> I don’t think any company should have both horizontal (i.e. services) and vertical (i.e. devices) businesses.
I find it curious that Microsoft is the target of this criticism, and I am further curious what the author thinks about Apple.
I find it curious that Microsoft is the target of this criticism, and I am further curious what the author thinks about Apple.
Their software and services exist to differentiate the hardware and allow for a profit margin.
The Microsoft corollary would be if Apple offered iTunes, iCloud, etc for Android.
How is a company that makes OS X, iOS, iCloud services not a software company? Sure it sells hardware, but not hardware that's a brick.. People buy the hardware so they can use the software which pretty much means they sell a package that includes both hardware and software..
This is a useful way to understand Apple, but not companies in general. Movie theaters make the majority of their profit off of concessions, but they are not popcorn companies.
For what it's worth, I get your point, though. My preference is to use OSX over Windows these days, but that's because I find it to be the best intersection of *nix boxes (which all of my servers run) and a pleasant UI with great apps (because I'm still a human, and sometimes I tire of the command line). But look at the way iCloud took forever to become stable - if it's even there now - or the recent decreased in perceived QA (iOS 8.0.1, Apple Maps), and you can tell Apple's focus isn't on software as much as hardware.
I believe Apple is a product company. They make things that people want to buy and use. Their products are built from a combination of hardware and software/services.
Microsoft is also a product company. The difference is that they make a lot of different types of products. Some are things people buy and use like Xbox, Surface, and Lumia. Some are "platforms" like Windows and SQL Server. And they still sell "software" like Office.
Right now the services Apple provides are all about fulfilling features that consumers want: email, cloud storage, being able to buy content, and apps. They're meant to augment and also perhaps cynically lock consumers into Apple's sphere. The hardware devices sold at high margins make the money. This may change, and we might also see a two Apples where apple starts selling its services with higher margins for enterprise.
Incidentally long ago Apple really dominated in education. Most of the 80's Apple IIes and macs were popular in K-12, but that went away in the later 90's. Now iOS, in the form of iPads, are making inroads in education once again, competing with Chromebooks. Education isn't enterprise, and I don't see any services Apple would offer schools, but it's related.
Almost every where you look though, Microsoft is under assault. I think the last remaining stronghold is the Windows PC workstation. I don't think Apple, Linux or Android have made any inroads here. I can see Chromebooks becoming more relevant in the future, but for now workstations are dominated by Windows and probably will be for the next decade. The enterprise level services Microsoft provides here with ActiveDirectory and sharepoint, and the sophisticated controls for deploying Windows workstations across big organizations is pretty unrivaled. Maybe RedHat is also in this space, but not at the level of Microsoft.
New and improved provision schemes will make this even more viable in the future, where applications and data that belongs to the employer can still be kept reasonably secure no matter who owns the hardware.
At the other end of that equation you have a consumer who has a shiny new phone, and is being asked by her employer to yield control of the new shiny to the enterprise. Not appealing, when said consumer foots the bill for the phone, data and calls.
That conflict will result in CYOD (choose your own device), I think. And if we get a company phone, will mean we walk around with two phones. One fore work, locked down and able to access corporate email and SharePoint, the other for play, which has no corporate policy applied to it and only has Internet access.
Which is exactly what happens in a BYOD scenario and the process is getting better for both employees and employer. For example, my employer can now "wipe" all my corporate data on my iPhone while leaving all my personal data intact. Of course, as long as I have their data the security policy (password on start, device encryption, etc) is enabled.
We do have CYOD but we only facilitate the connection between the employee and the provider -- the employee owns the device. Mobile devices are very personal things and nobody wants to carry two of them.
* Tesla - sells devices (cars) and services (auto repair, charging stations, consulting, etc) * Equal Exchange - sells devices (Cocoa, Coffee and Coffee gear, etc) and services (reports on working conditions and other quality control data) * A private university - sells devices (classrooms, living space, all sorts of retail items) and services (classes, research, community outreach, much more)
(getting more abstract)
* A trial lawyer - provides devices (a body to stand in place of a defendant, relevant evidentiary media materials) and services (research, strategy, etc) * A restaurant - provides devices (table, food, decor, ambiance) and services (cooking, consulting, food sourcing)
OP may say that the intended target of this critique is the "tech" sector (ie, "a horizontal business should be great on every platform, while a vertical business should be differentiated"), but it looks like that becomes a capricious distinction the closer you look.
A university needs to provide compelling courses on research from all sources, including other institutions of higher education, while still being differentiated in its "vertical" market.
A restaurant needs to source food that will excite its clientele (again, even sometimes from various types of horizontal competitors) while still being vertically differentiated.
And so on.
Providing both horizontal and vertical components (whether organized into separate subsidiaries, subcontractors, divisions, or whether blended entirely) is a very old concept and is the natural course of maturity for a successful model.
But what about the other examples I've named?
A university sells education. Classrooms, dorms, teachers, etc. are all part of the same 'supply chain' for education.
A trial lawyers sells legal services. Research, evidence, appearing in court, and so forth are just incident to the basic legal service provided.
A restaurant sells a 'dining experience'. The food, wait service, and so forth are all part of that same experience.
What OP means by a company that has both horizontal and vertical businesses is a company offering something as a standalone revenue-generating output (the "horizontal" business) and something else that incorporates that standalone output as part of another output (the "vertical" business).
This would apply, for instance, to a fast food company that not only sold hamburgers via its chain of fast food restaurants (vertical) but also supplied those same hamburgers to other, possibly competing competing fast food restaurants as a separate business (horizontal).
An iTunes account is required for App Store purchases, but that's about it. You can load on Google e-mail, maps and browser after that, if you wish. The point is that Apple doesn't make money from its services, so it has less of an incentive to stop you.
http://www.anandtech.com/show/8633/apple-q4-fy-2014-fiscal-r...
The debate over whether Apple makes money off hardware or software is ridiculous. Every iPhone contains both Apple hardware and software, and works in concert with Apple services, designed to be a cohesive whole. It's ONE experience, designed top to bottom to work together. That's Apple's entire value proposition.