Monday, July 18, 2011

Is the Web dying?

Recently, George Colony,  CEO of Forrester Research, predicted the future of what he calls the "App Internet" in this blog post. To quote he says "In this model, powerful local devices (PCs, smartphones, tablets) run applications that simultaneously and seamlessly take advantage of resources in the Web/Cloud. If you want to see this model in action, check out iPhone and Android applications." He goes on to declare, somewhat controversially that the "The Web, as the dominant software architecture of the Internet, is dead". Colony also casts a doubt over the future of the cloud internet, while declaring that Microsoft's device-centric software approach is already dead.


There are figures that back up Colony's prediction. This report by Nielsen indicates that in the US, iPhone  users have downloaded an average of 48 apps, while Android users have downloaded an average of 35. Also users on both platforms report using  apps multiple times in a day. Given that these are the dominant smartphone platforms, it is a no-brainer that the majority of smartphone users are already on the "App Internet". Steve Jobs is betting on the App internet, noting that iPhone consumers are spending all their time on apps today, rather than on search. The worldwide smartphone application market is touted to reach 15 Billion dollars in 2013. 




While today the term Apps is synonymous with Apple's App Store and the Android marketplace, it is easy to forget that there was life before the iPhone! Nokia's Symbian platform was the market leader through the first half of 2010, and a wide variety of third party apps developed for the platform (Snaptu, anyone?) supported both the smartphones and the feature phones that ran Symbian. Both Palm and Microsoft also offered apps. But it was Apple who best leveraged the potential of apps to maximise the usage potential of a smartphone. Apple recently announced the latest app store statistics and the they are impressive. 425,000 Apps till date, 15 billion downloads across 200 million consumers of iOS devices. Android Marketplace is rapidly closing the gap, with over 200,000 apps and growing.


In the simplest sense, an app is just a piece of software designed to run a certain program on your phone. In some cases, the program is already downloaded onto your mobile device (games, productivity) and in some cases, the app accesses the internet to fetch or refresh content (news, a website etc.) In the latter case, apps become your gateway to access the web - rather than open the browser, you would directly go through the app. It's easy to see why we prefer the app route - typing is something we try to minimise on a handheld device, and the app ensures that content is rendered smoothly in a viewer-friendly format. 


Coming back to Colony's point, is the app the future  of the internet? Here are some of my thoughts;


1) Can apps keep up with our browsing behaviour?
Apps work very well for a certain type of browsing behaviour called mission specific or task oriented browsing. As the name implies, this suggests that on our mobile devices, we tend to look directly for what we want (news, stock update, cricket match score etc.) rather than spend time browsing. In this scenario, apps are the answer, as the user is focussed on saving time, and this is exactly what an app does. It guarantees a consistent and reliable output for a specific task you wish to perform.


But I do not believe that all browsing will become mission specific. A lot of browsing will remain exploratory as we increasingly use handhelds to substitute, rather than supplement our PCs. As I write this blog post, I have 7 tabs open on Google Chrome to point to links, and I am simultaneously Googling information and checking my facebook and twitter accounts. The browser allows me unparalleled flexibility and width of access which I cannot imagine substituting with an app. Apps require a linear/ vertical usage - by definition, an app has to perform a focused function and my brain does not work that way all the time. Even multi-tasking with several apps running cannot really re-create the experience of lateral browsing. Sure, mobile devices today have inherent hardware and software limitations that prevent them from behaving like my PC. But the barriers are melting away fast as processor speeds have already approached netbooks and RAM has surpassed them! And with a tablet form factor coming in, I believe that operating systems will also accommodate better browsing.


So, rather than more or better apps alone, I would look for better and more powerful browsing experience on a mobile device.


2) The price of usage
Apps have created an ecosystem of third party developers who write for one, or multiple platforms. It is obvious that you expect and deserve to earn money for writing apps! However, monetising apps continues to remain a struggle, and as a user, I see why. I am used to paying for a handset and yes, even an operating system and basic software, but I am not used to paying for specific tasks that I want to do. For instance, let's take an expense tracker app. It's cool to have, but rather than pay extra for it, I would use the Excel spreadsheet on my PC I have already paid for. I want to note that this does not hold true for content like music, movies etc. which I would have to pay for either ways. But if it comes to paying for replicating a function that I can already do on my PC, either free, or with a paid software, I would not purchase a standalone app for a mobile device. The web model operates here and companies like Google have a thrust towards providing a lot of stuff free on a web-based structure. If I can open a website for free, would I need to pay for an app to do that? Maybe, maybe not. This 2010 survey by Pew Internet seems to support my theory. 


In a nutshell - for apps to thrive, there has to be a thriving ecosystem to earn money from them.  If paid apps don't take off, the industry will have to explore how apps can be monetised. And till this happens, the app ecosystem could well develop into a bubble that bursts. Or it would remain stunted, with a variety of free (but maybe not so necessary) apps and a few money spinners. Apps need to take off beyond gaming, for the app internet to become a reality. Or maybe a Snaptu type approach (bundled apps) would work. 


3) The winner decides
There are a number of stakeholders in the mobile and handheld industry. Different operating systems, handset manufacturers, operators, developers. As with all cutting edge technology, the industry will decide where to take consumers. And each player (at least today) seems to have different stakes as to where they want to take consumers.


Apple has the biggest stake in the app internet, and very little in the Web, or the Cloud. This is not only because the app-store based model is profitable for them. It is because the app based model streamlines the user experience which is paramount for Apple. 


For Google, the web and the cloud are the foundation of their business model. Apps are a means to this end, therefore my bet is that Google will ensure that all three are furthered. Google defines themselves  as a search, ads and apps company and the definition implies that they have a stake in your browsing, as much as in the app space.


Microsoft is making a transition from boxed software to the cloud. While the company is trailing in the mobile stakes, they have a reputation of coming up from behind to reclaim market dominance. 


Apple is currently the world's most profitable technology company, Google's Android is the largest smartphone platform and leading analysts predict that the Microsoft-Nokia combine could garner upto 20% of mobile operating system share by 2015. 


Colony's prediction of an app driven internet comes as a timely reminder to corporates to move beyond a web based model. But I am not sure that the App Internet is the only future. Going ahead, the app, the cloud and the web will all play a role and it will be interesting to see how it plays out.


Sources : Forrester Research, NielsenSoftpedia