Step back - This is the latest platform paradigm shift With the democratisation of access to personal computers, the 1970s and 1980s led Taking a step back and navigating through the business models of technology companies over the to a new wave in which technology companies shifted their business models to selling past century cheap hardware with a licensed operating system. With the fulgurant rise of Microsoft and its relentless focus on winning over developers, consumers chose the platforms To understand where the value might emerge and hence where as investors and with the greatest array of compatible applications, and the company’s Windows company builders we might fruitfully focus our efforts, it is useful to take the long view operating system began to propagate across hardware providers and unified almost over multiple eras of technology fuelled disruption. all software packages under one roof. By the year 2000, Microsoft’s market share was above 90% of all personal computers sold and it accrued most of its value from the operating software and application software layers. Value generated on the software protocol Decentralisation Decentralised data Bitcoin, However, while Microsoft held the desktop domination, it had never secured the level, through a network-native business Era centre, open source Ethereum model protocol & open data servers in the wiring closet and data centers - these remained the domain of the Value generated in the Digital network The Web closed cloud offerings using open source on top of free Google, Facebook, most successful Unix workstation companies of the 80’s (Sun, Silicon Graphics and software & user’s data protocol (HTTP) Amazon, Paypal Era IBM). In the early 90’s Linus Torvalds sought to undermine this expensive hegemony Value generated in the Mass market Microsoft & The PC with a cheaper & more open alternative: Linux - an open source version of the Unix proprietary business computers operating Intel Era system operating system for software servers. A new wave of technology businesses was on i t Mini DEC, Microprocessor Value generated in the unleashed by combining commodity hardware and the Linux operating system with a v computer IBM Wintel monopoly leveraging as ISV o Era ecosystem Apache web servers, MySQL and PHP. By 2012, Microsoft’s share of the compute Inn Smaller & more 4 Transistor market had fallen to 20% , while by 2017, Linux based Android captured 85% of the reliable IBM computers Era 5 mobile compute market . Digital, Vacuum Value generated in the general-purpose ENIAC Tubes proprietary hardware hub computer Era This democratisation of access to cheaper software coupled with widely available Polynominal Difference Mechanical networks, pushed technology businesses to shift their business models towards functions Engine Computers calculator Era offering free software & networks with the intent of monetising the data they gather. 1820s 1900s 1950s 1960s 1980s 1990s 2000s 2020s The tech titans of today have co-opted open source software, and combined it with Graphic 1: Fabric Ventures, Inspirated by Carlota Perez’s “Technological Revolutions and Financial Capital” & Thomas Kuhn’s “Paradigm massive monopolised silos of user data, to create competitive moats protecting Shifts”, and refined through conversations with Hermann Hauser and readings of Placeholder’s Investment thesis trillions of dollars of market capitalisation. However, as incumbents are facing more and more data usage issues, users are starting to scrutinise the ownership of their Let’s pick the story up in the postwar American boom of the 1950s and 1960s. As data and governments are pushing through extensive data protection regulation (e.g US firms became multinationals, the business model of technology companies was GDPR). primarily to take a margin on the expensive production of proprietary computer hardware. The result was that computers remained in the hands of a limited group of Following the democratisation of the hardware, the operating system, the software users, consisting of governments, businesses and wealthy individuals. As the production and the networks, the new paradigm shift we are observing will open up access costs of microprocessors plummeted, a new architecture for computing with radically to the data within networks. As the existing data silos break down, we will observe improved economics flipped the power in the industry from the proprietary hardware the commoditisation, in the sense of packaging and access, of the data itself. The systems to the chip manufacturers and software companies. Where Tom Watson at question remains - what will the business model of technology companies become, IBM had trouble imagining the need for more than a handful of computers, Bill Gates of once the data monopolisation angle has eroded or died? Microsoft understood the future would see a personal computer in every home. 4 http://old.seattletimes.com/html/microsoftpri0/2019853243_goldman_sachs_microsoft_os_has_gone_from_more_than.html 5 https://www.idc.com/promo/smartphone-market-share/os 32 33