What’s going on among the technology giants we know and love or loath? Three of the largest are locked in a head-to-head-to-head battle for supremacy in the desktop and mobile device wars, and each one has a distinctly unique approach.
Which do you choose?
Apple does business the old fashioned way. It makes attractive products that live in a highly curated ecosystem. Think Mac, iPhone, iPad running OS X and iOS with similar applications, all tied nicely together with iCloud, Apple TV, the various app stores, Apple’s retail stores.
That business model works well for Apple as the company commands the lion’s share of profits in each industry product line. To Apple, you’re the customer, and the company works diligently at every level to keep customers happy.
Contrast that with Google which mostly eschews contact with users.
Note that if you use a Google product– smartphone, tablet, Maps, Chrome browser, or the various and sundry and free Google apps– you’re the user, not the customer. Google’s customers are advertisers who want to put messages in your face; messages tailored and targeted with the personal data that Google culls from your online usage habits.
That business model works well for Google as the company’s only true revenue and profit stream– advertising– commands the lion’s share of that industry.
Contrast both Apple and Google’s approach with Microsoft, which has been struggling to find a niche as the world moves toward mobile devices. Basically, Microsoft uses the subscription model to generate revenue and profits.
Yes. Think of licensing Windows and Office to PC makers as an annual subscription.
Microsoft now has a subscription service for Office in Office 365, so users and customers pay by the month or year to use Word, Excel, PowerPoint, et al. Microsoft Azure and the new Dynamics CRM Online services are mostly subscription services– pay by the month– per customer or per user, to use the company’s growing line of online services.
There’s also some overlap between products from these three tech giants. Apple’s iCloud, at certain usage points, has a subscription fee. Google and Microsoft dabble in hardware. Apple collects customer usage data for advertising but does so differently than Google (mostly to support developers of iOS and OS X).
All three companies are, as they say, richer than God, but each one has distinct weaknesses. Apple is dependent upon enticing customers to buy new hardware products. Google is dependent upon a growing source of user data to sell to advertisers. Microsoft makes most of its money from Windows and Office. Both Google and Microsoft have trouble diversifying their business model to create new and worthy revenue streams.
How will the future play out? Because each company is so different, I see more of the same for many years into the future, or at least until the next great thing comes along.