More Than Hardware: It’s The Ecosystem, Baby!

What makes Apple a successful purveyor of finely crafted technological gadgets? We love Apple’s hardware designs, right? What else? Apple proves year after year that they get software, too, with best of breed apps that set the standard of integration. What else? Success is enhanced from the organically grown ecosystem where hardware design, software capability, and content all grow in a cultivated, leveraged environment.

Microsoft Did It, Too!

Arguably, the Mac was one of the first mass marketed devices that created something of thriving ecosystem. Hardware, software, applications, peripherals.

Microsoft had something similar going once they ditched their relationship with IBM and OS/2 and brought Windows and Office to the masses. That was Microsoft’s ecosystem. Though it may not be thriving on new devices, it makes the company a lot of money.

The Information Ecosystem

Google tries to play the game, too, though results indicate a questionable track record to date. The search giant doesn’t get hardware at all, as evidenced by the growing Android fragmentation problem.

To Google, you are the product. They make money selling you and information about you to advertisers. Like Windows and Office, information is wildly profitable, but does it scale well to other platforms and devices? Not yet, hence Android-based tablets have yet to gain much traction against market leader iPad. And, Google seems to have trouble creating the same information ecosystem on mobile devices as exists on desktop and notebook devices.

The Content Ecosystem

Time will be the judge, but Amazon, with the fledgling Kindle Fire (an Android-based tablet), seems to get the ecosystem concept which has been wildly successful for Apple. Like Google’s Android OS for smart phones and tablets, Amazon appears ready to give away the Kindle Fire at or below cost (razors are free, razor blades make money) to make profit on what Kindle Fire gives the customer– access to content from Amazon in the way of books, music, television shows, movies, and more.

Amazon’s apparent strategy of building around a strength (Kindle and content) displays a greater understanding of the whole being more than the sum of the parts; certainly more so than other tablet makers, who focus purely on hardware with the clumsy Android operating system bolted on, all in a vain attempt to look something like darling Apple.

What happens when ecosystem oriented Amazon attacks the market from the low end, while Apple’s growing and polished ecosystem owns the profitable middle and high ground? Can you say, squeeze? A bloodbath among device manufacturers lies straight ahead. Meanwhile, Microsoft appears set to make more revenue and profit by patent licensing from Android smart phone makers than from sales of Windows Phone 7 devices.

Google, Motorola, Samsung, HTC, Nokia and everyone else hitched to Microsoft or Android has nowhere to go. Where’s the profitable market segment? And, will Apple drop prices to defend the middle ground? Will Amazon expand the Kindle line to do business in the more profitable middle ground? Can Apple’s upcoming iCloud compete against Google and Amazon’s online offerings?

Cloud? Not Ready For Primetime!

Here’s what I think. The cloud, as promulgated by Google and Amazon, is overrated and not ready for prime time. Whatever the cloud turns out to be, for now it’s promoted more heavily by techno pundits (who need something new every day, including a made up controversy), and those who have a vested interest in expanding their cloud domain– Google and Amazon.

The rest of us use the cloud, but do not actively think about the cloud. We shop, we buy, we read, we upload and download, but we never think that our online life is cloud-oriented. In other words, until bandwidth is far less expensive and much faster, we won’t be streaming or storing much of anything from or to the cloud. Amazon is a cloud heavyweight. So is Google. Is Apple? They’re no cloud slouch, but it doesn’t matter, because it’s the ecosystem, baby!