Devices vs Cloud
Yesterday, on stage at an event hosted by our portfolio company Disqus, it was suggested that I was “trolling Apple” with the comments I made at TechCrunch Disrupt. I explained that I was not trolling anyone and that I attempted to honestly answer a question about the changes afoot in technology. I think there is a fundamental and important distinction between a device focused strategy and a cloud focused strategy.
Carlos Kirjner is an analyst at AB Bernstein who covers Internet companies. I was reading his analysis of Larry Page’s letter to shareholders this morning (the analysis is not a public document and I cannot link to it).
In Carlos’ analysis, he wrote this:
We believe … Larry Page’s discussion about the new mobile, multi-screen world …. is really about the importance of cloud services in that world. This is by no means a trivial statement and we believe goes against a more device centric model favoured, we believe, by Apple.
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.
So when I look at which top technology company is best positioned for the next decade as I see it unfolding, well that’s an easy answer in my mind and that’s the answer I gave.