Experience vs. Cloud

Scott Francis
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Fred Wilson posits that Apple vs. Google is effectively “Devices vs. Cloud” – and if he were to bet on who is going to be around in 20 years, he’d be betting on Google’s strength in cloud services and machine learning, etc. rather than in Apple’s focus on devices.

Many interpreted my comments as anti-Apple and pro-Google and I guess they were. But I was attempting to make a larger point. Which is that a device centric strategy is not a winning strategy in my mind. The big gains from technology in the coming years will come from things like machine learning and collective intelligence. Hardware and operating systems are important but to some extent a commodity at this stage of the game in mobile. Yes, we will see more sensors, better screens, better battery life, and more and more technology packed into these mobile devices. But I don’t think any one company has a lock on all of the device level innovation and I worry that one company, Google, is developing a very large and sustainable advantage in machine learning and collective intelligence that will be hard for anyone to compete with.

Maybe I’m looking at this wrong, but I see Apple as not a device centric company, but an experience centric company.  I think the device angle is a head-fake.  Apple makes money on the sale of devices. But they’re selling experiences.  Google makes money on ads.  But they’re selling “finding the world’s information quickly” (Search).  It would be wrong to dismiss Google and Facebook because they make their money on Ads, with the idea that the future won’t be ads.

Hardware is a key part of the experience, but so is how the hardware and software interact, and the software itself, and the services in the cloud that back it up.  But the overall experience is more important than any of these things on their own. And hardware – how a product feels is a critical component of the experience – ask anyone who drives a high-end automobile, or who owns a fine writing utensil, or uses high quality knives when they cook.

So if I’m picking between the experience company and the cloud company, I’d put my money on experience (note: experience and cloud are, obviously, not mutually exclusive).