RESEARCH ALERT RA-466 MAY 28, 2008 BRUCE GUPTILL Title
Browser Wars II: What Will be the Effects on SaaS, Web 2.0 and Cloud Computing?
What is Happening?
Browsers are in the news recently, with leading vendors making announcements and headlines in a variety of ways, from new releases to uninvited downloads. Recent browser news and releases include the following:
The author invites your comments and inquiries on this Research Alert.
•
Mozilla has announced a June release of its Firefox 3.0 browser that includes significant changes to web site classifications, bookmark organization, and the abilities and use of browser-driven user and site identification (e.g. cookies).
•
Microsoft has intimated significant changes for the upcoming Internet Explorer 8, including dynamic web site and web page identification and bookmarking, content copy-and-paste, and content mapping.
•
Apple recently initiated a strong push of its Safari browser into the Windows realm, including making the browser available via iTunes and to iPhone users. Apple also recently included Safari with its automated Windows Software Update application, leading to a tripling of market share - and a flood of user complaints when Safari automatically installed itself on user machines. Safari also made headlines this year when PayPal advised its customers not to use the browser, due to Safari’s lack of some anti-fraud safeguards.
•
Opera Labs announced in early May the availability of file I/O access in widgets, which allow users to access data stored on the device the browser is running on and thus expand the combined functionality of the user device and the Web-based application.
•
And investment firms are backing newer browsers (e.g. Flock) that are architected to provide and enhance social networking and similar Web 2.0 environments and applications.
Please contact Bruce Guptill at bruce.guptill@saugatech.com.
Browse Related Research: • Emerging Trends / Technologies • Software-as-a-Service (SaaS)
Why is it Happening?
The rash of announcements and news spotlight not only the continuing and increasing differences between browsers, but the pivotal role played by browsers in the evolution and adoption of SaaS, Web 2.0, and cloud computing. As browsers become more complex in most cases, more specialized in others, and more different overall, the development, adoption and deployment of SaaS, Web 2.0, and cloud computing become affected. Browser incompatibility with user devices, services, networks, applications, and each other, becomes more likely. Browsers are free. So, why are browser providers moving aggressively to enhance and extend their offerings? And why is compatibility such an important issue? Put simply, browser vendors are looking for additional power to gain market
Entire contents © 2008 Saugatuck Technology. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden.
SAUGATUCK RESEARCH ALERT share and associated revenues. Saugatuck sees the following factors at work behind the resurgent browser aggression: 1. The browser is the client. With SaaS and Web 2.0, the browser becomes, in effect, the client software. Control of the user interface enables control of the user interaction and relationship. The browser provider thus plays a strategic role in the adoption of SaaS, Web 2.0, and Cloud Computing. 2. Advertising revenue. Browser vendors are at the center of the search engine wars, which are currently targeting web-based, search-enginedriven advertising revenues. 3. Simple forward progression of IT. All IT, especially software, gets more powerful and more complex over time. Users expect and demand more from even the simplest technologies over time. Vendor/user relationships depend upon this. Browser providers want and need to protect these relationships. 4. Virtualization of IT. More sophisticated browsers can provide server and OS transparency or independence for SaaS or web-based applications. As users and SaaS providers increasingly adopt various forms of virtualization and multiple OSes (e.g., Windows, Linux, etc.), the browser can provide compatibility for a wide range of web-based applications (i.e., SaaS). One reason browsers have to become more powerful and sophisticated is the advancement of IT virtualization. The user infrastructure is becoming its own cloud, extending to and including multiple outside clouds. 5. Device transparency. Functionally-rich browsers can enable a single version of a web-based application to support devices ranging from varying displays on PC, to PDAs, to smart phones, using different OSes and with vastly different capabilities need to be able to interact/interoperate with these multiple clouds in order for users to do business. Market Impact
Unlike many, if not most, competitive software offerings, browsers are based on very standardized technologies. Their differences lie mostly in how the browsers are architected and how the technologies are utilized within the browser. Such proprietary implementations and adaptations provide browser vendors with some competitive differentiation, and some advantages, in specific markets. Given that browsers are key to a series of huge and expanding markets – i.e., SaaS, Web 2.0 and cloud computing - we should expect browser providers to more and more aggressively develop and promote their proprietary offerings. Device vendors will play a major role in this. Software vendors, especially Microsoft, learned decades ago that users seldom remove or swap the OEM software. So browser vendors should be expected to more and more aggressively pursue exclusive relationships with user device vendors that load or bundle their browser. These devices will include not just PCs and
US OFFICES: WESTPORT, CT 1.203.454.3900
PAGE - 2 -
RA-466 May 28, 2008 COPYRIGHT 2008
SAUGATUCK RESEARCH ALERT PDAs, but smart phones, standard telephones, game/entertainment consoles, video recording devices, printers, automotive electronics – and anything else that connects to the Web. Software and SaaS vendors will also play a role in the browser “wars.” Software and SaaS providers will specify, bundle, and/or recommend the browser(s) best-suited for the use of their applications. SaaS platform providers, including development platform/platform-as-a-service (PaaS) providers, can be expected to follow suit, as can marketplaces that coordinate SaaS offerings from multiple providers of complementary or competitive services. And as web advertising revenue expands, SaaS and software vendors will expand their browser relationships to include customized toolbars and search features that enable ad revenue sharing. The development of the Android mobile device OS driven by Google could spawn yet another browser – or more. At the least, if Android is widely adopted by mobile vendors and users, it will force browser developers to further complicate their offerings. (Please see Saugatuck Research Alert RA403, “ Google’s Android Mobile OS: Potential Game-changer Beyond Cell Phones?” 7 Nov 2007.) And given Google’s position, resources, and web-centric revenue model, it makes some sense for Google to partner with, acquire, or develop their own browser. Browser developers in general can be expected to work for more slices of the web-based ad revenue pie. In fact, the expected explosion of SaaS, Web 2.0, and cloud computing can also be expected to bring more browsers to market. Saugatuck expects to see browser proliferation in devices, networks, services, and industry-specific markets etc. Browsers can be expected to come to market based on device affiliations (e.g., Blackberry), service affiliations (e.g. game services), feature sets (e.g., higher-education student needs), and other factors. Thus we come to what Saugatuck sees as the most significant problem for users and vendors: Browser glut. This will vary by market, by device, and so on. We do expect two to three “mass market” Master Brands to dominate the browser landscape, but we also expect to see a range of browsers optimized for devices, services, networks, applications, industries, and more. In such cases, software and services providers will need to develop to the lowest common denominators, including the “average” features and functions required by the majority of users. Browsers could therefore become an inhibitor to the growth of SaaS, Web 2, and cloud computing, through redundancies in versions, overlapping capabilities, conflicting implementations of standard technologies, and the resulting need for more dedicated governance by users and vendors. The browser enables a vastly increased user independence from IT. But as browsers, and the browser marketplaces, become more complex and require more resources from users (and from vendors), will we need to enable independence from the browser?
US OFFICES: WESTPORT, CT 1.203.454.3900
PAGE - 3 -
RA-466 May 28, 2008 COPYRIGHT 2008