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The money and the power

May 9, 2011

Those of you who are regulars here know that I’ve been digging into James Gleick recently. I published a review of What Just Happened on my other blog, and my last post here took Gleick as a jumping off point for waxing historical; this post does the opposite: I want to take a particularly sharp insight he made about Microsoft in 1998 and use it to think about where we’re headed as we approach the midpoint of 2011.

Microsoft is a forward-looking company with a sharp eye for the power points, the lever arms, the control valves in the emerging digital economy. In the software sector of the economy of the late eighties and early nineties, there was just one important power point: the operating system. Microsoft owned it and used it to gain dominance over that entire sector. In the helter-skelter Internet-driven world we’re now entering, a variety of power points are taking form. The start-up screen, what you see when you turn on your computer, is a power point; Microsoft insists that manufacturers hand over all rights to that screen. We’re not just plumbing.

Internet search sites are power points, because they can become habitual portals of entry for users seeking information or ways to spend their money. That’s why it was important to make sure that your Search button would take you to a page at home.microsoft.com.

James Gleick, What Just Happened, (p. 210)

You are correct, Sir

Despite the fact that the essays in What Just Happened are ancient by Internet standards, Gleick doesn’t get much wrong in them, and his assessment of Microsoft is no exception. As a company, to this day, they continue to try to leverage what he calls power points. And while they’ve failed in some cases (music, search, mobile), they knocked it out of the park in others (desktop software, document management, development platform).

And I think the most important thing for me about what Gleick’s saying here has less to do with Microsoft (or any other specific company) and more to do with the general principle of leveraging power points. In the thirteen years since he wrote this article, the companies that have been able to find and leverage power points have achieved massive success.

iPod, iTunes, Microsoft Office, SharePoint, .NET, Google, Android—all these products are great examples of what it means to leverage power points…and have made their creators (and their business partners) huge amounts of cash. And along the way they’ve given us consumers some killer products that have changed the way we work and live.

But all this stating of the obvious begs an interesting question or two:

  • What are the power points currently up for grabs?
  • How are things looking for the main contenders (and maybe the dark horses most folks are unaware of)?

The final word

Over the course of the next few posts, I want to take a look at some of the areas where I see power points up for grabs today.

  • Social Business Software—this is an emerging domain that has a whole new cast of players jockeying alongside industry giants to gain control.
  • Document Management—this one has been settled since shortly after MOSS 2007 was released and has seemed in the bag for Microsoft through the release of SharePoint 2010…but there are rumblings on the horizon that make Microsoft’s domination less-than-certain going forward.
  • End-user computing hardware—aka, tablets, this one has the potential to restart competition over previously settled power points like browser, desktop software, and development platforms.
  • The application layer—aka, SaaS, The Cloud, the app store model, etc., this one is less about outsourcing than about the balance of power in how businesses procure software.

In the meantime, I’d love to hear from folks out there about Gleick’s ideas, my take on them, or your take on them. While I let the next post percolate, jump in, and let’s get the conversation started!

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