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Ecosystem Shakeups: Q&A with Urban Airship CEO Scott Kveton… Or… Amazon, Apple & Android: Oh My!

Ecosystem Shakeups: Q&A with Urban Airship CEO Scott Kveton… Or… Amazon, Apple & Android: Oh My! Brad Berens
Matthew Ingram’s GigaOm article last week, “Amazon shows media companies the future of the web,” provocatively argued that the e-commerce giant’s Kindle Cloud Reader was more than just a way around the 30% cut that Apple charges for books purchased via the Kindle app on the iPad or iPhone.

What the e-book retailer has also done is provide a great example of how media companies should be looking beyond the world of apps to the future of the web: one in which websites behave like apps, thanks to the magic of HTML5, and publishers can get the benefits of both without having to sell their souls to one app-store provider after another.


Passionately pro-HTML5, Ingram’s article suggests that after the last few years of of app frenzy we might well be seeing the decline of apps.



Seeking additional insight into the future of native handset and appliance apps vs. HTML5 web apps, I reached out to Scott Kveton, founder and CEO of Urban Airship, which is “a mobile services provider powering in-app communications and purchases for tens of thousands of mobile apps” and serves companies like ESPN, Tapulous, Groupon, dictionary.com, misnbc.com and Newsweek.

Scott Kveton



Prior to Urban Airship, Scott worked at companies including Amazon.com, Rulespace, JanRain and Vidoop, and he gets the mobile app ecosystem at a deep and helpful level.



Then, in the middle of our interview we heard this morning’s surprising news about Google buying Motorola Mobility, and so we widened the scope of our chat towards the end.



Brad Berens: you've built your business on powering in-app notifications and e-commerce. Every time Steve Jobs sneezes there's a press release, but how big a deal is this Amazon vs. Apple conflict REALLY? Walk me through the ecosystem as you see it.



Scott Kveton: I think that the Amazon vs. Apple conflict is a hint at things to come. For the last couple of years, publishers, retailers and anyone with a customer relationship have bristled at the idea of having to pay a "platform tax" (the 30% Apple, Android and others take). It was inevitable that Amazon and others would look for ways around this and natural that they would turn to the web to make it so.



Amazon has to play nice with Apple right now. Amazon's customers are on iPads and other mobile devices. If the rumors are true, we'll see an Amazon Kindle tablet based on the Android operating system sometime soon. If that is the case, then Amazon can start building their own eco-system where they completely own the value chain. That could be huge. The Amazon Kindle tablet would be like a massively distributed point-of-sale device.



Not only can I already do a lot of what I do on iTunes on Amazon's website (buy music, books, movies, TV shows), but with a Kindle tablet I'd also be able to use it to buy things I need at home. That poises Amazon to take an even bigger piece of the retail market. Why have a shopping list on your tablet when you could just place the order right there? Throw some benefits to Amazon Prime users and now you have real motivation for those customers to sign up and lock in.



The reality is we're still in the early stages of this market. Content is all about delivery today, but that's just the start. Diving deeper into that content, discovering content from your friends or what is recommended to you by the cloud is all coming soon. Access to the platforms that provide us what we want, when we want it will be the key drivers and differentiators for these successful platforms.



The triple-A threat (Android, Amazon and Apple) is looking to be in the right place to build a whole new eco-system and be the gatekeepers for content to consumers everywhere.



Berens: What advantages do native apps have over HTML5 apps?



Kveton: What we keep seeing in the conversations are descriptions of HTML5 as bringing an "app-like experience," with the "experience" being the key difference.



Native apps are designed specifically for the devices where they live and as such take advantage of the unique properties of mobile devices. Things like cameras, sensors, geo-location, NFC, accelerometers. The next wave of native apps is going to integrate these features into the functions of their apps in order to provide much richer contextualized and personal experiences.



And we're not talking about which ads get served here. We're talking sophisticated, predictive communications between apps and individuals -- past behavior, preferences, where that user is going and at what speed -- to predict what the user wants at that very minute. Users will love this: they're going to be disappointed with HTML5 apps that fail to provide that individual attention.



