QUICK TAKE

May 10, 2004 My View: The Digitizer by George F. Colony

Damn, I hate to be wrong! And it's time to come clean. . . .

The story of the technology industry and the parables of two men, Steve Jobs and Bill Gates, have been inextricably entwined during the past 25 years. They started out as dreamers who had visions of how personal computers would change the world ¿ and they dedicated their careers to making it happen.

Their paths diverged in the late 1980s. Gates was well on his way to building one of the most lucrative and tightly controlled monopolies in the history of modern capitalism. Jobs was being ignominiously tossed out of the company he had founded. Jobs' eccentricities (from his control-freak tendencies to his erratic management style) had converged to make him professionally unpalatable. The ill-fated NeXT, with its revenge-driven strategy, further confirmed that Jobs was a nonfactor — a has-been from the bygone years of homebrew whimsicality, stuck in an era of corporate, enterprise-focused technology.

My thought at the time: "Good riddance." Forrester's focus on how $1 billion-plus companies use technology enabled me to write off NeXT and Apple as diversions, insignificant to the enterprise business that we analyzed every day.

It was the mid-1990s. Apple was disappearing. Steve Jobs was irrelevant. And few noncult members wept.

Roll the tape. The original dream of using digital technology to change the way we live our lives is being fulfilled not by Microsoft and Bill Gates but by . . . Steve Jobs. He has revolutionized the film industry with Pixar. He is the prime mover in the transformation of the music industry. The most successful portable music player by far was his idea. The iLife software suite is an amazing set of integrated applications for controlling music, arranging and storing photos, capturing and editing videos, making movies. GarageBand, Apple's newest software for recording, editing, and arranging music, is drawing a fresh new generation to Apple. Steve Jobs is "The Digitizer."

And he has recycled strategy to get there. In the 1990s Macintosh suffered from a dearth of software. Apple had to cajole, push, and plead with software makers to support the Mac. Few did, and the Mac withered.

When Jobs arrived back at Apple, he said, "Screw the software business — let's build our own great applications!" This old computer business stratagem, dating back to the minicomputer industry, yielded the ease and elegance of one computer, one architecture, one software set — openness and interoperability be damned. Without standards and third parties to worry about, you can tune your software for maximum integration and seamlessness — no bulky APIs or open drivers to file, rub, and sand the cool edges off your systems. And if the software is good enough, consumers have to buy your computers to run it.

It's not open, and it's not industry standard or industry-certified. It's just better.

Jobs is delivering on the digital dream. While other companies in the tech industry are either stumbling (Sony), services-focused (IBM), protecting their monopolies (Intel), or shepherding their legacy systems (Microsoft), Jobs is delivering inspired, compelling digital alternatives to the old analog world. The guy has the creativity of Sergei and Larry at Google, the experience of Michael Dell, and the connections and persuasiveness of Carly Fiorina.

What It Means No. 1: To the enterprise world? Nothing. Jobs is digitizing the consumer world. This isn't about helping large companies clear checks, run supply chains, or manage inventory. Jobs has never understood the use of computing in large companies. The minute he or Apple mentions ¿enterprise,¿ run in the other direction.

What It Means No. 2: Consumer electronics vendors, whether they like it or not, will have to contend with a resurgent Apple and an omnipresent Steve Jobs. The company scored in the top five most-recognized consumer brands in Forrester's 2003 Tech Brand Scorecard — with numbers that have continued to improve.

What It Means No. 3: Watch for Apple to take its music strategy (elegant integration of the personal device, desktop management software, and online music store) into new spaces. Still cameras and video cameras would be obvious markets to attack. Making mobile phones easier to use and highly integrated with the desktop could be a big win for Apple. iSync with Bluetooth would finally make it dead simple to switch phones without trashing address books.

What It Means No. 4: Linux + Apple? Somehow, you know that Jobs won't be able to resist this one. If Jobs and team point their considerable innovation and creativity back toward desktop applications, they could blow a lot of new thinking into the market. Call it "iWorks" — an integrated desktop suite based on Linux. Apple would feature iWorks first on the Mac and then make it available on Intel machines. This would mean that 5% of desktops would have Linux desktops right out of the chute — a great start for the first serious Linux-based Microsoft Office fighter. This one's a stretch, given that Mac is based on open BSD, not Linux. But if the opportunity becomes compelling, I'll bet Jobs will move.

There aren't many return engagements in the technology business — just ask Phillipe Kahn, Fred Wang, Steve Case, and Edson DeCastro. That makes Jobs' ever-evolving digitization crusade such an amazing odyssey.

George

P.S. I encourage you to post comments. However, if you prefer not to post them on the discussion board, please send email to me at gfcolony@forrester.com

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