Social Enterprise

Apple, Facebook, and how 'open' went out of style in tech

The two hottest companies in the tech world are arguably both succeeding because they are a reaction to the problems of open ecosystems.

Steve Jobs and Mark Zuckerberg chat at the D8 conference. Photo credit: Asa Mathat

Last week, nearly the entire technology industry cheered as Facebook announced that it had finally decided to become a public company, in what will undoubtedly be one of the richest IPOs in Wall Street history. We can certainly forgive the tech world's irrational exuberance. After all, it's kind of like one of our hometown heroes just got selected as the No. 1 pick in the draft and is about to sign a groundbreaking contract with the New York Yankees.

Meanwhile, Apple recently revealed that its products generated $46 billion in revenue in the final quarter of 2011 and the company walked away with $13 billion in profit. It was the most profitable quarter ever for a tech company, and one of the most profitable quarters in the history of U.S. business -- only oil companies such as Exxon have ever made more money in a three-month period. If Facebook is the tech world's No. 1 draft choice, then Apple is its triple-crown-winning slugger and MVP.

On the surface, these two companies have very little in common. Apple is a finely-tuned hardware and software juggernaut while Facebook is a young, free-wheeling, highly-experimental web platform. Apple is one of the most secretive public companies on earth while Facebook believes that privacy is a relic of a bygone era.

However, the tech world's two hottest companies have one major factor in common -- they've both spurned tech's legacy of open ecosystems in favor of building a massive walled garden. Previously, the conventional wisdom was that the walled garden approach could be very profitable but couldn't attract the masses and would never scale. Apple and Facebook have both aimed straight at the conventional wisdom and steamrolled it. They simply built bigger gardens, and taller walls.

In many ways, the popularity of Apple and Facebook is a reaction to the problems that average users encounter with open ecosystems. In other words, it's no coincidence that these are the two most popular companies in tech right now.

Keep in mind that open ecosystems bring important benefits to users:

  • Similar user experiences across products from different companies
  • Commoditization, which drives down prices
  • User-centric controls and customizations
  • Portability of apps and data across competing systems

However, open systems also have their problems, and as technology has multiplied and ended up in the hands of a lot more people, those problems have become more acute.

Because the product needs to run across lots of different environments, it inevitably gets dumbed down to the lowest common denominator. This often means missing out on the opportunity to quickly and broadly implement cutting edge technologies and innovations. In proprietary environments where one company controls the whole process, that company doesn't have to wait for consensus on standards, it can move quickly and unilaterally. That can be translated into a competitive advantage in a quickly-evolving industry.

Open systems can also lead to the "Wild, Wild, West" effect. By design, open ecosystems almost always have low barriers to entry to participate in the creative process so that the community can help refine and extend the product. However, that also opens the door for malicious attackers and other knuckleheads to intrude on the user experience.

For example, in the PC world (a semi-open ecosystem), this resulted in the rise of spyware and malware problems that have bogged down computers and compromised user security and privacy. Apple's closed systems (Macs, iPads, and iPhones) occasionally suffer from some of the same issues, but not nearly to the same extremes as Windows PCs, or now Android devices. However, the price of that peace of mind is that you are locked into Apple devices. Any apps you buy for an Apple system will not run on a system from any other company.

On the open web, you don't usually have to spend much time on blogs, photo sharing sites, or message boards to experience the unpleasantness of nasty, anonymous jerks who like to launch themselves into conversations in order to harass people for sport. One of the reasons for Facebook's rapid rise was that created a way to have online conversations with the people you wanted to talk to, without the jerks. It is a private, proprietary network where two people have to mutually agree to see each other's content and be able to comment on it.

Of course, as Facebook rose to become the Internet's largest site and accepted more and more money from investors, it veered away from that original mission. It now wants users to make most of their information public (so Facebook can better monetize it), while still keeping that data locked up in Facebook's servers and not allowing users to export it. This is one of the main reasons why I think Facebook is destined to be disrupted. Users don't like it when you change the rules on them in the middle of the game, and that's one of the reasons why consumer satisfaction with Facebook is lower than the IRS. Nevertheless, there's no denying that the meteoric rise of Facebook was partly a reaction to some of the problems of the open web.

