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The struggle to win the Mobile race: Open vs. Closed systems

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The recent launch of Google’s Accelerated Mobile Pages, or AMP, raised the decades long question again – Which is better: Open or closed system/platform?

The recent launch of Google’s Accelerated Mobile Pages, or AMP, raised the decades long question again – Which is better: Open or closed system/platform?

Google AMP vs. Facebook Instant Articles

AMP, which many view as Google’s answer to Facebook’s closed Instant Articles product, is an open source initiative that details technical processes for publishers that would allow their mobile pages to load almost instantaneously inside Google Search on mobile phones, placing them at the top of results. It launched with several big name partners in technology (Twitter, Pinterest, LinkedIn) and publishing (The New York Times, Wall Street Journal, The Financial Times, Vox Media).

The launch of AMP raises the question that is it just Google catching up to Instant Articles to please the news industry or is it the start of something much bigger: the fight to rule the mobile Web. I believe it’s the latter. I say so because for Facebook, mobile publishing is tangential to the core business. However, for Google, it’s critical. AMP is a central part of Google’s mission to clean up the mobile Web and boost search revenue on mobile where it had started facing small, but worrisome, threats from mobile ad-blocking and competitor apps like facebook, amazon and twitter with users moving away from Google Search or the Web and into these apps for a better mobile experience.

Open vs. Closed War: History

But, a more important question AMP raises is the decades old debate on open vs. closed systems. Since the beginning of the personal computing era, there has been a struggle for dominance between open and closed systems. The early open CP/M computers gave way to the relatively closed Apple. The closed Mac was beaten by the open Microsoft/Intel PC. But now, the Mac is gaining ground on Windows with both competing fearlessly in the traditional computers industry. On the mobile front, closed models seemed to dominate with the closed BlackBerry and iPhone leading the race. But, today, things are a muddle and it is far from clear which model will dominate the next phase as the open Android is becoming a clear global leader as a smartphone platform, but only in terms of number of users and not sales.

Coming back to our debate on mobile publishing, Google launched Google News as a specialized search page for news articles, but with the rise of mobile reading, Facebook (and now Apple News) attracted many more users with its Instant Articles and the strong network effects of its closed platform. And now, with AMP, Google is positioning itself to dominate mobile through improving the Web and providing users with an app-like fast experience without the need to download another app. However, we are still far from declaring a winner in the mobile race. Or, a better question to ask would be whether this is a winner takes all market. If desktop is used as a comparable, it seems like there is place for both, open (windows) and closed (macintosh) systems, and they continue to co-exist.

What does this mean for a tech entrepreneur?

But, what does this unclear picture between open and closed systems mean for online startups? As a tech entrepreneur aiming to be the next big platform, should I design my system to be open to leverage the developer community, get expansive eyeballs, or should I close it to keep users in the platform, hoping to generate massive network effects for viral uptake?

Everyone will have their own view on this question, and like in business school cases: there is no right answer, at least for now. For what it’s worth, in my view, for some types of products, especially where platform is core to the business model, being open will help generate content and applications quickly (e.g., Jibo – the new home robot positioned as a much better Alexa) which in turn helps establish network effects between users and creators. But, the entrepreneur must be ready for design tradeoffs, lesser control, and sharing value with other players. On the other hand, for products where the core offering in itself has strong network effects between users (e.g., dating apps like Tinder) and where the entrepreneur needs to control the end to end user experience and can maintain engagement, closed system is a better answer. However, closed systems require significant development and investment because the startup is responsible for creating and maintaining all of the components, and hence a source of talent and money is a must for entrepreneurs establishing a closed system.

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