Ode to the Desktop

Blame Google. Actually, blame Microsoft. The idea sounded great, but the consequences? Unintended. They slow you down. They limit your skills. They force you into a world of mediocrity.

I’m talking about using applications in a browser.

Now, I don't mean any application. There are many types of applications that work well in a browser. For example, process and transactional applications like CRM, Spend Management, and Project Management work just fine in a browser.  In fact, having a browser UI eliminates the need for a client installation, which is a big part of what makes cloud applications appealing. 

Many other types of applications like monitoring, analytics, and reporting also work well in a browser. But the applications that don’t belong in a browser are authoring applications; the types of applications in which you are creating or editing content. Yet, they seem to be very popular.  

Google started it.

For decades, authoring was done in desktop applications like Word or Excel. Then Google introduced its application suite as browser apps in a frontal attack on Microsoft.  Google first launched Docs and Sheets back in 2006 after acquiring Writely and XL2Web. Google Slides was added in 2012. At the time, Microsoft was going through the rough patch of the Balmer era, being attacked on many fronts (and losing), including desktop OS, mobile OS, browser, ...and office suites. Seeing an opening and being flush with cash from its money-printing ad business and the 2004 IPO, Google succeeded where several companies failed a decade before, including Borland, WordPerfect, Lotus, and IBM.

And succeed Google did, especially after cleverly combining the browser applications with Google Drive in 2012. Google Apps, now called Google Workplace, quickly became a serious alternative to Microsoft Office which until then had a virtual monopoly on office applications. The pressure forced Microsoft to counter the way Microsoft always does – by doing the same and making it free. 

Microsoft joins the bandwagon

Microsoft introduced its Office Web Apps in 2010 and later renamed them Office Online, Office 365, and eventually Microsoft 365. The rest is history and browser-based authoring apps from Google and Microsoft are everywhere. Microsoft also introduced SkyDrive in 2007, eventually renamed to OneDrive, which is also integrated with MS365 just like Google Drive. The “free” strategy didn’t work that great against Google, which made Workspace free as well. According to Statista, Google supposedly owns 44% of the market share for office suites, while Microsoft 365 owns 30%.

Browser applications have many benefits. They require no installation and the installation with cloud drive makes working in the cloud easy. Kids use them in school for their projects and, consequently, Gen Z seems to prefer them over desktop apps. Google introduced real-time co-editing in 2006, which enabled new ways of team collaboration that weren’t possible in Microsoft’s suite until 2015. Other benefits are enjoyed by the IT departments such as low cost of administration, high scalability, and solid security.

However, browser applications have significant drawbacks. 

For one, they require a browser to operate. Browsers are designed for viewing web pages, not to run authoring applications. This has some repercussions. For one, a browser is designed to browse the Internet. But when there is no Internet, there are no applications to work with. Losing power is not that uncommon even in Silicon Valley and while your laptop might have plenty of battery charge left, you have no apps to work with.

Another issue is related to opening multiple documents at a time. As document sharing via a link is very easy in a browser, every time you receive a link, you click on it and leave it open to get back to it later. Before you know it, you have a hundred tabs open, each consuming 300 MB of memory. Your laptop gets slower and slower and eventually your browser might crash.

Most importantly, the browser apps only come with a subset of functionality compared to the desktop apps. Don’t believe for a second that browser-based Word or Photoshop are the same as their desktop counterparts. In MS365 alone, you will find many limitations in formatting, shortcuts, performance, data sizes, data modeling (Excel), embeddable objects, customizations, add-ons, macros, and more. 

Similarly, Adobe’s Photoshop for the Web is a highly simplified version of the desktop application. That's why many applications like Adobe Premiere Pro or Autodesk’s AutoCAD don’t even exist as a web version. These applications are built for complex authoring workloads that the users are unlikely to ever perform in their browser. 

The pros use desktop applications

That’s at the heart of the matter. Browser authoring is good enough for light workloads like writing a memo, updating an Excel table, or adjusting image contrast. But for more serious workloads that involve heavy formatting, large data sets, macros, or specialized add-ons, desktop applications are the only choice. The users get trained in using PowerPoint, Excel, Photoshop, or AutoCAD. In fact, they take great pride in how well they master these applications. There are entire industries built around making such professional users more proficient.

You might argue that 80% of all workloads are quite simple and the web applications are perfectly good for that. But I disagree. You don’t become a faster runner by running slow. Professionals go through training to learn their tools of trade. They become proficient in using shortcuts. They seek ways to learn better ways of using the apps. They explore the latest innovations and add-ons available for their applications. They challenge each other to push the limits of their tools. Pros want to run faster. 

