Apple’s decision to give away Mavericks will lead to analysis that the Desktop is dead. But it is probably a bit more complicated than that.
Windows XP is the classic desktop operating system. It is still in broad use across business and home users. The announcement that Microsoft are sunsetting the product was the first indication of a step change in Desktop operating systems. It is still a hugely popular product with a large market share. According to Net Applications it accounts for 31% of the market at September 2013. So why would Microsoft want to sunset a product with such a strong customer base?
Until recent releases Apple’s operating system is essentially the same product as Windows XP. Data lives on your machine and is accessed by applications bespoke to the Operating System. Linux based desktops like Gnome and KDE each have their own suite of bespoke applications.
With even Steve Jobs jumping on the HTML5 bandwagon internet companies have realised that the web as a platform can bring many benefits. Users just need a browser and they can use the same single application across a range of operating systems. GMail was the app that blazed a trail in this area allowing users a rich desktop like experience in the browser. Of course Google have another interest here too in getting users data into their data centres. Here is the nub.
Many software consultants have pedalled “The Cloud” as the solution to everything. You no longer need to maintain hosting environments, you can scale infinitely and things like networks and hardware are no longer your problem. Startups have built on what the cloud can offer to replace some traditional desktop applications. Spotify replaces iTunes, Google Docs replaces Word, GMail replaces your email client. In short if you have a browser your choice of desktop becomes much less important.
Service providers have also realised that The Cloud offers them the opportunity to own and mine large data sets that almost always represent huge value to advertisers. This is probably the reason financiers value Twitter so highly despite the fact that they have never made a cent in profit, have made a loss every year and continue to do so. By encouraging users to lock into your Cloud service you get their data and often have consumer lock-in.
The web in its architecture is entirely distributed. It is a network. Historically you could purchase mp3s from a range of providers, store them locally on your machine and listen to them at your will. Now you can simply stream music from any of a range of providers. For consumers this means two things. Firstly they have a much greater range of music at their disposal. Secondly that the asset never actually transfers to the user. It is a loan. Consumers either seem oblivious to this deal or are very happy with it. Either way this model simply doesn’t work in a Windows XP way of thinking.
Everyone has an App Store (and for that matter a streaming music service) these days. Instead of customers using the distributed nature of the web to find software, download it and install it they can use an App Store. What this means for Internet Companies is that they suddenly control the means of production (the operating system) and the means of distribution (the app store). Without anyone really noticing they have a monopoly. Apple allow users to download software from outside the store but this is a hidden setting and for most users they won’t even know it exists. Google have a similar setting on their Android OS to load applications outside the Play Store. Both companies are highly likely to make money from consumers by the mere fact that they are using their operating system.
App Stores and Operating Systems place users firmly in an ecosystem. For users of Apple’s operating system this offers application curation and firm user experience guidelines. But the web is now an extremely capable platform. If you throw smartphones into the mix you have an extremely different business model. Users are mobile and their input devices offer cameras, accelerometers, gps and very fast processors. It makes desktops look distinctly lo-fi.
Aside from the giveaway of Mavericks we have also seen hardware starting to be subsidised by Google. Their top end Nexus phone for example is considerably less than comparable phones in the market. It is pretty clear that they want users to use their operating system, and generate revenue through the Play Store in return for a subsidised handset. This is precisely what Apple are doing by giving away Mavericks.
Large Internet companies are facing stiff competition. The web is now a very capable software platform and desktop operating systems are reducing in relevance. It is relatively cheap for new businesses to create web based products that destroy established revenue models. New technologies like WebRTC for example have the potential to kill off traditional telephony entirely.
So the Mavericks giveaway feels like a retreat from Apple to their established revenue sources of Hardware and the App Store. It supports the idea that large internet businesses are prepared to incur significant loss-leading to get users onto their platform.
Consumers have more choice than ever now though and web applications are more capable than ever. Apple giving away their operating system feels like a bold gesture. Whether it marks a grand demise in the desktop in favour of browsers or a clever ploy to induct users into an App Store remains to be seen. Ultimately consumers will decide but it is certain that browsers will continue to put pressure on operating systems and the revenue streams that hang off them.
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