Many look at Apple as having revolutionized the computing industry. From sleek rounded machines in an age of boring beige boxes, to the iPod and iPhone, Apple has a knack for introducing successful products. While Apple’s success seems to stem from innovative thinking, at their core they borrowed an old concept: becoming a platform company.
Before the personal computer had landed on nearly every desk and Microsoft was a household name, platform companies ruled computing. If you bought an IBM machine, whether it was a “workstation” that sat on someone’s desk top or a huge mainframe computer that occupied a small room, IBM made the hardware, software and most of the application. A competitor’s machine could not run IBM’s software and vice versa, and you purchased your entire “computing experience” from a single company.
This all changed with the personal computer, and IBM’s decision to have a small Washington state software company make its operating system. This seemingly spelled the end of platform companies. Microsoft now made the software, and IBM lost its grip on the personal computer market, as competitors flooded the scene, all of their machines equally capable of running Microsoft’s software. Software became the key to computing, and purchasing decisions were made based on what software you wanted to run, rather than the manufacturer’s badge on the hardware.
In this environment, Apple struggled mightily and for a time tried to follow in the footsteps of IBM and allow commodity hardware from a number of manufacturers to run its operating system. Once this strategy failed, Apple looked to Steve Jobs with hopes of innovation and new thinking that would save the struggling company. Rather than striking off in yet another new direction, Apple under Jobs leveraged its biggest difference with its competitors: the fact that it was a platform company in a world of hardware and software companies.
One of the PC’s most attractive features was also a grave weakness. Microsoft software worked with hardware from literally thousands of vendors, functioning on everything from machines sold to mainstream manufacturers, to high-performance PC’s built in the garages of enthusiasts and gamers. Hardware quality was not directly under Microsoft’s control, and a hodgepodge of vendors, software components and poorly-developed supporting applications created a perception that PC’s were inherently crash-prone, and that one needed a full-time technical support staff to keep their machine working and free from the nefarious threats posed by viruses and crackers.
Apple controlled its hardware and software, just like the IBM or Digital Equipment of old. Rather than supporting thousands of possible hardware configurations, Apple supported a handful, and provided for an aggressive strategy of “planned obsolescence” to reduce the need to support older hardware. Apple even took a page from the playbook of the legacy platform companies, providing hardware and software support, and developing a slew of ancillary applications, from word processing to video and music editing, all while Microsoft was forced to fragment its software offerings due to competitive concerns.
In addition to owing its entire platform, Apple expanded the platform concept horizontally, creating “feeders” into its core computing products in the iPod and iPhone. Aside from the obvious design queues, both devices were pure Apple: combined hardware and software that focused on an integrated “experience” rather than a bullet list of features of technical functionality. In marketing these devices, a subtle yet recurring refrain caused consumers who liked the platform to wonder if it would be even more successful when paired with a Mac computer and operating system.
There’s a certain genius to identifying the core strength or differentiator of your company, and applying it across your products and go-to-market strategy. In Apple’s case, it was dusting off the notion of being a platform computing company, even as the world at large scoffed at the model of distinct hardware and software companies, each racing toward increasing commoditization. There may be a comfort in the anonymity of moving with the pack, following the latest business “gospel” spouted by self-appointed soothsayers. Look at your business and search for unique competencies, products or experiences, vis-a-vis competitors. Flashy product design and skillful marketing certainly contributed to Apple’s recent fortunes, but a willingness to exploit a decades old business model while the competition blindly followed Microsoft and IBM also played a critical role. What seemingly antiquated competencies can you dust off and use to define your own market?