In my last post, I talked about some of the ways that the iPad and social business software (SBS) both had tremendous opportunities to outflank Microsoft's dominance in the desktop document creation and document management space, respectively. Based on the responses to the article, it seems like lots of folks out there are wondering the same things about Microsoft's ability to maintain their dominance in these areas.

But, like any consultant worth their salt, I like to have it both ways, so in this post I want to consider the very real ways that Apple and SBS vendors could fail in their attempts to knock Microsoft out of the game, because their long-term success is far from assured.

Nothing Lasts Forever

You can’t dispute the fact that Apple has enjoyed a tremendous first-mover advantage with the iPad. I’ll admit that as I write this, I’ve seen my very first Xoom in an airport lounge, but that’s the exception that proves the rule: I see iPads all over the place and just about no other tablets in use.

However, first-mover advantage is never permanent. The history of computing in the last 50 years is a series of incumbent market leaders getting disrupted by new entrants who re-imagined the solution space.

You can read all about this in Clayton Christensen’s work, or just think about what happened to the iPhone: it exploded onto the scene, dominated what a “cool” smartphone should be, and then, when we all least expected it (or at least when I least expected it), the Motorola Droid carved out a whole new way to approach the smartphone, followed by a flood of awesome Android phones.

I can see a similar thing happening to the iPad in the not-so-distant future, and when it does, Microsoft will have a way back in to the tablet market. These new entrants will not be focused on beating Microsoft, as Apple is. They’ll be focused on beating Apple; and a core part of that strategy will be touting how natively they work with Office.

The question is whether Apple will have gained enough market share to make the play worth it…or would it have been better to play nice with Microsoft from the beginning? After all, if competing tablets are having trouble competing now, what would it be like if the iPad had a native Office app? Flash support?

Amazon’s Mistake

In all this, Apple’s at risk for making the same mistake that Amazon made with the Kindle: misunderstanding the true leverage of its product.

Now, before folks protest that the Kindle has been a huge success and a game changer in the way we consume books, let me explain what I mean when I say it’s been a mistake for Amazon.

When the Kindle came out, it was astonishing, groundbreaking -- most folks had never thought that an e-reader could be so compelling or have so much mass appeal.

And that cool factor came with a price tag: $399. And lots of folks shelled it out, not only for the first generation Kindle, but for the next as well. At the time, it seemed like yet another brilliant play for Jeff Bezos.

On this side of the craze, however, I see the Kindle as a huge miss for Amazon. It was their chance to pretty much own the delivery of electronic books by getting a Kindle into as many hands as possible. Once someone owns a Kindle, Amazon has a built in revenue stream as they consume more and more content through the device instead of through other media (print, internet, other e-readers).

The best way to do this would have been to give away this revolutionary device: buy $100 in e-books and get a top-of-the-line Kindle for free. Instead, Amazon charged $399 for it, which indicates to me either that they didn’t understand the true value of the technology for their business or that they were greedy (or that they hadn’t considered the razor blade industry as an instructive paradigm).

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In either case, if Amazon had done this, not only would they have had exponentially greater adoption of the device than they’ve had (with the correspondingly greater revenue stream), but no one would have developed competitive devices -- why would you, when there’s no money to be made off the device? No one else could have possibly competed with Amazon’s ability to deliver content, so they would have effectively locked down the market.

Instead, they now face direct competition from low-end readers as well as Barnes and Noble’s Nook, the color version of which, when rooted, can surf the internet and function as a poor man’s tablet. They also face indirect competition from the iPad and other tablets -- all of which is the result of missing the boat on the real power of the Kindle to drive their business from day one.

The question for Apple in all this is whether they’re operating under an analogous misconception about the true value of the iPad: is it about taking market share from Microsoft on the document management front (their current play) or is it about getting the tablet into as many consumer and business hands as possible?

If the latter, then locking out Office products is risky, because if a compelling tablet comes out with Office support before Apple gains enough critical business user mass, they will ultimately get boxed out of the business user market the way it has with their PCs and laptops.

Beat the Clock

Social business software (SBS) vendors are in a somewhat different position than Apple in respect to their attempt to outflank Microsoft. Their business plan is sound: meet the social business use case better than SharePoint 2010 can. Timing is an issue in this case, however.

Basically, these vendors have until the next release of SharePoint to capture as much market share as they can in the SBS market, because you can bet that Microsoft is going to amp up the social business capabilities in SharePoint 201X and give these vendors a real run for their money (as they did to ECM vendors with the release of SharePoint 2010).

And really, the buzzer goes off once Microsoft unveils a definite picture of what will likely be in the next release. Once that’s out, lots of IT shops will enter a holding pattern so they can evaluate SBS platforms against the new SharePoint -- making it more difficult for SBS vendors to make progress against Microsoft.

How much time does this give SBS vendors? Could be 18 months, could be 24 months…who knows? But I haven’t seen enough organizations moving on enterprise deployments of purpose-built SBS platforms to indicate that they’re grabbing market share as quickly as SharePoint is expanding its enterprise footprint at organizations. So time will tell.

The Final Word

That’s my best take on how Apple and SBS vendors may be dropping the ball versus Microsoft, despite the very real threat they both pose to the folks at Redmond.

As always, I’d love to hear what folks out there think: am I overstating the risks they face? Have I missed something that makes their success more certain…or that makes their failure more likely?

Jump in, and let’s get the conversation started.

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