Good Idea! Now find a better one.

I’m a Mac convert. I hadn’t used an Apple machine regularly since the Apple IIc when I was a child, but since January of this year I’ve been happily typing away on a Macbook.

Now I could launch into the typical soliloquy on how great my Mac is and how using it will cure Cancer and deflect asteroids. But really, I want to know why I can’t find a comparable experience on a PC? Have they really become commodities no different from pork bellies or soybeans? What’s missing?

Integrated Hardware and Software

Apple writes its own operating system, OS X, and designs its own hardware. It allows them to build desktops, notebooks, iPods and soon, iPhones, with a tighter, “it just works” feel.

They have less hardware to support which makes software development easier. At any given time they have less than 20 hardware products, which makes hardware development easier.

When you compare Apple to Microsoft, Dell, HP, Gateway, Toshiba and the rest, you see that Apple is just solving a smaller problem. They have more focus. And I think the heart of that focus is designing the hardware and software themselves.

So What?

So should Microsoft start building hardware to integrate with their Vista OS? No, No, No, No, and No. Microsoft is a software company. It’s what they do; it’s who they are.

Ok, how about Dell, HP, Gateway and Toshiba - should they start writing their own OS? NO. Definitely not.

So where does that leave us? Microsoft shouldn’t make hardware and the other guys shouldn’t write operating systems. We need something in the middle. We need to give Microsoft and all the PC makers the benefits of integrated hardware and software while also retaining the benefits of the highly competitive ecosystem that runs on Windows.

We can do this by transforming what Microsoft delivers and having Dell and HP do a little more software. Instead of delivering a monolithic OS that is slapped on every laptop or desktop, build a modular system that Dell and HP buy piece by piece and extend as necessary.

An example: A Dell laptop doesn’t need support for all the hardware that Windows supports. Strip out everything it doesn’t need and allow Dell to write custom modules that match their custom hardware. Next, drop the Windows interface and let Dell write a new one. It may not be much different, Dell could even leave it as it is if they want, but what we’ve got is a truly Dell laptop - one that’s tangibly different from an HP or a Toshiba.

The core software is Windows so all Windows apps run perfectly. Any special whiz-bang features Dell chose to innovate are supported at the OS level. And the interface has a Dell feel that targets their various customers — business, student, gamer — directly.

In other words, Microsoft provides the framework for other software like Office and Quickbooks to run. Dell writes software to tie that framework to the hardware and the interface for the user.

Dell, HP, Toshiba…What’s the difference?

When I was shopping for a new machine and looked at Dell and HP, I ran into a problem. How are the computers different? Same software, same buttons, same security and virus problems.

Aside from issues like customer service and warranties, why buy an HP over a Dell? Would I get more work done with the Dell? Will the HP be more enjoyable to use?

A while back Joel Spolsky wrote on his Joel on Software blog about how software companies work to commoditize hardware and hardware companies work to commoditize software. In his words:

Smart companies try to commoditize their products’ complements.

If you can do this, demand for your product will increase and you will be able to charge more and make more.

Hardware and software are, of course, complementary. Add in a few smart companies like IBM, Microsoft, Oracle and Dell all working to commoditize their complements and Voilà!, Computer use around the world has exploded on the back of lower prices.

But on the dark side we get the same laptop from Dell as from HP and both run the exact same software with the same features, same benefits, same problems. And we typically shop based on price and customer service - which is another way of saying, who costs less and will infuriate me the least.

Keep it Simple

If Microsoft is a software company, they need to spend less time on hardware. Less time building it, less time writing drivers for it. Include with windows rock solid support for all standardized components: hard drives, video cards, USB peripherals, Ethernet, Bluetooth etc. Drop all other drivers. Let the hardware makers write whatever custom drivers they need.

For HP to create an HP experience, they can’t patch hackneyed software on top of Windows. Push the HP digital experience deep into the system. Managing photos, printing pictures, manipulating images etc. Make it tight and a core part of the system.

For Dell, make configurability the heart. Dell assembled the system per your specific instructions. Now you can configure how you interact with it to whatever degree you desire.

For Toshiba, if business security is key, build it into the OS. Rip out the Windows Networking system and rewrite it if you have to. Lock down the machine and differentiate Toshiba.

Microsoft, Be Yourself.

What makes Windows, Windows, is the fact that all those Windows apps run on it. And that’s all Microsoft needs to provide - the ability to run Windows apps. Leave the rest to the computer makers.

You can even extend this to the XBox. Sell the core XBox software to run on consoles that other companies make. Let someone else figure out how to make money on a console - you can focus on the software.

And the customers are happy because just like their Windows Desktop runs all Windows software, their Nintendo XBox runs all Xbox software and has some innovative wii-hardware to boot.

Final Word

I’m running a Mac because it’s an excellent experience that “just works”. Closely integrating hardware and software allows Apple to focus, not on the features in the computer, but on how the customer uses the computer. It costs more to buy but it’s worth it.

Microsoft is trying to focus on everything. Dell and HP only think about their gadgets. There is a middle ground where Dell and HP go head to head with Apple. Hardware and software are commodities. But the experience of using a Mac and the ability to run Windows compatible software are not - and that’s where the money is.

Other Thoughts

Roughly Drafted’s lengthy discussion on how Apple’s low marketshare leads to high profit: They only sell in the lucrative niches.

Apple and its retail success - it accounts for 8,000 of it’s 20,000 employees. They built the first apple store in a warehouse. It helped them design the store around the customer, not how the company was internally organized. HT - 37Signals