight and inability to use it in many planes — even in business class — makes it problematic.
While the 13.3-inch screen size is typically the better form factor, the unique LG Shuriken display this laptop uses is a 14-inch panel in a 13.3-inch mount, giving you the benefits of more screen size in a smaller laptop.
Dell went to a great deal of trouble to make sure this laptop balanced properly and unlike other premium laptops in its class (read MacBook Pros) it won’t try to iron your legs and dissipates heat properly.
With the passing of Steve Jobs, Dell is the only large PC company still run by its founder, and the XPS line is that company’s premier line. As a result, this is the product that is likely most closely designed for its founder.
Balance is important in any product, and whether you are buying from Apple or Dell, paying a little more for something you’ll depend upon is always worth the price — at least, it is to me. Since the XPS 14z is the quintessential Dell product and the most balanced Windows 7 consumer notebook I’ve yet seen, it is my product of the week.
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