The Counterintuitive CEO

App Internet: The Next Wave

August 27, 2010

Like most CEOs, you're probably feeling good because your company finally has a great Web site. But don't get too comfortable. The way you connect to your customers is about to change again…

Two ways of computing have dominated over the past 20 years. The first I'll call the "Microsoft model" — where local personal computers do most of the work. The second model is the Web/Cloud model, in which most of the work happens on remote servers. Both are outmoded. The Microsoft model fails to leverage the economies of scale in the Cloud; Web/Cloud fail to leverage the exponential growth in the power of local storage and processors. 

So what comes next? Something I call the "App Internet." 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.

What does the App Internet mean? The Web, as the dominant software architecture of the Internet, is dead — for once I'll agree with Chris Anderson over at Wired. The information within App Internet is not easily searchable — so Google is set for a long fade. Microsoft's deer-in-the-headlights act continues as it sucks the last dollars from a device-centric Office. Apple continues to cruise — the company is right at the App Internet sweet spot. Facebook faces danger because it is too Web-centric — note that the company still hasn't shipped an iPad app. Newcomers like Flipboard, who can elegantly repurpose old Web content like Facebook into the App Internet world, will boom — a lot of cool new companies will occupy this space. Some of the players in the software-as-a-service crowd will sense the change and slide over into App Internet (salesforce.com?) — but a bunch will stay too long at the Web party and get slaughtered. AT&T and Verizon get more bits to carry — their problem will be delivering enough bandwidth to keep up with the demands of the new model.

How about your company? Neff Hudson, the head of customer experience at the insurance company USAA, said it best at Forrester's Customer Experience Forum, back in June: "We are moving away from the Web and toward Internet-centric applications. That's the future of customer experience for our company."

Translation: As CEO, start pushing your CIO and CMO toward App Internet. The Web was just a warm-up.

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