Ten years ago, if you were a tech company, you could be neatly placed into one of two categories - software or hardware. Tangible or intangible. Google? Software. Samsung? Hardware. Apple? A bit of both – but with clear divisions between the physical devices and the operating system within.
Today, the gap between hardware and software is disappearing. The minds at Google, Amazon, Facebook, and others are increasingly dipping their brushes into the world of manufacturing. At the same time, the rise of the IoT and emergence of the smart home is driving companies like Philips Lighting and Hoover into the world of app development. While some of the early crossovers, such as Google Glass, were less than successful, in the last two years a wave of app-integrated objects like Amazon’s Alexa have become – quite literally – household names.
This is what these innovations have in common: through a merger of hardware and software, each seamlessly integrates the user’s ‘real’ and ‘virtual’ lives. While five years ago you would have to look up from your phone to turn on the lights, scrolling can remain unimpeded by controlling all your lighting systems through any number of home management apps.
This integration works in both directions; software companies like Snap are creating Spectacles to turn virtual experiences into real ones, while start-up Tile solves the real-world challenge of finding one’s keys with a handy app. Through this consolidation of the two worlds, ‘digital’ brands are becoming more, driving deeper engagement that doesn’t just disappear when the user puts down their phone.
The value of this integration is clear from the market for virtual assistants. Though in 2011 Apple launched Siri, the first modern digital virtual assistant, until 2017 it was trapped inside the iPhone, offering a virtual-only experience. Amazon’s Alexa, meanwhile, has emerged as the market leader in part because it bridged the gap between hardware and software. The physicality of the smart speaker allows the user to remove yet more friction from the user journey by interacting with the virtual world without disengaging from the ‘real’ world of their living room.
Because the ‘hardware-software divide’ is really the divide between the real and the virtual, the jump to ‘hardware’ need not be literal. Facebook recently launched pop-up shops in select Macy’s stores across the US, featuring 100 popular ‘digital-native’ brands that advertise on the platform. The display, which features 3D versions of Facebook’s photo boxes, has clearly been designed to encourage shoppers to photograph and post images on the platform – a move that deepens connections between reality and the digital world.
However, it’s important to note that bridging this gap isn’t always an unmitigated success. The examples of Snap Spectacles 1.0 proves that consumer loyalty to software doesn’t directly translate to hardware sales. The hardware needs to be aspirational in and of itself, and the unfashionable design and colour options were a major reason Spectacles 1.0 was considered a failure. Aspirational qualities also need to be balanced with both accessibility and purpose. This is a major reason why Google Glass failed to catch on; only a very small audience could afford the $1,500 price tag, and it was never clear which specific problems the product was meant to solve.
As “IoT” becomes more than just a buzzword and “virtual reality” looks less and less like an oxymoron each year, the collapse of the hardware-software divide shows no signs of slowing. Innovators will continue to seize opportunities in this space, but the ideas we’ll still talk about in 20 years will move beyond tech for tech’s sake and generate real solutions for consumer problems. Only these innovations, which use integrated technology solutions to address genuine needs and wants, will open new frontiers and achieve long-term success – online, offline, and in the spaces between.