Now, the general expectation in the tech world seems to be that the pendulum will swing back in favor of open systems once people get annoyed and tired of the lock-in of closed, proprietary systems. I'll admit that's been my assumption for the past couple years. But, there are no signs that it's going to happen any time soon. The mounting successes of Apple and Facebook are evidence that closed systems are still on the ascent. In fact, as the ownership of the tech world passes from the hands of the geeks and into the hands of the masses, the more alarming question is, "Are the masses simply more comfortable with closed systems?" If the answer turns into an unequivocal "yes," then we are in for a bigger and longer-term sea change than most of us are talking about right now.

Other takes on this issue

About

Jason Hiner is the Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He is an award-winning journalist who writes about the people, products, and ideas that are revolutionizing the ways we live and work in the 21st century.

37 comments
Raife_1
Raife_1

I'm sorry, but the security-nightmares within the "PC" (Windows-PC) environment are most certainly -not- due to "open" standards. That very claim is rather ludicrous and indicates serious ignorance of both the actual facts, and real security-problems.

Computer_User_1024
Computer_User_1024

I got an iPhone through ebay recently and though I like the device I found myself wishing that I had bidded on an Android based phone instead because I want the freedom it would allow me. I want nothing to do with most Apple products because I do not like their draconian control of both the software and the hardware. If they would allow me to install their OS, which is a closed version of an open system on my choice of hardware than I would consider it, but as it is I want nothing to do with their computer hard ware because of proprietary and closed nature of everything they produce. I build my own PC's and do not like companies like Apple, Inc. dictating what hardware I use. I can build as good, or better a machine as what they provide for a lot less price and then install Windows or Linux on it. Who needs Apple?

gvtooker
gvtooker

Sorry Jason, but this article is WAYYY off! 1. Facebook has its share of jerks, scammers, and other knuckleheads. I have been approached a number of times by random people trying to direct me to adult sites and whatnot, friends that have been hacked playing the various games and SPAM for related crap, especially Farmville. That's not to mention all the technical glitches that seem to plague FB in general. I would say that good marketing and the attraction of the games like Farmville have more to do with FB's "meteoric rise" than it being closed and proprietary. If anything I personally know quite a few friends that became rather pissed off with Zuckerberg's cavalier attitude towards internet privacy and have gone off elsewhere, primarily Google +. 2. As far as Apple, there are a number of problems with your argument. First, much of Apple's success came as a result of products not directly related to the computer, such as the iPod. Second, the success of the iMac, Mac Pro, and other systems really didn't start to happen until OSX allowed Windows to boot natively, a few bad moves on the part of Microsoft (*cough* Vista *cough*) not to mention the resultant rise in other apps that are now Mac friendly. Anymore a computer is only as good as the supporting software. I won't argue that the Mac is generally less vulnerable to spyware/malware than the PC, but to imply that is the big reason behind Apple's rise is off the mark.

BrewtusAus
BrewtusAus

The average non-tech apple user is happy to buy an apple and stick with it for the life of the product, like they do with their car. You buy the parts and accesories that fit your car and don't expect Ford parts to fit your VW. If something is wrong with your Apple, you go to Apple to fix it. If something goes wrong with your PC, do you go to the HW manufacturer, the OS supplier or the application supplier? Thats too painful for the average non-tech user. Next time round you might change change your Chrysler for a Toyota but with IT, you only have Apple that is a complete package.