And that’s only possible when using desktop applications.

The Importance of Killer Apps

Every platform requires applications to be considered a true platform, even if it manifests other typical platform characteristics such as shared technology services, customization capabilities, and APIs. However, it is often the presence of a specific application that unlocks new possibilities for users, ultimately driving the platform's widespread adoption and commercial success. This particular application, commonly known as the "killer app," enables users to accomplish tasks or engage in activities that were previously inaccessible or limited. The introduction of such an application propels the platform to new heights, capturing the attention and enthusiasm of users and cementing its position in the market. The concept of a killer app is widely acknowledged and represents a critical factor in the success of any platform. 

Throughout the history of technology, there have been several noteworthy killer apps that have shaped their respective platforms. In the case of PCs, the spreadsheet application, represented by VisiCalc and Lotus 1-2-3, revolutionized business operations, while home banking (Quicken) brought PCs into households. Additionally, the Internet browser (Netscape Navigator) transformed information access and online interaction on a PC. These killer apps not only fueled adoption but also introduced new possibilities and use cases, solidifying their platforms' success and highlighting the pivotal role of killer apps in technology evolution. 

For smartphones, email emerged as the undeniable business killer app, propelling Blackberry to great success. However, when Apple unveiled the iPhone, they had a broader consumer market in mind. Surprisingly, email was not initially a priority for the iPhone, as evident from President Obama's preference for Blackberry due to its perceived security. Instead, the iPhone's killer app quickly became its camera, captivating users with its superior quality and ease of use. This was closely followed by the rise of social media platforms, enabling users to connect and share their lives in unprecedented ways. Navigation apps, like Maps and ride-hailing, further solidified the iPhone's status as a must-have device. The presence of multiple killer apps played a vital role in the unparalleled success of smartphones, transforming them into indispensable devices for a wide range of users. 

The killer app for the iPad, or tablets in general, may not be as apparent as in other platforms. Note-taking, while not the most exciting app, has arguably emerged as a significant killer app for tablets. Content consumption, such as watching movies or reading magazines, is also very popular but does not qualify as a killer app since these activities can be accomplished without tablets. While it's true that tablets offer a more enjoyable movie-watching experience compared to smartphones, that is not why most people buy them. Other use cases for tablets are specialized for specific industries like warehousing, field service, or artistic applications. These applications, although valuable, lack the broad appeal of a definitive killer app, which explains why tablets have not achieved the same ubiquity as smartphones. 

The killer app for the Apple Watch, in addition to its primary timekeeping function, is undoubtedly health and fitness tracking. I must admit that I am pleasantly surprised by the Apple Watch's tremendous popularity, driven by its emphasis on health. Despite the notion that step counting had lost its allure during the Fitbit craze a decade ago, Apple has managed to strike a chord with consumers. The Apple Watch's extensive health features, such as heart rate monitoring, activity tracking, and personalized workout guidance, have resonated deeply. Apple's ability to identify and fulfill the needs of consumers has solidified its position in the market, leading to the Apple Watch's resounding success. 

Killer apps are not exclusive to hardware platforms; they are also prevalent in software platforms. A prime example is the killer app for Blockchain, which is cryptocurrency. However, it is disheartening to observe that cryptocurrency has primarily fueled speculative investing rather than addressing tangible issues. Nevertheless, I remain hopeful that we will see the emergence of a new killer app for Blockchain, potentially in areas such as copyright enforcement or contract management. This would enable Blockchain technology to fulfill its true potential by solving real-world problems and making a substantial impact. 

Another software platform, content management, has long relied on compliance as its killer app, capturing a significant customer base. However, as compliance is only critical to specific market segments such as financial services, government, and life sciences, content management platforms are now striving to convince customers that collaboration is the new killer app. Unfortunately, many customers so far have failed to recognize the distinct benefits offered by a content management platform compared to a simple shared folder. The lack of differentiation impedes their ability to accomplish tasks that were previously inaccessible or limited. As the industry evolves, the rise of generative AI introduces intriguing possibilities. It remains to be seen whether personal productivity will emerge as the ultimate killer app, driving the transformation of content management platforms and enabling users to achieve new levels of productivity and efficiency. 

Speaking of generative AI, the current wave of excitement and experimentation is on the verge of giving way to tangible applications that customers are willing to pay for. Numerous application vendors are hastily incorporating generative AI into their solutions. However, the monetization of these capabilities remains unclear. The customers’ willingness to pay for the ability to enhance the quality of their writing might be questionable. Yet it is imperative for vendors to find effective ways to monetize generative AI since running large language models (LLMs) comes with substantial costs. Therefore, vendors have to identify compelling use cases and value propositions that showcase the true potential of generative AI while ensuring its monetization. 

