The Apple Cloud Platform
- In the 90s, in spite of having a good product, Apple lost Mac vs. Windows PC war not necessarily because Windows was a better product, but because it was everywhere, and more convenient. Today, as functional and premium user experience as native software can be, the convenience, accessibility, collaboration, and sharing capabilities of the web are becoming more and more compelling. The second Great War for Apple might be Apple vs the web.
- If Apple is to acknowledge the threats and plan for the next era, they could extrapolate their hardware/software/services integration to the cloud:
- Invest in own data centers and cloud infrastructure. These would only become differentiators for Apple’s products if they run custom server silicon, tightly integrated with server software.
- Build a next-generation runtime, a sort of cloud-based operating system, that would enable the development of both Apple’s own, and third party apps and services, that would work across devices.
- Bring the intelligence to the web, analyze web content, how Apple customers use those web-based, cloud OS apps and services, and feed it to the personal recommendation engine.
- The business model should be in place to support such dramatic strategic move. Imagine if you could subscribe to your entire Apple experience for a monthly fee. For X dollars a month, you have access to your Apple ID with all Apple’s and third party apps and services, living in the cloud, accessible from any device and any form factor.
The second Great War
Before the Watch, iPad, iPhone and even iPod, Apple was primarily a Mac company. In the 90s, Macintosh was the only meaningful business for the Cupertino company, and yet, this business was crushed by Microsoft and Windows. The Mac, which popularised lots of technologies, including GUI, and according to many, even in its darkest days, had better UI and better third party apps, was still relegated to a small niche, and Apple was fighting for survival. In the 90s, controlling distribution channels was everything, and Microsoft controlled most of them thanks to their deals with enterprises and IT departments around the world. Being the default OS, Windows dominated the PC market, which in turn motivated app developers to create a thriving ecosystem of third party apps and games for Windows. Windows “won” not necessarily because it was a better product, but because it was everywhere, and more convenient.
Fast forward to 2019, and Apple is one of the richest and biggest companies in the world, and their consumer products and development platforms are doing really well. However, a new trend has been emerging over the years — computing, intelligence, and app development ecosystem have been moving from devices we have in our homes and pockets, to the cloud. Three of the biggest Apple competitors — Microsoft, Google, and Amazon — are all embracing the cloud-first world, and Apple seems to be the only one that doubles down on on-device computing today.
Apple’s arguments are compelling — when native software is written and custom-tailored to local hardware, the end product is usually snappier, more functional, and more pleasant to use. Native apps can offer much greater functionality and better UI than web apps — and they can run on your device without the internet connection, all while preserving your privacy. So, why won’t developers write, and customers use native apps only, shying away from slow, frustrating, inferior, and often privacy-violating web apps?
First, every developer wants to reach the widest audience possible. This means developing apps for other platforms, such as Windows and Android — but of course, a developer can theoretically reach everyone on earth with the internet connection, regardless of the device, by making a service or an app for the web. Investing in supporting custom proprietary technologies, unique to just one native platform, is expensive and often doesn’t provide good return on investment, hence many app developers create just one user interface that is used consistently through all platforms and the web. This is why you see more and more apps that behave and look like non-native apps on macOS, iOS, or tvOS.
Second, developing for the web provides advantages that native apps don’t have. Collaboration is much easier and more seamless on the web — just look at G Suite. Sharing content, an app, or a specific part of an app is as simple as sharing a link from the browser. And of course, anyone with a browser can discover and access any web app or web content in the world. Google is very smart in providing links to services, podcasts, Google News items right from Google Search. Let’s face it — in many industries web apps and services have already “won”, and working in a browser makes a dominant use case for PCs for many people.
In fact, what Google is doing is profoundly paradigm-shifting. As much as the home screen is the starting point for you to access your apps and content, Google search and Google Chrome are becoming “the springboard”, the home screen for all the web content. Accessing and launching websites, apps, services, and content becomes as easy as typing in a word or tapping a web link, from any device.
As functional and premium user experience as native software can be, the convenience, accessibility, collaboration, and sharing capabilities of the web are becoming more and more compelling. By running the world’s entry point to the web with Search, operating the dominant web browser with Chrome, and making the most intelligent, web-crawling “bot” with Google Assistant and Duplex, Google organises the web content market, which in turn motivates app developers to create a thriving ecosystem of apps, games (enter Google Stadia), content and services for Chrome and the web. Which means that web and cloud might “win” not necessarily because they offer a better product, but because it is everywhere, and is more convenient.
Do you see the trend here? I do — and this is why I think that, similarly to the great Mac vs Windows war in the 90s, Apple is about to face another uphill, even larger scale battle — this time it will be Apple vs the web.
Moving Apple experience to the cloud
Apple, of course, might dismiss all those threats, stick to their current business model of selling premium hardware, and keep pretending that web is an inferior experience and would remain so forever — if this is the case, I would be deeply concerned about either the company’s strategic blindspots, or Apple’s deliberate lack of interest in controlling this market long-term (while prioritising perhaps designing cars and luxury tech accessories). However, Apple could also acknowledge the threats and plan for the next era. If the latter is true, what could be Apple’s long-term investments that would ensure that Apple is as dominant, ~10 years from now, in the cloud and the web?
Apple’s has long been saying about their focus on tight integration of hardware, software and services. Here is how that integration might be transferred to the cloud.
