The Technology Cold War is OVER – Apple and Microsoft are truly competing again…FINALLY!!

The nucleus of this article came from the recent Macworld theme “The First 30 Years where just the Beginning”.

It got me thinking how the next 30 years will be after looking the last 30 years roller coaster ride.

After decompressing from all the CES and Macworld activity, two very basic things occurred to me:

1.) The “War for the Living Room” is in full swing.
2.) Microsoft and Apple are truly competing again.

This means that the technology cold war is over. A new battle is about to begin.

To support my “revelation”, I did a quick analysis of the battles between Microsoft vs. Apple and I break down like this:

Tech War I -“The War for the Desktop” – 1980-1995

Most historians see this era as the “personal computer era”, but by 1990 it was squarely Apple vs MS as they battled it out to be that computer on your desk or optionally on your lap. This saw the acceptance of computers as a broad business tool and networking technologies take hold to connect us at the corporate level. Unfortunately, Apple lost this round and Microsoft gained market share dominance that they hold to this day.

Cold War – 1995-2006 – Mild escalation

As Apple went through its issues and almost disappeared forever, Microsoft was truly entrenched in the office and almost every home that had a computer. For most of us, the focus turned toward the Internet and we had a new battle to fight. Microsoft was late to the game and has played catch up for the most part. As the 90’s were coming to a close, Steve Jobs returned to Apple and many hoped for a turnaround. In the early part of this century, Apple introduced the iPod and just last year moved their platform to the Intel chip gaining market share and making the platform a solid alternative for many (including your humble author). At this point, Microsoft is losing the Internet battle to Google and Apple has regained market share because of solid innovation.

Tech War II – “War for the Living Room” – 2007-“?

Computing has become not just about using it as a tool in the home office or while at work, it is integrated into every aspect of our lives. Laptops, PDAs, Smartphones, Cell Phones, Web Tablets, Video Game consoles and MP3 players connect and distribute media into exciting new ways.

However, there is on thing missing – bridging the gap between the content that resides on computing devices and allowing easy access and viewing/listening through living room via the TV. Sure, MS has media center, but at $2000 for a machine and needing to have a background in systems engineering, it really was for the early adopter. There have been many devices for the iPod to connect music into the stereo and low end devices to view videos on the iPod.

But with technologies like Tivo and IPTV, the living room is where people really want to view their content. Everything is trapped on the computer and this year is the tipping point where people will really move to access it in the living room.

HERE IS HOW I GOT THERE:

WHAT I DON’T KNOW
If Windows Mobile will be able compete with the MacPhone
If Microsoft make the Zune a worthy competitor?
If Vista make any impact other than collecting default revenue because people need to upgrade their computer and don’t have a good choice.
If Apple’s OS X Leopard will innovate to stay ahead
If Apple’s shift in name and brand put them on the path to become the Sony of the 21st century?
Will Microsoft make the Media Server easy to use and affordable?
Will DRM kill everything by charging and re-charging for content we already own?
WHAT I KNOW
If Microsoft doesn’t put on its innovation pants, it is going to lose this battle by the end of the decade
If Apple keeps going with widescreen iPods, multiple iPhones, HD content for sale on iTunes and greater AppleTV systems, they are going to create the “Living Room ecosystem” people are crying for
If Apple keeps its control freak nature for much longer, Microsoft can trump them with a system that allows for freedom
It is going to be a fun time to be alive as these two companies really go at it again.
This year is going to be known as the “War for the Living Room”.

So, What do you think?

OTHER GOOD ARTICLES TO REFERENCE:
The Microsoft showdown with MacWorld & the Apple Phone from VentureBeat
Jobs versus Gates

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Bubble, Bubble, Bubble. – In Private Equity not Web 2.0

Being a serial entrepreneur I have been through many business cycles, but the Internet boom of the late 1990’s was an extremely heady time. People were so enamored with what the Internet could do, every one really believed that the old rules didn’t apply.

The reality was that those rules applied more than ever and with the crash in the early part of the century we have tried to learn our lesson.

With these new companies deemed Web 2.0, everyone is expecting another bubble. So many of the same types of companies have been funded so there are bound to be consolidation and just plain failure.

According to Michael Arrington, his entry “Bubble, Bubble, Bubble“, the despite the fact that some companies are failing, the sky is not falling.

In fact I would call this time around the ol’ startup track “saner, saner, saner”.

Despite many of these companies basing their success on being an aftermarket for Google, the smart ones I think many people know that you have to be in this to create a real enterprise and one that makes money. It is not so much about the VC’s but about the ability to use the low cost and barrier of entry to innovate.

But the DEAD POOL is not cool .

I think that the blog A VC gets it right his counter points on “Building It Up and Then Knocking It Down” are right. He says “over hyping young companies where people are working their butts off and then throwing them overboard quickly into a “dead pool” when they fail is not healthy.

I believe it is dead wrong to put this up there. It just feeds the fire for the chicken little’s of the world. Mike Arrington has known successes when he co-founded helped flip Achex and sold it to First data. I don’t know if he has experienced building a company from scratch and having it fail, many times from circumstances out of your control.

BUT THERE IS A BUBBLE DEVELOPING and not where you think…..

The bubble is not with companies it is in the private equity market itself. The model of funding and the way people are evaluating companies is changing. The way investors look at companies is not based on a fast IPO but aligning it to be a sweet acquisition target.

This is helped in no small part since most VC’s invest like they are teenage girls. “Oooo, you invested in a video sharing site, I want one too! You put $5 million into social networking for eco-friendly baby boomers? Find me one so I can get one too!!

HERE IS HOW I GOT THERE:

  1. The amount of money chasing deals have lightening strike twice to find that repeat of unrepeatable past returns is growing rapidly
  2. The number of opportunities are declining and there are too many copycats plus the cheap money is pouring out to fund them.
  3. Not enough VC’s to serve on boards effectively and make the existing investments get to a proper exit
  4. IPO market is still not there and there is and there are only so many acquisition partners
    Higher prices of entry and lower returns

WHAT I DON’T KNOW:

  1. When the IPO market might be friendly to tech stocks
  2. If investors will broaden their portfolio choices to get their money working in unique ways
  3. If funds might start giving their money back

Only time will tell if this comes to pass. If you have a good idea, the money is out there but might not be for very much longer.

Crystal Ball? 2-3 years or mid-2008 this is gonna come to a head. Only time will prove me right or wrong.

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Analyzing the Keynotes: Bill Gates and Steve Jobs

This is fascinating. I was thinking of doing an analysis of Steve Jobs and Bill Gates keynotes. I watched them both and their styles are so different.

Steve Jobs is the modern day PT Barnum. His charm is high and his enthusiasm is contagious.

Bill’s Keynote was tired and a bit boring with skit like demonstrations. The Windows Server was cool, but the iPhone that Steve Jobs presented was light years beyond.

This analysis is great and includes Michael Dell.

Bill Gates and Steve Jobs: Keynote text analysis

What really strikes me is the “Average Words per Sentence” number.

SJ is at 10.5
BG is 21.6
Michael Dell is 16.5

The bottom line for a communications guy like me is that shorter sentences that are not dense with fancy words works the best. It is nice to have this proved for the hard numbers people out there.

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