Developers unite blog

In the past year and a half, internet companies, namely social networks, have broken ground on platforms that will directly influence and dictate the the internet of tomorrow: how it works, who uses it, what it has to offer, and how money will be made.

A host of social networks, including Facebook, Myspace, and Friendster have created open APIs (application programing interfaces), where third party developers can build programs or widgets, which can then be used by and distributed to members of their social networks. This fierce competition has led to a variety of new rich internet applications including favorites like “iLike” and “Top Friends.” What is this war leading to? How have these new advancements influenced the rest of the internet thus far? How will third party developers influence the future of the internet and the personal computing experience?

Historically speaking, developer platform warfare is nothing new. Even before the advent of the internet, Microsoft and Apple battled each other for years in the late 70s, each company tenaciously attempting to develop a platform to attract application developers. These early platforms evolved into modern day operating systems, such as Windows and Mac OS. The goal was simple: develop an open platform that would attract as many outside developers (application creators) as possible. The strategy was even simpler - the more developers that would sign on and build applications for the operating system, the higher the value of the operating system. The new applications would cater to businesses and consumers worldwide: law firms, government agencies, financial companies, small businesses, and all types of people around the world. In the end, Bill Gates and Paul Allen (pictured right) convinced developers that their OS was the best - the rest is history. Thousands of developers created applications - word processing programs, spreadsheet programs, etc. Microsoft won the battle, and nearly 30 years later, the company’s market value is a cool 257 billion dollars. You get the picture. Are social network companies waging a similar war?

You bet - the internet has only increased the size of the playing field. Instead of development only being practiced by a group of super nerds with unique technical know-how (sorry Bill Gates and Paul Allen), the barrier to entry in the social network developer space is extremely small and virtually insignificant. Although the competition is fierce, a large variety of application design programs exist to assist the not-so-super-coder developer build applications with relative ease, as opposed to the early days of Microsoft when much of the material was created from scratch or constructed using proprietary tools. These modern developer tools can be found in a popular program like Adobe’s Flex 3. The implication - an abundant influx of viral applications have hit the market in a relatively short amount of time. With many of these applications offering similar services, how will this market pan out? Aren’t many applications supposed to be a good thing?

David Gal, professor of management at Northwester University, recently elaborated on this issue in a VentureBeat article. Gal suggested that the best applications won’t necessarily rise to the top, and that so much competition in a an internet-style environment can actually be a negative thing:

Darwinian selection does not work so well in a networked world. Multiple competing applications may coexist in a category, leading to diminished overall adoption of the category. Moreover, those applications that come to dominate a category will not necessarily be the best or the best-maintained; rather, they will likely be the first to attract a large number of users in a particular category.

Gal is implying that many awesome third party applications may attract a tremendous amount of users, at least initially. The problem lies in the fact that there may not only exist one or two attractive applications of a similar category, but tens, hundreds, or even thousands. With so much variety, the reliability of the ‘darwinian selection’ process may fall victim to the numbers. With so many millions of social network users selecting one or any combination of many different applications within one category, the category (for example, music applications) will get viciously drawn out and chopped up, with no clear cut application ever rising to the top and taking the cake. Where does this leave the future of the internet?

A couple conclusions, or predictions, can now be drawn or formulated in relation to the developer application war, brought on in recent times by the social networks.

First, and foremost, the future of the internet, in terms of available rich programs and content, will be dictated by third party user-generated customizable applications, not necessarily by already established software giants (like a Microsoft). These larger established companies, including the social network companies, will most likely merely provide the means for these developers to work with. Developers will follow this model until a single company wins the platform war outright, where at that point, all developers will migrate to this popular platform. History will repeat itself, in relation to the early days of Microsoft and its first operating system. The key will be, once again, to attract these rich internet application developers scattered around the world.

Second, increased competition resulting from an almost non-existent barrier to entry may dilute the entire space, influencing the destruction or impairment of an application’s ability to blow up and dominate in its specific category. An application’s ability to attract many users initially wouldn’t mean that it would be guaranteed future success and predictability. This may already be apparent in current social networking platforms.

Third, the winner of the platform war will undoubtedly characterize and define the internet in the coming years. As I have alluded to in my other posts, I believe this platform will be an entirely web based system that is not reliant on local desktops. The platform will be free of charge to consumers (goodbye to the $100 OS), and offer every type of program imaginable, anything from simple notepad applications to advanced money management tools. Questions to be answered - how do you monetize the system, and how will developers get paid, especially if the platform is free? Most likely, either developers will charge small fees for their applications (no more $150 software, competition will be too fierce) or the mother company (winner of the platform war), will channel some of its advertising revenue to these developers for compensation.

Finally, the winner of the platform war will be an innovative company that can strategically forward its current user base onto its new platform. Social networks may be the perfect candidates for this because of their gigantic and reoccurring user bases. Is this to say that a Facebook (pictured above) will become the next generation Microsoft? It’s possible. Transferring and attracting users may be the largest hurdle that a platform candidate must overcome in order to defeat its competition.

The stakes are big and the space is wide open for the taking - the race has started and competition will only become more intense. The company that develops, not necessarily the best platform, but the platform that attracts the most amount of developers and achieves critical mass will be worth billions almost overnight.