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The web represents one of the biggest triumphs of individual freedom and openness over corporate control.
Now corporations have found a way to roll back that openness. One of of the most successful? Apple, whose quarterly earnings report lands later today.
Amazon, Facebook, and Google are close behind, but nobody has the leverage Apple does. That’s why I think Apple’s long-term revenue possibilities are strong. It’s also why Apple, and those who are busy emulating it, represent a dire threat to the open flow of information.
Openness vs. central control
As Tim Wu argued in his 2011 book The Master Switch, new technologies — the phone system, radio, television — go through several phases. There’s an initial phase of experimentation during which the technologies prove themselves. Then there’s a flowering of alternatives in the market as dozens or hundreds of companies sprout up and grow rapidly to seize previously nonexistent market opportunities. That corresponds with a sense of optimism about the technologies’ potential to change the world and democratize communication.
Eventually, however, market forces and aggressive executives concentrate power — and regulatory control — in a few giants.
AT&T is the classic example: In the early years of the 20th century, hundreds of local and regional phone systems existed, serving small markets in idiosyncratic ways. Eventually, AT&T assimilated them all, bringing the entire phone system under the control of a single, centralized, autocratic monopoly.
That kind of central control is terrific for reliability (you could call anyone in the country — or the world — and get a crisp, clear connection) but terrible for prices and for innovation. It was only with the forced breakup of AT&T’s monopoly that phone rates started to come down.
Similar cycles of openness followed by consolidation followed the appearance of radio and television technologies. But the web, in some ways, is an amazing exception.
For three decades, HTTP (which Paul Ford called “the Web’s operating system”) and HTML have proven to be resilient, flexible tools for interconnecting people and machines, facilitating communication in the most decentralized way imaginable. Anyone can publish a web page to a server on the Internet, and within seconds it is readable by anyone in the world who has the address and a browser capable of rendering HTML.
What’s more, anyone can link to any page on the Web without having to ask permission and without having to worry about what hardware or software delivers that page. All you need is a URL — another widely accepted, well-defined standard for interconnecting information.
If you can’t beat the web, go around it
Now, however, there’s a threat to this openness. It’s called the app store.
Technically, it’s not just the store: It’s the entire ecosystem of apps, content, hardware, and software. Apple perfected the model, and it has transformed the company into one of the most profitable corporations in the world. Even though its share price has plummeted in recent months, Apple is still in a very strong position thanks to the leverage that this ecosystem gives it. Indeed, that position is so strong that Apple continues to generate profits even though its market share among mobile devices is shrinking.
Apple’s model is so successful that others are emulating it. Amazon, as I’ve written before, is perhaps best-positioned to create a similarly integrated ecosystem. Amazon sells content (TV, movies, music, books, news) and apps; it also sells a popular Android tablet that is tied tightly into its own app store as well as its shopping cart for physical goods.
Others are still in the running, though. Google has an app store, software, and its own hardware, but its ecosystem is less tightly controlled because Google also has to work with dozens of hardware manufacturers — the companies who actually make most Android devices, led by Samsung — who have their own agendas.
Facebook is trying to enfold its customers more and more deeply into its own world, starting with its own quasi-open web standard called Open Graph (really just a markup language aimed at making it easier to share text, audio, and video within Facebook) and, lately, extending to its own Android app, Facebook Home, that takes over your phone and turns it into a virtual Facebook phone.
Microsoft, of course, has lots of leverage with the Windows ecosystem, and while it’s coming from far behind in mobile, it might have a shot with Windows 8 and Windows Phone 8 — but it’s too soon to say how well this will work.
But nobody has all the pieces tied together quite as well as Apple.
What we lose when we use apps
The app approach is working: 80 percent of the time people spend with their smartphones and tablets is spent using apps, not the web browser.
Apps provide a better experience for end users, in many cases, because their performance is better. They’re better-optimized for the screen and for other specific capabilities the device has. And for many publishers, it’s easier to make money from an app, whose experience enfolds the end-user and keeps them contained within an environment of the app publisher’s designing.
With the web, by contrast, users keep escaping to other sites — there’s no wall around the garden. That’s why many mobile sites have those obnoxious popups that encourage you to download the publisher’s mobile app. For these companies, the mobile site’s best use is as marketing tool for the app.
But here’s the problem: Apps are difficult to connect to one another. There’s no universally accepted way to link to a specific page or location within an app. (Many apps don’t even have pages.) To connect with an app, you need to use its application programming interface (API), assuming it has one, or the API of the device it’s running on. Naturally, that API differs from device to device. Making app-to-app connections is far more difficult than linking to a URL because you need to be a programmer to do it.
The difficulty of integrating apps with one another was one of the topics I heard executives discuss, in passing, at VentureBeat’s recent Mobile Summit. I’ll be honest, though, it wasn’t one of the event’s top themes. It matters the most to enterprise IT architects, for whom it’s a hassle as they try to tie together various apps that their employees use.
For big companies and carriers, app-to-app connections aren’t important. They’re too busy trying to build their own ecosystems.
Most entrepreneurs don’t care about the ease of integrating apps: They just want to make their own apps popular and figure out how to make money from them. And for consumers, this issue is not even on the radar screen.
That’s why I’m not optimistic about the future of the open web, particularly on mobile: There are huge companies with a large incentive to bypass it, and very few who have enough of a problem with it to register any opposition.
We may just look back on the past 30 years as a strange and happy interregnum between eras of corporate control. Enjoy it while you can.
Image credit: Phil Aaronson/Flickr
Like this story? Want to learn more? On April 14-15, our fourth annual VentureBeat Mobile Summit will tackle the eight biggest growth opportunities in mobile today. The invitation-only Summit will gather the top 180 executives at the scenic Cavallo Point Resort in Sausalito, Calif., to discuss issues like this. Request an invitation.