The search for the killer app in spatial computing, the latest emerging platform, is only beginning. It is evident that we have not discovered one yet, which might explain why Meta has faced challenges in making significant progress with their VR headset. The possibility of the metaverse being a killer app exists, although we are likely far from the immersive virtual worlds depicted in books like "Ready Player One" and "Snow Crash”. Gaming could potentially become the killer app, but that would essentially relegate a VR headset to an accessory for existing gaming rigs, not a platform. Entertainment, while intriguing, raises questions about how appealing it would be to immerse oneself in a Taylor Swift concert or the next Jack Ryan episode. Undoubtedly, spatial computing holds promise in immersive training applications, but these specialized use cases may not qualify as killer apps due to their limited reach. Currently, we do not know what application will emerge as the definitive killer app for spatial computing. Nevertheless, considering Apple's impressive track record, it is reasonable to expect that they will eventually uncover a groundbreaking application that propels the adoption and success of spatial computing. 

The provided examples clearly demonstrate the vital role that killer apps play in driving the success and adoption of platforms, be it in hardware or software. These apps have the remarkable ability to unlock new possibilities and engage users in ways that were previously unimaginable. They serve as powerful catalysts, propelling the platform into new markets and ensuring its strategic significance and commercial success. From spreadsheets revolutionizing business operations to email becoming a cornerstone of communication, and from cameras transforming mobile photography to health tracking empowering individuals to monitor their well-being, killer apps have consistently fueled the popularity and widespread adoption of PCs, smartphones, tablets, and smartwatches. Their impact is undeniable, and they serve as compelling evidence of the pivotal role played by killer apps in driving the success of platforms. 

The pursuit of a killer app often proves elusive for many platforms, and the lack of killer apps can hinder their progress. Some apps fail to deliver compelling value compared to more affordable alternatives, while others may even lead the platform astray. It is crucial for platform leaders to consider their killer apps as integral to their overall strategy, despite the challenge of identifying and fostering them. Often, these killer apps are developed by 3rd parties, adding complexity to the equation. Nonetheless, the emergence and success of a killer app ultimately shape the success of the platform.  

 

Notes: 

1 Obama finally upgraded from his BlackBerry: https://www.theverge.com/2016/6/11/11910306/obama-upgrades-from-blackberry 

 

 

Platform or Application...Fish or Fowl?

Everybody claims to have a platform. But having a platform and being a platform company can be two very different things. To be clear, I am talking about "innovation platforms”. In his book The Business of Platforms, Michael Cusumano differentiates between transaction platforms and innovation platforms. Transaction platforms bring together different parties to conduct transactions just like Amazon, eBay, Über, AirBnB, and others do. Innovation platforms provide the foundation for a variety of technology applications.  

The innovation platforms deliver benefits such as greater engineering efficiency by providing a shared technology layer and the ability to customize the deployment for every enterprise.  But the ultimate prize is when the platform attracts other vendors who build their commercial applications on it. This way, the platform enables an ecosystem of partners who build applications that take the platform into new markets.  

A platform strategy is quite different from an application strategy. Platform vendors are courting applications, while application vendors compete with them. Yet, most application vendors claim to have a platform too. So, can they have their cake and eat it? Let’s take a look at a few examples: 

AWS  

AWS is decisively a platform company. As far as I know, they don’t build or sell any applications. AWS is clear in its strategy to attract developers from companies that build applications on it. AWS lives off that. And it lives pretty well. Those application companies are the AWS customers and AWS treats them as such. 

Apple 

Apple too is a platform company. Apple has not one, but multiple platforms including MacOS, iOS, and AppleTV. Apple also builds applications - from office applications such as Pages, Numbers, and Keynote to consumer entertainment applications such as Apple Music, Photos, and Apple TV+. Yet, Apple keeps all its platforms open to any competing application. They have no problem knowing that most MacBook users use Microsoft Office or Google Suite instead of Pages or Numbers. They also don’t make it at all difficult for their consumers to run Netflix or Spotify apps, even if those applications clearly compete with other parts of Apple’s business. That’s what platform vendors do.  

