It had to do with the conflict of "who was in charge" and "who could bring volume." Microsoft could try to influence IHVs but without being a paying customer garnered little attention. We started to change that dynamic with the Windows planning process that involved the entire ecosystem in designing the next version of Windows and Window…
It had to do with the conflict of "who was in charge" and "who could bring volume." Microsoft could try to influence IHVs but without being a paying customer garnered little attention. We started to change that dynamic with the Windows planning process that involved the entire ecosystem in designing the next version of Windows and Windows PC. Think of it as having the OEMs (aka the people buying) along with us to have the conversations. There was always a potential conflict between OEMs, Intel, and Microsoft related to relative advantage for profit (that's the who's in charge part). We tried to make this much more a process of mutual cooperation.
The volume question was difficult because of OEMs dealing with the retail channel. Each retailer wanted exclusive models, which fragmented volume. Apple's model of limited combinations allowed them to show up to IHVs with huge orders and thus get the attention on software and other needs.
I think it was almost worse than Microsoft not being a paying customer. We were being paid and yet we didn’t act like all the other suppliers.
It isn’t clear to me, however, there is any sort of different end-state to a series of partners that have to come together to deliver one product. Eventually the partnerships fragment and a competitor (or technology) arises that uplevels the whole offering changing where the seams are in the ecosystem.
The idea of being vertically constrained also has a natural end-point which Apple has seen before. First it saw it with PowerPC and how impossible it was to keep pace with Intel investing so much in Moore’s Law. It saw this again with manufacturing when Tim Cook joined and changed SJ’s view of using a manufacturing partner. Apple won’t be challenged directly by either of those end-states but there will be another way that having all its eggs in one basket will be challenged.
We faced a glimmer of hope with Ultrabooks which I will describe in a future post.
It had to do with the conflict of "who was in charge" and "who could bring volume." Microsoft could try to influence IHVs but without being a paying customer garnered little attention. We started to change that dynamic with the Windows planning process that involved the entire ecosystem in designing the next version of Windows and Windows PC. Think of it as having the OEMs (aka the people buying) along with us to have the conversations. There was always a potential conflict between OEMs, Intel, and Microsoft related to relative advantage for profit (that's the who's in charge part). We tried to make this much more a process of mutual cooperation.
The volume question was difficult because of OEMs dealing with the retail channel. Each retailer wanted exclusive models, which fragmented volume. Apple's model of limited combinations allowed them to show up to IHVs with huge orders and thus get the attention on software and other needs.
I think it was almost worse than Microsoft not being a paying customer. We were being paid and yet we didn’t act like all the other suppliers.
It isn’t clear to me, however, there is any sort of different end-state to a series of partners that have to come together to deliver one product. Eventually the partnerships fragment and a competitor (or technology) arises that uplevels the whole offering changing where the seams are in the ecosystem.
The idea of being vertically constrained also has a natural end-point which Apple has seen before. First it saw it with PowerPC and how impossible it was to keep pace with Intel investing so much in Moore’s Law. It saw this again with manufacturing when Tim Cook joined and changed SJ’s view of using a manufacturing partner. Apple won’t be challenged directly by either of those end-states but there will be another way that having all its eggs in one basket will be challenged.
We faced a glimmer of hope with Ultrabooks which I will describe in a future post.
Thanks, Jon. That makes a lot of sense.