I can see a whole industry of middleware provider who will help HtML5 developers hook into these functionalities. They can save themselves a lot of effort by focusing their development on native apps and continuing to innovate around mobile specifically.



Berens: I’m intrigued by what you just said: "I can see a whole industry of middleware provider who will help HtML5 developers hook into these functionalities. They can save themselves a lot of effort by focusing their development on native apps and continuing to innovate around mobile specifically."  I'm not sure I quite understand it: are you saying that the ostensible middleware providers would take care of connecting an HTML5 web app to the more intimate affordances of the handset? Or that the middleware providers are an unnecessary evil?



Kveton: Yes, the middleware providers will help both connect to the more intimate affordances of the handset (camera, sensors, accelerometers, et cetera), but also provide a layer of compatibility that hooks into existing workflows. I will want to be able to send notifications, deliver content and understand usage more than ever before and that will only get more complicated as each of these platforms has its own tools and eco-systems. Today's Google/Motorola Mobility announcement puts an exclamation point on that.



We're going to see companies go with tighter integrations of device and OS, which means they will be able to expose more to developers/publishers. Again, middleware providers will be there to make sure those publishers can address the wide-range of sophisticated devices without the hassle of having to learn all of the gory details.



Berens: What is the biggest challenge facing HTML5 developers?



Kveton: The same challenge that all mobile developers face: how to get noticed, downloaded and -- most importantly -- how to get the apps used frequently.



Native app developers have a leg up here because they can use push notifications to create ongoing conversations with their users. Push is one of the most important features an app can have, and it's not available to HTML5 apps. So they are going to be hamstrung once the apps get installed on the device. Our developer community has already solved this problem with native apps for iOS, Android and RIM platforms, and we're seeing a ton of them succeed in attaining ongoing, frequent app engagement. The importance of push cannot be underestimated.



Berens: Let's flip this around. Given Urban Airship’s revenue model you are, obviously, a proponent of native apps, but aside from the "get around the 30% vig" issue, what other benefits are there from choosing HTML5 over a native app?



Kveton: One of benefits of HTML5 apps is that you can immediately get your website mobile-enabled. So many companies jump right in with an app and forget about their own website. Websites need to be optimized for mobile viewing-- the phone number has to be linkable to make a call. So HTML5 can solve a lot of things right out of the gate: you can mobilize a website and get your brand on a device with an app at one time. HTML5 also helps with cross-platform compatibility. Apple, Android and other platforms already support HTML5.



Eventually, it will be write once, be everywhere much like it is on the web today. We'll never be 100% HTML5 apps (just like we aren't 100% web apps on the desktop today) but we'll see the value of HTML5 grow over time.



Berens: Last week in Advertising Age, Jay Habegger had an interesting column about a different Amazon initiative, which is to use their data to power targeting of online display media on third party sites.



To me, this seems like a natural extension of your thoughts about Amazon owning the entire value chain— do you agree?  And what about other potential players in this sort of competition?  Wouldn't Google compete with this Amazon tablet? And what about other app-rich mobile operating systems like Microsoft or Nokia Ovi?



Kveton: These fully-integrated stacks are really interesting. Again, Google/Motorola comes into play. Now Google is going to be able to ship a complete phone (hardware & OS). I firmly believe this is going to force Microsoft's hand in this space as well. You can see that Nokia's stock is up this morning on the news. Owning the entire value chain is really compelling (see Apple) but its really, really hard to pull off.



If I'm Google I would be VERY nervous about someone like Amazon coming into the advertising space. Amazon's impending Android tablet is another piece of the puzzle for them to own even more of the value chain and coupling that with their data for an advertising play is really compelling.

A trusted advisor to companies of all sizes and a respected voice within the interactive media industry, Dr. Brad Berens has enjoyed a wide-ranging career that features storytelling as an organizing theme. These days, he divides his time among...

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