Cloud Collision – The Angle on Why Dr. Eric Schmidt Is History from Apple’s Board of Directors

image What happens when a warm front and cold front collide? Usually, extremely violent weather, which could include, torrential rain, lightning and thunder, hail, and tornadoes.

Steve Jobs is back at the helm. In addition to getting down and dirty on the product stuff we are now seeing him take care of some looming issues around people. He isn’t wasting any time in taking care of those matters.

What we are seeing is a clash between the “open” warm front (Google) coming from the north to Cupertino running into the “closed” cold front (Apple). Ok people here it comes.

Apple® today announced that Dr. Eric Schmidt, chief executive officer of Google, is resigning from Apple’s Board of Directors, a position he has held since August 2006.

“Eric has been an excellent Board member for Apple, investing his valuable time, talent, passion and wisdom to help make Apple successful,” said Steve Jobs, Apple’s CEO. “Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric’s effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest. Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple’s Board.”

This is about future strategy of Apple and Google. Board conflict is just the general issue that seems to get everyone’s attention. It’s not about that. It’s about the “Cloud Collision”.

Board conflict is something that I talked about before in pointing out that Silicon Valley has some interesting matchups. Google CEO on Apple’s board and Intel’s CEO is on Google’s board. Some in the valley have been talking about the possible conflict with between Intel’s CEO sitting on Google’s board. It doesn’t seem to be an issue but more of a PR move by Intel.

It’s About Strategy:

Here it’s very simple Apple and Google clash on not so much today but strategy going forward – the next 5 years. It’s clear the smartphone issue is obvious but what isn’t is the future of who powers the smartphone apps?

image

Why Schmidt’s Abrupt Resignation – Cloud Collision

It’s not just the smartphone and the recent Google Voice FCC lobbied investigation (as many top bloggers have pointed out). Instead the battlefield is the “cloud play”.

Apple has built the biggest commercial “private” cloud in iTunes. Billions of songs sold and soon to be zillion of apps provisioned (and sold). Google on the other hand is a completely open technology backend with Android leading the way that is getting big time uptake on the developer front. While Apple owns the market on commercial applications and developers, Google is clearly drawing lines to compete in that market.

Businessweek’s Silicon Valley editor chief Rob Hof writes:

Despite the recent battle over Google’s iPhone apps, Schmidt’s comments do point out that Apple and Google continue to have common interests as well. But as computing increasingly moves to the cloud, services once offered on discrete platforms will compete more directly for people’s time and attention. Schmidt’s departure from Apple’s board is another warning sign of more conflict among tech giants to come.

Bottom line here: Apple and Google are direct competitors but the core issue is about the Cloud – it’s a cloud collision.

John Furrier

John Furrier is founder, co-CEO, and Editor-in-Chief of SiliconANGLE, a new media company covering the intersection of computer science and social science. Furrier is also the co-founder and CEO of CrowdChat a social media platform for large-scale group conversations over hashtags. In addition to SiliconANGLE John runs Broadband Developments a private incubator and investment firm for creating new startups. Furrier lives in Palo Alto, California with his wife and four children.

2 Comments

  1. “It’s clear the smartphone issue is obvious but what isn’t is the future of who powers the smartphone apps?”

    The interesting thing about the cloud collision is its breadth and this is a great example. On paper a few years ago these companies couldn't have looked less competitive.

    But with a huge change coming from a cloud architecture everyone feels rightfully entitled to owning the full potential breadth of it.

  2. Facebook Friends Chime in:

    Sanjay Dua says
    This was inevitable – doomed from the start – as their strategies were on collision course even three years ago! A sure case of conflicting (business) interests.

    Anne-Marie Fowler says
    When Schmidt joined the Board, I recall, it was considered by many as a mutual spy move. From my perspective, was a thing to watch – would Apple and Google move in tandem, or each do a grab and run? Latter seems to have been the case, though I had hoped for the former. In late Aug 06 I was a consultant focused on business modeling the valleywide … Read Morewireless net (that ended up not happening.) But my model was built on two things – a new smartphone from Apple, coming June 2007 – and Google search and target, evolving to a more than viable$ model for content delivery.

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