“I have always had to defend my love of the vertical markets, especially to the hortizontal dominated business world. However, in The Register’s send-off for the departed Sun Microsystem’s CEO Scott McNealy, the commentator made an economic comment that hit me so square between the eyes it summed up the entire reason for the need of there to be an Apple, Google, and other one-integrator strategies that have recently come back in to vogue,” Software Architect Brandon Werner blogs.
Wall Street had long waged war against McNealy’s insistence on Sun as a vertically integrated systems company: one that produces a finished widget. Financial markets prefer to see horizontal vendors, exemplified by Wintel and Dell, because they squeeze the costs out of a business. In reality, the costs are simply transferred elsewhere, usually to the customer in the form of integration woes, shorter buying cycles, and lower reliability.
Werner writes, “Think of that when you buy a $500.00 Gateway from Best Buy. It is true that the majority of people who read this blog are the technological heavy-weights, and might not believe they feel all the integration cost and reliability issues that come from the Windows (Is it really Wintel anymore?) ecosystem. However, I don’t go a day without someone complaining about some lost productivity do to their Windows XP workstation, and these are some of the smartest people to be had in a workforce. Coming home to (and using at work when possible) Apple technology has always created longing looks when I show the one step .Mac sync or the bluetooth pairing for my HID devices, or even my ability to direct music to any stereo in my house with one touch.”
“Participating in Vertical Markets does tend to be more expensive up front, but the cost isn’t non-existent in the Horizontal model, it’s just more hidden,” Werner writes. “Sadly, before most markets move to the costlier but more quality driven Vertical process, there is always the Horizontal market before prices come down enough so that a person can switch brands, not just components. Steve Jobs and Scott McNealy are both people who never gave in to the Horizontal marketplace, never willing to give in to the quality penalty such a move would give their companies and their reputation. They have had to live deep in to their middle-life to see it come back, but in the world of PSP, iPod and Google where entire industries have had sprung up around these Vertical ecosystems, they can finally say they never gave up on the idea of quality and integration championing the dull and the mass produced.”
Full article here.
MacDailyNews Take: Bulls-eye! Apple’s control of the whole widget (hardware+operating system] guarantees as seamless an experience as possible for Mac users. Those using Windows have no such guarantee. Over time, no matter how little you value your time, the Apple Mac is less expensive than Windows, even if it did cost a little more upfront. The more you value your time, the quicker the Mac saves you money versus Windows. Total Cost of Ownership (TCO) is perhaps the most overlooked idea by the vast majority of PC buyers. It’s as close to all-important an idea as you can get when it comes to purchasing decisions, yet it somehow goes completely ignored by most people! The exact same idea holds true for iPod+iTunes vs. also-ran digital music player trying to interact with somebody else’s struggling online music outfit. Control of the whole widget always was, and still is, one of Apple’s main advantages.
Pfeiffer Consulting: Mac vs Windows: Total Cost of Ownership, Productivity and Return on Investment – March 30, 2006
Windows to Mac switchers: recommendations and Total Cost of Ownership analysis – September 29, 2005