The next ERP is a private App Store

The BYOD initiatives in corporations have been treating mobile devices (smart phones and tablets) as small PCs (typically small Windows PCs). They must be managed because corporate data is confidential and must remain within the corporation. A valid reason, but the wrong conclusion.

Instead of thinking of smart phones and tablets as small PCs, we should think of them as smart phones and tablets. That is, we should think of them as devices that run apps, and corporations should provide apps to access data and perform business functions. The apps should authenticate the user, retrieve and store data (only on servers, not on the device), and govern the use and access to data.

In such a system, a corporation needs a way to build and distribute its custom apps. Common functions like e-mail and calendars can be handled with generic apps. Functions that are specific to the business must be developed by the business and somehow distributed to users.

One could put them on the public stores (Apple's iTunes, Google's Play, and Microsoft's App sStore) or one could put them on a private store. The latter may have more appeal to large organizations.

Using a store (public or private) and the existing update infrastructure simplifies the task of software distribution. New employees can go to the store and download what they need. Updates are pushed to current users.

(Using authentication -- and not apps -- to control access to data lets anyone have any app. You do not have to limit apps to employees, or even subgroups such as executives. Think of it like Microsoft Excel -- anyone can buy MS Excel but only those people who can read the corporate spreadsheets can see their contents.)

Building a private store has some advantages. It is a single point for all apps, including apps across platforms. The Apple, Google, and Microsoft stores are limited to their platfoms. A private corporate app store is a "one stop" source. Also, one is not beholden to the whims of the store managers -- all have removed apps for unknown reasons, at one time or another.

Building an app store is not a company's main purpose. (Unless the company is selling apps to all comers.) Look for the big consultancies to offer app store services and frameworks. IBM, HP, Dell, and even folks like Accenture and Booze-Allen-Hamilton may offer them. I also suspect that there will be an open-source app store framework.

I expect that app stores will be limited to large enterprises. Small Mom-and-Pop shops don't need an app store to control and measure app usage. The Fortune 500 will use them, and the next tier may, but below that the public stores may be sufficient. The market for app store frameworks and implementations may be narrow, like the ERP market.

Come to think of it, the ERP vendors may be the first of offer app store frameworks and support.

Centralizing or decentralizing? What's happening now?

One might be confused with the direction of today's PC technologies. Are they becoming more distributed or are they becoming more centralized?

There are two large-scale changes in today's technologies. Depending on which you look at, you will see the trend for distributed control or the trend for centralized control. (Kind of like those optical illusions of stairs that go up, or down, depending on your visual perception.)

The distribution of PC applications are becoming centralized: Apple's business model is centralized. Applications for iPhones, iPods, and iPads are distributed through iTunes and through iTunes only. This is very different from the approach used by Microsoft for PC-DOS and Windows applications, in which anyone could write and distribute an application, and anyone could purchase and install an application (provided they had administrator privileges) without any involvement or supervision from Microsoft. Apple has complete control over iTunes and one can distribute an iPad/iPhone/iPod app only with Apple's permission.

Apple has declared intentions to move the Mac world from the "open distributor" model to an "Apple centric" model with the "App Store". Indeed, applications that use iCloud must be distributed within the App Store. Applications distributed via the "open distributor" model cannot use iCloud services.

Microsoft is considering to closed distribution model with Windows 8 and the Metro environment.

The selection and ownership of PCs are becoming decentralized: The "bring your own device" fad (for now, let us call it a fad) shifts the ownership of PCs from employers to employees. The previous model saw employers specifying, providing, and provisioning PCs for workers. Often a company would have a standard configuration of hardware and software, issued to all employees. A standard configuration reduced support costs, since there was one (or a limited number) of hardware and software combinations.

With the "bring your own device" fad, employees pick the device, employees own the device, and employees provision and maintain the device. One person may pick a Windows laptop PC, another may pick a MacBook, and a third may pick a Linux tablet. This is clearly a decentralization of decisions -- although the employer retains decisions for the development of company-specific applications. An employer may develop custom software for their employees and build it for one or a limited number of platforms. (Such as custom software for insurance adjusters that runs only on iPads. You can be sure that insurance adjusters at that company will select iPads.)

The two shifts are symptoms of larger changes: Software is becoming a commodity, with the important packages running on multiple platforms (or equivalents running on different platforms). Second, power is shifting from PC customers (large user corporations) to PC platform manufacturers (Apple, Google, Microsoft).

Software is a commodity, and the different packages offer no compelling advantages. For word processors, Microsoft Office is just as good as Libre Office. And Libre Office is just as good as Microsoft Office. In the past, Microsoft Office did offer compelling advantages: it ran on Windows, it ran efficiently and reliably, and it used proprietary formats that demanded that new uses have the same software. Those advantages have disappeared, for various reasons.

Software is a commodity, and current products are "good enough". There is little to be gained by adding new features to a word processor, to a spreadsheet, to an e-mail/calendar application. I may sound a little like the "we don't need a patent office because we have invented everything" argument, but bear with me.

The core packages used to run offices (word processors, spreadsheets, e-mail, calendars, presentation, etc.) are good enough, the data is interchangeable (or convertable), and the user interfaces are easy enough to understand.

If we need additional functionality in an office, a company will get it (either by building it or buying it). But they will do so with extra software, not through extensions to the core packages. (The one possible exception might be spreadsheet macros.) The core office software are commodities.

Apple knows this. It spends no effort building its own version of office tools. I suspect that Microsoft understands this too, and is preparing for the day when lots of customers move away from Microsoft Office.

Apple and Microsoft are building new mechanisms to extract value from their customers: walled gardens in which they are the gatekeepers. The application software will be less important and the walls around the garden will be more important. Apple uses its iTunes as a tollbooth, extracting a percentage of every sale. I expect Microsoft to do the same.

What this means for "the rest of us" (individuals, user companies, developers, etc.) remains to be seen.