Hardware and Software--The Lines Are Blurring

I am a regular reader of Walt Mossberg's column over at The Wall Street Journal. His take on new technology, and new devices might seem biased at first, but his views are very close to those of the lay customer, not a technically adept one. It is this ability of his to continue having his ear to the ground that has fueled my admiration, and respect for his analysis.

This new post by him triggered memories of a conversation with a friend a few years ago. Her assertion was that Web Services would dictate who won and lost in the technology business. What neither of us could have predicted at that point was the important part that Hardware would play in the success of software services. Apple's iTunes service in isolation is pedestrian. It is the seamless integration of the service with the iTunes client and the iPod player that make it unique, and exemplary. this three-pronged attack of the iPod has decimated the rest of the competition to date. The competition is catching on though:

Microsoft has essentially set up a small Apple, called the Entertainment & Devices Division, run by savvy, strategic company veteran Robbie Bach, who was running Excel when I first met him many years ago. The division not only designs both the hardware and core software for the Xbox game consoles and Zune music players, but also operates online marketplaces and communities for both. And the company is considering other such end-to-end products, which would include Microsoft-designed hardware.

Sony, meanwhile, also taking lessons from both Apple and its own PlayStation game console business, has set up a software development group in California, run by a former Apple executive. Its mission is to develop distinctive Sony software that can run on most of the company’s products. And Sony is also trying to compete online, to match Microsoft’s great success with Xbox Live and Apple’s iTunes.

The question that comes to mind is a year from today, which service provider will be consider the trend setter, which one would be the laggard, and which one would be the upstart...