Om Malik: “[O]n this Web 2.0 highway, there are three exits: Microsoft, Yahoo and Google.”
That’s a clever soundbite, and perhaps it’s true from the venture capitalist’s point of view, but I think it misses something fundamental: That the real attraction of the new web platform is that components don’t have to be rolled up into one big monolith anymore to integrate well with each other.
We’re entering into a world where lots of little, independent component providers will be able to coexist and thrive alongside the platform vendors. Why? The platform vendors no longer have such a chokehold on distribution that the best the component providers can hope for are a few years of prosperity before the platform vendor notices there’s an interesting little market emerging around a particular component, integrates the component into the platform, and renders the independent component unnecessary. In the old world, a component provider’s prosperity was often its ultimate undoing.
I’ve always sympathized with the platform vendors’ (OK, Microsoft’s) argument that this kind of integration is done in the interest of customer convenience—I for one don’t want to buy an operating system only to have to go out and source my own, say, memory management and data compression components (something, if you remember, we had to do in the MS-DOS days). In the old world, that probably meant going out, buying more software, and dealing with the headache of getting it installed and integrated. It was simply more convenient for the customer for the popular components to find their way into the platform, integrated and ready to go with no assembly required.
In the new world, though, sourcing a component is no longer a heavyweight operation. By and large, the components themselves are free, and thanks to open APIs and data formats like RSS, it’s now possible to integrate those components into larger applications with comparative ease. Granted, the applications of today are largely ad hoc “mash ups” without an intermediating platform vendor in the traditional sense, but it won’t be long, in my view, before vendors step into that role and make writing such applications as systematized an operation as, say, writing an application for Windows or Linux is today.
Yes, Microsoft, Yahoo, and Google are probably those vendors. Yes, the component providers probably hook into their platforms as the primary vehicle for monetizing their wares. However, without the same level of control over distribution that the old world enjoyed (not to mention the proliferation of open APIs and data formats), the big guys will have to coexist with the little guys.
The platform vendors will compete by providing the most compelling incentive to the component providers. In old world terms, the platform with the most ISVs will win. This bodes very well indeed for innovation in the new “Web 2.0″ world. Above all, the days of the platform vendors integrating all the components into the platform to the exclusion of independent providers have come and gone.