Data centers and cloud infrastructure (hardware)
The first lesson, to learn from Microsoft, is to invest in own data centers and cloud infrastructure. Microsoft, too, used to monetize from client-level software and services such as Windows and Office — today, after an impressive strategic shift over the last years, Microsoft leads the industry with operating a massive cloud infrastructure of Azure. According to Satya Nadella, Azure’s ambition is to be “the world’s computer” — by being computing and intelligence platform in the cloud, Azure both powers Microsoft’s own services such as Dynamics 365, Microsoft 365, and Microsoft gaming ecosystem, and serves as a platform for third party developers. Hardware, software and services integration on a data center level provides differentiation to Microsoft’s products, and business.
There is an indication that Apple acknowledges the importance of owning data centers. Now, iCloud operates on Azure, Google Cloud, and AWS, but reports suggest that Apple invests massively in own cloud infrastructure. However, own data centers would only become differentiators for Apple’s products if they run custom server silicon, tightly integrated with server software — there haven’t been any rumors yet about Apple’s ambition in this space. As much as Apple invests in native technologies like Metal and Create ML today, it would need to invest in differentiating, server-based app development frameworks for their cloud platform.
Cloud app and services platform (software)
The second lesson — this time it comes from Google — is to invest in a next-generation runtime, a sort of cloud-based operating system, that would enable the development of both Apple’s own, and third party apps and services, that would work across devices. Think of it as of Apple’s wrapper around the web, and universal Apple’s identification platform on the web, leveraging both edge and cloud computing — log in and get access to all the web’s content, but differentiated by Apple’s user experience and Siri intelligence (see below). Working just in the browser, not logged in to Apple cloud, would be an inferior experience.
While the user interface can be native and executed on the device, tapping on an app icon would open a web view, or a web app — similarly to how Chrome OS works on Chromebooks with both web apps and Android apps. All the app logic will execute in the cloud (perhaps Apple can find a way for it to execute locally on the device as an alternative, if there is no internet connection).
Most importantly, this cloud-based platform should enable web-based third party development as well. Today, when you log in to icloud.com in your browser, you only see some Apple apps and services there. Imagine if you could similarly have access to all your apps, from any device, be it a laptop or a smartphone? Launching a “universal” Yelp app would be as easy as typing “Yelp” in a search box, for example — and it should require little to no effort from Yelp to adapt their already existing web product to Apple’s cloud platform. Your content, your apps, your services will be anywhere you go, on any device — it would only require you to log in to get access to it. Sharing links to any pieces of this content, or apps, with anyone, on any device or platform, will be as easy.
To be clear, none of this is novelty — the porgressive web apps (PWA) allow most of this fuctionality aready. The differntiator for Apple would be the identification system and a layer of UI on top of those.
Intelligence in the cloud (services)
Another lesson to learn from Google is to make Siri crawl the web, analyse web content, how Apple customers use those web-based, cloud OS apps and services, and feed it to the intelligence and personal recommendation engine. Today for technologies like Siri Suggestions, Apple relies on third party developers to actively adapt and implement relevant APIs, so that your iPhone might surface to you a suggestion of a certain action at a certain moment. Google Duplex, on the other hand, crawls websites, analyses them automatically, studies how people use those websites and how you fill the same web forms over and over again, and then intelligently suggests you autofilling recommendations — all with little to no involvement from web developers.
By moving the app logic to the cloud and analysing big data, Apple could upgrade Siri recommendation engine and suggest that you listen to certain podcasts, or songs, or read Apple News stories, or launch apps, right from the home screen — based on the knowledge graph and broader trends of how people with similar interests behave. Apple’s research in differential privacy would provide intelligence while respecting your right to remain anonymous. (To be fair, most, if not all, such kind of machine learning can be done locally on the device, today, provided that there is big data research going on. This far there has been no indication that Apple is doing it broadly.)
Making technology is just one piece of the puzzle — the business model should be in place to support such dramatic strategic move. Today, Apple’s business model of selling hardware devices at a premium aligns wonderfully with the vision of local devices being the epicentre of computing and intelligence. However, as these move to the cloud and the web, expensive hardware would become increasingly questionable value proposition, especially if it doesn’t offer convenience and smart features. That said, it’s hard to imagine Apple going full-on Google and monetising their business through ad sales — it’s not in Apple’s DNA.
In one of my earlier pieces I made a thought exercise of what it would look like if Apple would start selling subscriptions to their platform and user experience. Currently, by buying new iPhones, Macs, or Watches every once in a while, you essentially “subscribe” to Apple. You can also quite literally subscribe to Apple’s services such as Music, News+, iCloud storage, and soon to be launched TV+ and Arcade.
Imagine if you could subscribe to your entire Apple experience for a monthly fee. For X dollars a month, you have access to your Apple ID with all Apple’s and third party apps and services, living in the cloud, accessible from any device and any form factor. You might even get new devices regularly for free, or at a reduced price, if you are a subscriber. Of course if you log in from a Mac or an iPhone, the experience would be even better, even tighter integrated (similarly to how Google services work best on the Pixel) — but even if you log in from any web browser on a PC or an Android phone, or a random smart TV, all your apps and content would be there, tailored just to you, enhanced by Siri intelligence and recommendations.
This is, of course, just a vision and a thought exercise, and there are so many fundamental technological and business challenges to overcome to make it a reality. However, if I’m right and Apple’s war with the web would be as fierce as I imagine it to be, I wonder if Apple has any choice at all, but to embrace and leverage the web and the cloud, instead of fighting it.
Alternatively, Apple might try to cling to their current business model and try to make native experiences as convenient, accessibile, discoverable, collaborative, and sharing-friendly as web content — but even if it’s at all possible, it would still not solve developers’ desires to reach the widest audiences possible with as little effort as possible. Or Apple might cave in and make Google Chrome and Google Assistant defaults on their platforms, but that would be waving a white flag on the ambitions of controlling user experience.