BillGates_z
BillGates_z

But your thinking is pretty bogus, as others have already pointed out.

bbb
bbb

The open architecture of the Apple II was a major factor in IBM's decision to create an open architecture for the first PC. Who would have expected this from Big Blue?

mbouckaert
mbouckaert

Maybe you should habve titled this: "How OpenSource provided the underpinnings for two very successful companies". Apple is based on BSD. Channel Steve: Without BSD, neither MacOS nor iOS would exist. And, TTBOMK, FaceBook builds heavily on top of opensource. Whether building walled gardens inside the set of capabilities that are freely available is ethically sound, is a different question. At any rate, the walled gardens are only the icing on the cake. Whether some of these will endure is a completely separate topic too. Personally, I find BlueGene (also built on an OpenSource foundation) to be a more valuable contribution to the world than either Apple products or Facebooks. And I don't see walled gardens providing solid foundations for anything.

raul62
raul62

I will not deny the problems open source still has. They're always there. But you cannot say Apple's technological decisions are driven by those problems. Apples has been all along its life a company which owned its technology, and controlled the partner's ecosystem. From hardware to software, no piece from Apple was intended to be opened or public domain. That's absolutelly the oposite as you say in the article. Apple followed in terms of openess, a completelly aged path, similar to the old big computer manufacturers. And it worked. That's clear. As Facebook was borned following Apple's business model, the argument comes a bit weak.

wdewey@cityofsalem.net
wdewey@cityofsalem.net

Most of the more successful open source projects have either gone to a licensing model or been purchased by a company looking to acquire the capability. Open source is good for innovation, and building up a user base, but it is poor at turning a profit. People can argue philosophically about companies and profits, but if you aren't making money you don't eat. Bill

drewtorn
drewtorn

right on, I totally agree with your take on Apple.

rpollard
rpollard

You're a techie and techies love to tweak. Most of the population does not. That's who needs Apple!

Neon Samurai
Neon Samurai

Look at all the gearheads that tweak and muck about. Modding a car so you can drop a hemmy into it.. well yeah, using motors not designed for the given chassis isn't obscure. One doesn't expect Lenovo to ship a computer with Dell branding any more than one expects GM to ship Ford branded gear but that's not stopping interested folks from trying it after the fact or building out there own car entirely. Once you buy the car, the vendor doesn't really have much say over what you do with it beyond voiding your warrently. compair that to how Apple tries to maintain complete control over your device after point of sail. Resell Ford branded cars; you can do that. Produce replacement parts for Ford branded cars; again, common. Take Ford parts and include them into your own cars for retail; yeah, that happens too. Do any of that with Apple gear and your risking a lawsuite.. take an Apple part (osX) and sell non-Apple hardware with it.. see how "open" the company is. In the history of the horseless buggy, it's a relatively recent trend that they are pushing for more closed systems; limit "outsider" access to the car through special expensive tools, limit "outsider" access to the car computer through propritary protocols and error codes. I'd say the auto industry was open the moment H Ford had a competitor and is more recently trying to squash that and drive out non-vendor mechanics and vehicle owners.

Neon Samurai
Neon Samurai

IBM seemed to have no intent on a more open system until the BIOS was reverse engineered and they where faced with IBM compatibles.

MarceloNunesPOA
MarceloNunesPOA

And you may not miss the "HipHop for PHP", an open source PHP to C++ translator, that allows Mr. Zuckerberg and his team to write their code in good old PHP and still be as efficient as a hightly optimized C++ code, while they have time to enjoy the biliions of dollars they're earning. To develop HipHop, Facebook has hired some of the best compiler develpers in the world, and they made it open source since 2010. It it propably the heart of all Facebook technology.

danbi
danbi

CUPS is one example that proves you wrong: it is an Apple technology that was contributed to the open source community.