Salesforce 

Contrast that with Salesforce. Salesforce started as an application company but over the years, it developed a robust and widely used platform, Salesforce Platform. Yet when it comes to deciding between selling their applications and letting partners have their share of the deal, Salesforce sales reps never hesitate to push the partner under the bus. Just ask companies such as Conga, FinancialForce, or ServiceMax, companies that have built their business atop the Salesforce Platform but eventually ended up competing with Salesforce. Once Salesforce saw that there is a large enough market opportunity these vendors uncovered, it decided to build an application of its own. That’s not how a platform vendor operates. 

Microsoft 

Microsoft is a converted platform vendor. The company operated as an application company for decades, but since the Satya Nadella era, it appears to have shifted to a platform strategy. For years, Microsoft Office had a complete lock on the desktop productivity market and the company did everything it could to protect that franchise. Sure, Windows was the platform, but the big money was always in Office. In fact, Microsoft’s repeated failures in mobile computing can be directly traced to its strategy to defend MS Office at all costs. They tried, again and again, to squeeze the bloated Windows OS onto a smartphone in order to make it possible to run Office on the mobile devices. That strategy actually made a lot of sense, but it didn’t work. It took another 3 years after Stephen Elop’s “Burning Platform” memo before Satya Nadella took over as CEO and made Azure the primary focus of the company. Today, Azure makes billions for Microsoft and I am writing this article in a free version of Office 365, the cloud-based successor to MS Suite...on a Mac. Microsoft is finally behaving like a platform vendor.  

Oracle 

Oracle has gone through the opposite transformation as Microsoft. Oracle started as a platform vendor. Oracle Database was a platform upon which entire commercial applications were built. Back in the days when I was marketing on-premises software such as Documentum and OpenText, running on Oracle DB was a thing. Yet, Oracle started diversifying into applications back in early 2005. The biggest moves were the hostile take-over of PeopleSoft in 2005 and the introduction of Oracle EBS in 2007. Since then, Oracle was investing more and more into applications, and good for them, because as the cloud arrived, running on Oracle DB became less relevant. Today, Oracle is a full-fledged application player that competes with a myriad of other application vendors. 

 

IBM 

Eh, sorry...does IBM still make software? I have no idea. 

Google 

Google is probably the one company that looks like it is trying to be both. Google Chrome on the desktop, Android on the mobile device, and Google Cloud Platform are all legitimate platforms. At the same time, if anyone stole some business away from Microsoft Office, it’s Google. The Google Suite or Workspace as they call it now (so, 1990s) is becoming quite prevalent today. But in terms of strategy, Google is behaving like a platform vendor. Right now, I’m typing this article in Office 365 within Google Chrome and Google doesn’t seem to mind that at all. This is very different from when you tried to use a Windows version of WordPerfect or Lotus 1-2-3 back in the 1990s. And so, Google is a legit platform vendor. 

Stripe 

The supposedly hottest of the unicorns is at crossroads. Their payments infrastructure looks very much like a platform, powering payments for companies such as SAP, NetSuite, Salesforce, Zuora, and Aria. However, the moment Stripe introduced its own billing application, it effectively declared a war on all those companies. Sure, it will pretend for a while that they can all be friends, but ultimately, Stripe applications such as billing, invoicing, and spend management compete with the vendors that would want to use the Stripe payments infrastructure. That makes Stripe an application vendor, effectively abandoning its platform strategy.

  

Snowflake 

Here’s another beloved unicorn. Snowflake has been so far strictly following a classical platform strategy. Their data warehouse is under the hood of many commercial applications today. All those applications are taking Snowflake into places that Snowflake would have never ventured. Snowflake doesn’t offer any application of its own. Sure, they provide some tools and utilities such as data science and machine learning, data engineering, and cybersecurity, but those are never competing with the applications such as billing or fleet management that are taking advantage of Snowflake. Yes, Snowflake is a purebred platform company. 

Conclusion 

There are very few real platform companies. There might be many that claim to have a platform, but when it comes down to deciding between their immediate interest and the interest of their ecosystem, they are forced to show their true colors. Prioritizing the ecosystem over the short-term interests is a tough call to make for any software company. But those that dare to take that path earn the great prize. Just look at AWS, Apple, Microsoft, Google, and Snowflake – these platform companies are pursuing the platform strategy and killing it.  

Sure, you can be a very successful application company that doesn’t really care about being a platform. If you grow big enough, you may even attract an ecosystem of applications. Salesforce and Oracle are a good proof of that. But you can’t be both. You can’t pretend to have a platform company while competing with the companies that hitch their future to your platform. Yet that’s exactly what companies like Salesforce and Stripe do. 

The bottom line is that you can make a great, successful business out of being a platform or an application company. But you have to choose.