Sunday, February 4, 2007

The Value Shift

We talked about the shift in value from Hardware to Software that occurred in the mid-90’s. We then explored the next value shift, from Software to Services, which we are now in the midst of. I think it is important to note that what enabled the first value shift was the commoditization of computer hardware. This was enabled by open standards and the power of scale manufacturing.

The transition to services may not be quite so rapid. Will we ever see the commoditization of the operating system? The threat of the free OS may never materialize as they all require almost daily patching, a high level of tech savvy to run correctly and a limited offering of applications. Therefore one has to assume that, at least for the majority of consumers, the OS platform will continue to be dominated by Apple and Microsoft. It seems that the Services providers will always be bound to the OS provider and will never be truly free from those ties in their offerings. Will this be the fundamental limitation of the innovation that services will be able to provide?


N. Venkatraman said...

Great observation. I think it is worthwhile enumerating the reasons for the value shift and then speculate on the forces that are in play now to commoditize OS.

Thanh said...

I actually think there's plenty of evidence in the consumer level that this commoditization is already happening. As the web increasingly becomes the delivery method for software, the choice of OS becomes less and less important. For instance, I'm using Google docs to store my class notes so I can access them from anywhere, and Portable Firefox to take my browser with me wherever I go. I barely notice the difference between my Mac laptop and the Windows lab machines.