How ecosystems became the new walled gardens | PandoDaily

Back in the 1990s, when nearly every newspaper story about the World Wide Web seemed to include some mention of the Wild West, offering Internet newbies a safe environment was a sound business model. In 1999, America Online made $4.8 billion in revenue by offering a reliable Internet connection and a walled garden of content. But soon enough the Web outside AOL?s walls became more secure (and much more compelling), and people found its walled garden to be less of a fortress and more of a prison.

In 2012, the walled garden is back as a business model used by nearly every giant involved in the Web today: Apple, Google, Amazon, Twitter, Facebook. The new walled garden takes different forms ? some through their mobile OS, some through a ubiquitous service ? but each walled garden is designed to create an alluring experience for consumers. They all rely on an ecosystem of developers, content publishers, and others that took them years to cultivate. They are the primary connection points for consumer to today?s Web, the way portals and online services like AOL were a dozen years ago.

These days, though, companies don?t talk about walled gardens. They talk about ecosystems ? a vague piece of business jargon that means a broader alliance of companies and creative individuals serving the business model of a tech leader. It?s getting harder for smaller companies to make money on the Web without going through one of these ecosystems. And consumers are finding themselves corralled inside them too, increasingly in ways that feel confining. Because the more pressure these Web giants face to keep profits growing, and the more the competition among them increases, the less they want consumer straying away from them.

Most famously, Apple has ?curated? its App Store into a walled garden, rejecting apps for reasons some found to be frivolous but that Apple insisted preserved the user experience it wanted to create. But increasingly, the walls that give iOS its rigid structure aren?t just shielding consumers from glitchy or troublesome apps, they are corralling consumers into spending more money with Apple instead of one of its competitors.

Earlier this year, Seth Godin was told by Apple one of his ebooks was rejected because it carried too many links to Amazon?s site (Amazon is a partner of Godin?s). Anyone using iOS 6 is familiar with a more infamous example, where the Google Maps app that became a part of daily life was replaced with the far buggier Apple Maps. Buying a new iPhone, I found it very simple to transfer my songs and other data from my old phone to my new one with iCloud. But a potentially costly one, since I had far more than 5 gigabytes of data to transfer. Using iCloud would require me to spend $20 for every extra 10 gigabytes I wanted to move. Instead, I resorted to an intermediary program: iTunes, a cumbersome software interface that has barely evolved from what Apple designed for the original iPod.

Apple built a platform intended to offer a consumer experience that fits Apple?s vision of the mobile web. But the further Apple pushes toward that vision, the more complex the execution becomes ? until there are not just snafus like Siri and Maps, but there are people who are loyal Apple customers complaining about Apple. A platform, after all, is a system. And as systems grow more complex they become more rigid. Every brick Apple lays down to strengthen its platform, at some point, ends up building bigger walls that leave its customers feeling more and more confined.

And it?s not just Apple moving in this direction. Facebook is another example often cited as one of the Web?s new masons. The site attracted hundreds of millions of users precisely because it offered a chance to share content with selected friends. But as Facebook evolved, it began to control how users accessed the rest of the web. You are free to roam beyond the perimeters of Facebook.com but you are strongly urged to share with its advertisers where you are going, what you are doing, what songs you?re listening to, and what you are buying.

Twitter serves a smaller community of members, but it?s followed a similar path. In an effort to increase revenue and build relationships with big advertisers, Twitter introduced stricter API guidelines, angering developers of many Twitter-based apps as well as the many people who came to use them. Twitter is younger and smaller than other companies pursuing walled-garden business models, and may have more to lose if users and developers object.

Google has evolved from a spartan search page that was content to send people to other sites (preferably through its sponsored links) into a small empire of features and products serving Google ads. As Larry Page has redesigned the company?s offerings around the ?social spine? of Google+, he?s introduced controversial features like Search Plus Your World, which placed Google+ pages high up in search results.

Amazon, meanwhile has been building its readymade ecosystem of ebooks and video around its Kindle Fire tablet, a device designed to deliver Amazon?s own content to users. But the Kindle Fire, like the Kindle, is aimed at longtime Amazon customers, who are loyal enough to pay for its Prime subscription service. Amazon may have the strongest walled garden since AOL itself, yet because it?s marketed primarily at Amazon?s customers, it?s likely to see the least resistance.

Most of these companies didn?t start off as rivals, but as they grew they expanded into each other?s markets. Amazon is taking on Apple with tablets, while Apple is competing with Google with iAd, while Google is pushing back against Facebook with Google+. And so on. The bigger they get, the more they compete. The more they compete, the more incentive they have to keep customers inside their respective walled gardens.

Of course, all of these companies will describe themselves as open. When in fact that word means so many different things now, it hardly means anything anymore. Everyone loathes closed environments. In his memo railing against Flash, Steve Jobs promoted Apple?s commitment to open standards. Google recently bragged about how ?screen independence is at the core of our strategy.? Facebook allows its users to roam the Web using its ?Open Graph?. But all of these bids for openness are just a part of a bigger plan to keep consumers corralled inside their respective gardens.

For now, most consumers aren?t complaining too loudly about these walled gardens as they jump from one to another. But as dealing with these companies becomes more troublesome, there will be more resistance. In time, that will leave the door open for someone, or many people, to offer a compelling alternative without any walls at all. That, after all, led to the downfall of AOL so many years ago.

Photo via sportsilliterate on Flickr.

Source: http://pandodaily.com/2012/11/03/how-ecosystems-became-the-new-walled-gardens/

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