Business
Over the past few years, the public has mostly come to associate the voice activation capabilities of Amazon’s Echo and Google Home with smart speakers. But in fact these devices and others like them can be viewed as Trojan Horses being used by the world’s biggest technology companies in the war of home operating systems. From devices like the Echo and Google Home, users are now able to control their thermostats, blinds, cameras, locks, and entertainments systems. Will the company that develops the winning operating system for the smart home enjoy similar monopolistic power to that of Microsoft with desktop computing in the 1990s or to the market share Android and iOS hold in mobile devices today? Interviewees Episode Excerpt Microsoft & The Keys To The Castle Long before there was Google Docs and longer still before there were Microsoft Word and Excel, there was a dominant word processing program called WordPerfect and a dominant spreadsheet program called Lotus123. Those products are long gone, and not necessarily because Microsoft built better programs with Word or Excel. In the 1990s, Microsoft controlled over 90% of the market for operating systems for desktop computers. Through their relationships with PC manufacturers, they made purchasing their word processing and spreadsheet programs really easy. The result: Word and Excel became so dominant that WordPerfect and Lotus123 no longer exist. A few years later, Netscape built a dominant web browser. Then Microsoft developed a web browser that they distributed with their operating system Microsoft Explorer. The result: Netscape was sold in what felt like a fire sale to AOL. Today, there’s no Netscape. This story repeats itself over and over again. Real Networks developed a media player called RealPlayer, and then Microsoft developed a competitive media player that they tied to their operating system. In spite of a $1 billion settlement, Real Networks is no longer around. The conclusion: if you control the operating system, you control the keys to the castle. If you’re still not convinced of the power of the operating system, think about the power that Apple has with its App store, or the power Google has by operating the Android operating system. These are companies that write the rules in today’s modern smartphone and tablet-driven world. Have you ever tried to buy a book through Amazon’s Kindle app on the iPad? You can’t. That’s because Apple makes the rules and has said to Amazon: “If you sell a book through your app on an Apple device, you have to pay us a percentage of each sale.” Amazon will only sell you a book through a web or mobile browser so that Apple can’t put their hand in the till. If you think the battle for an operating system is only limited to computers, smartphones, and tablets, you’d be overlooking Tesla, Google, and others that are working on building an operating system for the car. In what could be the most important battle for years to come, most of the world’s largest and most important technology companies are now battling for supremacy in what will become the operating system for the home. The Evolution Of The Smart Home's Operating System There’s something very unusual about the evolution of an operating system for the home. In the case of the computer, we literally couldn’t have any functionality without the operating system. If we had no Windows (or before Windows, if we had no DOS), then there would be no Microsoft Word. On the smartphone, if we had no iOs, there would be no Snapchat. However, in the home, we had Nest’s smart thermostat before we had Wink or Apple’s HomeKit, since there was no central operating system for the home back when Nest launched in 2011. I spoke with Cliff Rosen, CEO of Whole Home Control, a company focused on design and installations for smart homes at the highest end of the residential market.