CharlieSpencer
CharlieSpencer

This isn't about open source. This is about companies that tightly control their hardware and software products. This includes controlling who is allowed to make and sell compatible hardware and software, and what those third-party products can and can't include. The "Microsoft on Intel" platform is far more of an "open ecosystem" than Apple; neither of those companies imposes significant restrictions on makers of compatible products. The Facebook ranch allows a much shorter list of rodeo events than the rest of the Wild Wild Web.

danbi
danbi

I pretend to have good knowledge of computers. There is not a single day, when I don't have to do a lot about/with computers. Yet, I would prefer to not have to babysit and Tamagotchi my mobile phone! If I will have to -- then I will be inclined to go fix the mess of the cellular operator, the ISP, whatever web site, Facebook, everyone. :)

danbi
danbi

"Do any of that with Apple gear and your risking a lawsuite.." Complete nonsense! Did you know, that you can in fact buy third party replacement SSD for the Macbook Air ... from a number of vendors? Complete with tools and instructions on how to copy data over, open your laptop, replace the SSD drive etc. Not much different than how you buy replacement parts for your Ford or whatever, from a third parti. And we have yet to hear of Apple suing any of these companies for providing parts for their computers!

Neon Samurai
Neon Samurai

Wasn't CUPS open source technology that was baught by Apple but left under it's open source license? I don't recall Apple being involved in starting and development of CUPS until they baught out the original ownership.

AnsuGisalas
AnsuGisalas

do mean to imply that beer is? That would be a consolation, I guess.

danbi
danbi

How is Microsoft on Intel any more open, than say OS X on Intel, PowerPC and ARM??? Contrary, it is more closed, because in order to run Windows you must use Intel architecture computer.

CFWhitman
CFWhitman

Apple did not develop CUPS. It was developed by an independent team who made it open source. Apple did indeed buy it from them. You can buy the copyright on open source software just like the copyright on anything else as long as the copyright holders are willing to sell it to you. Of course, Apple could not rescind the open source license on the code that was already released. If they had continued development of new code for the project under a closed license (which they had the option to do being the new copyright holders), then the old open source code would almost certainly have been forked into a competing project. Apple did not want that to happen, so they kept CUPS open source.

danbi
danbi

You cannot buy open source ownership, by the way. If you don't recall something, doesn't mean it did not happen.

CharlieSpencer
CharlieSpencer

"Sheep", "clueless", "idiotic:; were those necessary? As to replacing OS, few Windows users do that either; that's why Linux would benefit from a major vendor offering it as a pre-installed option.

NickNielsen
NickNielsen

[i]Apple computers have always been pretty 'standard' PC -- nothing special nothing exotic.[/i] You're correct, other than Apple employing Firewire and USB for their system interconnections before anybody else did, there was never really anything special about the mainstream Apple PCs, other than the external design. [i]They are in fact much easier to support, because the variety of hardware is smaller and generally missing is the "junk hardware" that you find elsewhere.[/i] And the variety of hardware is smaller because of the closed Apple system; if Apple didn't approve it, they didn't support it. That's what kept the 'junk' hardware out of Apple PCs.

danbi
danbi

Good for others, that Apple pre-installs the OS! They can concentrate on their application software. Why would Apple license their OS to someone else to install? They did try that years ago, and the results were subpar. Because the other vendors significantly reduced quality etc. That same approach was tried by SUN, as well and SUN too, decided to not allow such licensing. You obviously don't use Mac computer, so you can't know. There is not restriction on Mac computers to install any software, from any place. You can even modify the OS, if you know what you are doing. There is nothing related to warranty in this process...

danbi
danbi

It is still PC, no matter if it is made by Apple or HP, or DELL. Apple just provides tuned and polished OS for that PC, while all others either rely on Microsoft for the software, or leave it to the user to install whatever they wish or can. Apple computers have always been pretty 'standard' PC -- nothing special nothing exotic. They are in fact much easier to support, because the variety of hardware is smaller and generally missing is the "junk hardware" that you find elsewhere. But anyway, one can believe what they want.

danbi
danbi

There are people, who claim they have to run Windows for one reason or another. Yet, they prefer the Macintosh hardware (the iMac, Macbook Pro and Macbook Air rarely have comparable alternatives in the generic "Intel" market). Those knowledgeable people are not sheep, they just use the tool that suits them. By the way, comparable spec non-Apple alternative is usually more expensive. Of course, it is indeed a question why those other than the above mentioned folk who are well aware what they do, would want to replace OS X with Windows. Most people who moved from Windows to OS X never look back.

