Hardware is the new software; all the hot startups are gadgets

Back in 2006, Tim Berners-Lee said in a New York Times article that, “Web 3.0,” was all about the semantic web. Machine to machine, rather than person to machine. In parallel to this, we’ve had an explosion of screens, devices and internet connected things. A few years ago at CES in Las Vegas, they debuted a twitter connected refrigerator. Sure, like I need my fridge tweeting, “Jeremy forgot the OJ this morning.” #Jeremysfridge – no thanks; if I’m going to have anybody in my life or anything in my life tweeting lame jokes, I’ll do it myself. So why are all the new gadgets interconnected and talking to each other? Simple. If your devices don’t talk to each other on your behalf, they’re out of synch.

Being out of synch means that your phone no longer knows what you have on your home and work calendars; your fitbit doesn’t share and measure the progress of the morning run and worst of all, when you read an ebook on your kindle then fire up the iPhone while in line at the grocery store, you have to guess at the last spot you were when reading. That sucks, right? Exactly. So machine communication is already here, part and parcel of the new Paas, Iaas, or Saas; firmly embedded in the cloud. With API’s, near every device or service becomes an ecosystem. If you do a quick scan of the big technology players, Apple, Google, Amazon, what do they have in common? Hardware. Twitter and Facebook are both busy brokering deals, while Google is quickly moving to dis-intermediate them by owning everything from the hardware to the next level, the software, and finally your identity and connection on top of the stack.

Why would your company care about having a hardware strategy if you’re not in that business?

Taxes. Every platform has an entry fee, every gatekeeper wields ultimate control over the ecosystem they engendered. Google is the new Microsoft, with the largest and most open ecosystem for devices. Apple might be sucking the profits out of the category hand over fist, but when you are the leading tech firm, there’s only one way to go. Just ask Microsoft what direction that is. Interestingly, Nike seems to get it, and they’re fast developing the skills and capabilities to play well in the new machine driven world. When and if they’re fuelband takes off, they have the same opportunity as Google, or Apple, charge for the ecosystem, tax the participants, drive recurring revenue – or keep it open, and own the market.

If this trend wasn’t on your radar, you’re welcome 😉 If it was already, I look forward to having your robot talk to mine; they can do lunch on our behalf.