I was recently at a conference for the top European manufacturing companies. It was a small, informal gathering, and no shabby affair, held at a beautiful English country house and attended by the CEOs of Europe’s top businesses.
One of the major topics of debate was the recent move to the idea that real margin was no longer found in making something, but rather in servicing it.
This approach was made famous in manufacturing circles and by, amongst others, Rolls Royce, who rather than sell you a jet engine (time to soup up the Honda?) would instead sell you power-by-the-hour, an all-in package that included servicing and so on.
As the debate bounced back and forth, it turned out that, just as in the technology world, Apple is also a demigod amongst manufacturers.
Then a dissenting voice ventured: “Apple may be king now, but it’s only as good as its last product. Look at Nokia”.
I think this statement is very wrong, but the example serves to illustrate the difference between Apple and Nokia, and is a fascinating signpost to what is happening to the CIO’s world.
Actually, the iPhone 5 could be no better than ok and there is still no way I would switch to those sleek new Samsungs. The reason is my iTunes library, and all that goes with it.
It would just be too much hassle. Then think about all that icloud data, and so on, and it becomes clear that although the excellence of Apple’s products is stunning the change, the real power is for Apple to own our data.
They have excellent seasonal products, and use them as a tool to own a more perennial play. Once our data is owned, the cost of switching becomes so high that they effectively own us.
The other king in this own-the-consumer-data playing field is Facebook. Our photos, comments, social links, events and actions are all in one place.
Unlike Apple, not only is it difficult to move the content, but also, the second order effect is that our friends have to also elect to move.
Sticky! This stuff is superglue! Whilst fortunately for my sanity, and indeed my soul, I am not an investment banker, I do know that Facebook is worth a lot of money.
Whether that’s n billion or n+1 billion I have no idea, but that superglue is worth a lot.
The fascinating metric on Facebook is no longer the number of users (they have lots of those) but the number of minutes users spend on the site, which far outstrips other sites.
So whilst Apple and Facebook in this age of data in the cloud are pulling out all the stops to own our consumer data, who is playing the same game for the enterprise?
Here the story is a little different, in that there are security concerns. Also, unlike Facebook, where the data is freshly created and uploaded, in the enterprise, the data is often there already.
The move to the cloud is our clue. Some companies, like Autonomy, often get the data by virtue of archiving it; others, like Salesforce, start in one area, like CRM, and then branch out; the likes of Amazon hope to get it by offering a utility execution platform.
Once these players get a large, coherent slice of enterprise data, it’s not going to move. Just as we see with Salesforce, people will have to write apps to operate on that data in their platform.
When we add in the new analysis tools and the move to big data, having this information in coherent, standard platforms may represent a true competitive advantage to enterprises.
So there are both advantages and disadvantages to the irresistible slide into a world where someone else owns your data. You win in many respects. Less hassle, more features available, quick deployment times.
The list goes on.
However, this also relies on people playing nice. You better hope your king in the castle is the benevolent type.
The early signs on this modern phenomenon of data-ownership are not always good. Some people point to the power of Apple.
If they don’t like your app, tough luck, it won’t get distributed.
If your media player would allow content whose format they don’t control then, funnily enough, they may well find it is not quite good enough to certify.
Adobe should try harder perhaps? Even open source becomes less relevant as an insurance, if that code can’t reach the data because it’s now in a platform.
It would seem that some kings only want you to buy your corn from certain merchants and on their terms.
The nineteenth-century historian Lord Acton observed, “power tends to corrupt, and absolute power corrupts absolutely.”
So at what point does the power of the likes of Apple and Facebook become too much? We don’t seem to be there quite yet.
As long as the corn tastes good and king is kind, all is well in the fold, right?