NickNielsen
NickNielsen

You can purchase hardware for the Intel architecture from almost any vendor and be reasonably assured that, with the proper drivers, it will work in your Intel-based PC. Unless it's a very recent change, the same does not apply to Apple.

ThePickle
ThePickle

> By the same means, an Apple computer, say an Macbook is just as > open. You don't have to run OS X on it (many actually run Windows > on MacBooks). No, actually, many DON'T do that. People who buy Apple computers do it because they're sheep, or because they're too clueless to know any better. The vast majority of them would have neither the knowledge nor the incentive to remove their Apple OS and replace it with Windows. How would that even make sense? If you wanted to buy a computer that runs Windows, why on earth would you buy a much more expensive Apple to do it? The premise itself is idiotic.

CharlieSpencer
CharlieSpencer

Find a manufacturer other than Apple that pre-installs OS X on any processor; Apple won't license that. Microsoft doesn't care resells their OS, as long as the license fees are paid; pre-installed Windows vendors are a dime a dozen. Look at the restrictions place on apps available from the Apps Store. Be sure you use only iTunes when you do. iToys may have a Unix lineage, but try doing what you want without breaking the warranty.

danbi
danbi

Care to share with us what restrictions does Apple place on software vendors? OS X is UNIX. Almost any software that can run on UNIX is able to run on OS X (subject to available APIs, that is). In this sense, OS X is just as open as Linux. One can argue that with OS X developers have actually less restrictions, because some (commercial) APIs are just not available on Linux or other UNIX platforms.

danbi
danbi

"Do you have to buy the computer from Microsoft? Or Intel? No. You can purchase your computer from any vendor you like. Do you have to use Windows as the OS on that computer? No, you can use any x86-compatible OS you want." How are those two related? What you call "open" is the IBM PC architecture. That computer wasn't designed to run Microsoft software by the way. In the IBM PC you can use various hardware and various software. Nothing to do with Microsoft. By the same means, an Apple computer, say an Macbook is just as open. You don't have to run OS X on it (many actually run Windows on MacBooks). You can connect any standards compliant periphery to it, from any vendor (including say, Microsoft Mouse) etc. etc. So what is the argument? By the way, I said "Intel architecture" not "Intel processors". There is some difference and then, one can argue that x64 is really ADM's architecture, not Intel's.

Raife_1
Raife_1

Actually, Microsoft -is- apparently trying to manipulate "x86-compatible... computers" in such a way as to undermine alternate, (I.E. "Open Source") OSes. Just sayin'...

CharlieSpencer
CharlieSpencer

Thank the gods, someone who understands the topic. My choice of "WIntel" in my comparison was strictly based on that combination being well-known and easily recognized, and was not intended as the only possible OS / processor combination. MS on Intel is more open than OS X on Intel because MS doesn't place as many restrictions as Apple does on what software vendors can do under its operating systems. OS X will indeed run on more processors, but the number of applications isn't there. I consider the range of apps available to outweigh processor options; your opinion may differ. On any processor, Linux is more open that MS or Apple. Not as in speech, not as in beer, not as in source, but as in restrictions placed on developers.

NickNielsen
NickNielsen

Do you have to buy the computer from Microsoft? Or Intel? No. You can purchase your computer from any vendor you like. Do you have to use Windows as the OS on that computer? No, you can use any x86-compatible OS you want. Do you have to use only Intel- or Microsoft-branded hardware inside it? No. In fact, you don't have to have [u]any[/u] Intel hardware at all inside your Wintel computer. You can plug your AMD processor into an Asus mainboard with your Nvidia graphics adapter, Seagate or Western Digital hard drive, and TEAC DVD drive, and see the results of your work on a Viewsonic monitor. That's what we mean by open ecosystems.

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