One reason Apple succeeds where other tech companies struggle is that it owns all its technology.
Apple designs the hardware and the core software on the devices it sells. It owns the technology stack – what some call the ecosystem.
This is important for two reasons. First, from a consumer point of view, the Apple experience is seamless. Second, Apple isn’t hostage to any other technology company. It is master of its own destiny.
In industry jargon, Apple is ‘vertical’. No other hardware company is vertical in this way. Nor are software companies.
Google, Microsoft going vertical?
Most large technology companies would like to follow Apple to become vertical. They see it as a route to Apple-like profit margins.
Software giant Oracle is aiming to go vertical in business computing buying Sun Microsystems to get a handle on hardware and build an enterprise computing technology stack.
Google and Microsoft are doing much the same at a personal technology level. That’s why both software companies now have hardware product lines. Both are busy building vertical stacks.
Google bought Motorola to go vertical in smartphones and now makes its own Chromebooks taking it vertical in the PC space. Presumably it will extend these projects into tablets.
Microsoft is vertical in tablets with its Surface range. The Surface is so PC-like it isn’t hard to imagine this product line extending into laptops. And there is talk of a Microsoft-branded smartphone, or perhaps Microsoft buying Nokia.
Back to the future
This is what personal computing was like in the early days when brands like Commodore, Apple, Atari and Tandy made hardware and had proprietary software. The enterprise computing market was the same before the rise of Unix and open systems.
No-one knows if the world has room for multiple vertical technology companies. Possibly only Apple can pull it off. This week I’ll look at whether Google and Microsoft can go vertical.