A Game Changing Innovation Reaches a Milestone

One year ago today, Steve Jobs announced the iPad.  It came into the world with incredibly high expectations, and it exceeded them by every measure. 


It is a beautiful machine -- perfectly designed, finely crafted and an indispensable tool that adapts to a user's needs with incredible dexterity, as anyone who uses an iPad will attest.  It proved to be a truly disruptive technology instantly impacting netbooks, laptops, ereaders and the entire print publishing industry.


As with any great innovation, there were detractors, but most of them have fallen silent as the iPad raced to success. And there are imitators. Allegedly, there are many -- just waiting in the wings, prepared to imitate, because they have been left with so little room to innovate or differentiate.


After a year of predictions, only a scant few opponents have made it to market.  Of those that made it out, most seem like second string quarterbacks -- they function similarly but are not quite able to perform on the same level.  HP, Dell, Samsung, Toshiba Motorola and others will find competing head to head with this machine impossible unless they miraculously find a way to change the playing field in a meaningful way.


Those who have studied Michael Porter's activity maps might understand that this machine's perfect integration creates an inherent competitive advantage and a steep, if not insurmountable, barrier to entry. No other company can match the iPad's evolution from the vision of a genius, its unique processor, its long-life battery, an optimized mobile operating system, a well-conceived and robust app store, a true understanding of user interface and manufacturing and assembly processes intended to sell the iPad at a price that offers more value than any other digital device on the market.  Those were derived from choices -- at times hard and controversial choices such as abandoning Flash video and making a wholesale commitment to HTML.


But they were choices made without compromise, and that is the essence of the iPad's brilliance -- there are no compromises in this machine.


Love or hate Apple, the concept of innovation mated to use, craft and value is what seems to be missing in business today.  The idea that a brilliant mind committed to continuous innovation, flawless design and value that is enhanced rather than cheapened by its manufacturing process seems beyond the philosophical -- if not the operational -- reach of many companies.  


So, happy birthday, iPad.  You changed the way we think of computing.  Maybe the courage and commitment that led to your design can also change the way we approach innovation.

Connecting the Dots

I'm surprised it took so long for the mainstream media to connect the dots on recent acquisition activity here in Silicon Valley. For those of us steeped in both cloud computing and mobile telecommunications, the pattern has been clear for a long time. Nonetheless, I found it encouraging that the Valley's newspaper of record, the San Jose Mercury News, finally reported on the trend in a front page story today.

If you haven't been following the M&A action here in tech's heartland, let me do a quick recap.

• HP just today acquired 3Par for $2.4B after a fierce bidding war with Dell. 3Par's products combine virtualization software and hardware to increase storage capacity and lower operating costs, making them ideal for cloud computing applications. Also this year, HP acquired 3Com, Palm and Fortify Software.
• Intel acquired McAfee on August 19 and then 10 days later acquired Infineon. McAfee makes security software which is a critical element for both cloud computing and mobile telecom. Infineon makes wireless chip sets for three primary markets, security, communications and energy efficiency.
• Google has made a number of smaller acquisitions this year including Aardvark, a social media search engine for $50M, AdMob, a mobile advertising platform that's particularly popular with iPhone app developers, ITA Software, a flight information software company, and just last month, Slide, a social application company.
• In addition, Cisco Systems acquired Tandberg for $3.3B and Oracle acquired Sun Microsystems for $7.4B

The recent Silicon Valley acquisition frenzy, which has already seen five billion-dollar plus acquisitions this year, illustrates two irreversable trends in technology -- cloud computing and mobile telecommunications.

According to the IEEE, by 2014 smartphones and other mobile devices, such as Apple's iPad, will send and receive more data each month than they did in all of 2009. More than 75% of that information will come from Internet traffic and nearly all of the balance will come from audio and video streaming.

A big part of the increase in mobile data will come from cloud computing applications. Utility software (such as maps) will lead the way, followed closely by productivity tools (especially for sales, data sharing and collaboration), then social networking and search.

A senior analyst at ABI Research, a telecom analyst firm in Oyster Bay, NY, predicts that the number of people subscribing to mobile cloud computing applications will rise from 71 million today to more than a billion by 2014.

Asia will lead the way with the largest number of mobile cloud computing app subscribers, but North America will bring in nearly as much revenue because high-paying enterprises will have a larger slice of the pie here.

So it's no wonder that Silicon Valley tech companies are scrambling to acquire companies and technology that will give them an edge in either cloud computing or mobile telecommunications, or both. And if the month of August was any indication, there will likely be several more billion-dollar acquisitions before the end of 2010.