Innovation in Stereo: Is Hardware the New Software?

"Software-driven, hardware-enabled."

It's a mantra that's seared into my memory. I had just started out my career at NCR, and at the time, the tech icon was then over 120 years old and needed reorienting. Under the adept leadership of Bill Nuti and John Bruno, the legacy hardware company became a software leader across a variety of consumer verticals. It was a profound way to start a tech career, and that rallying cry has stuck with me to this day.

"Software-driven, hardware-enabled."

It not only helped reinvent NCR, but it was a strategy mirrored by countless providers across a number of industries. Which is why, halfway through 2018, I can't shake this idea that perhaps, in corners of the tech world today, that philosophy may be getting inverted.

Case in point: the speaker wars.

I'll confess that I love this stuff. Raised around multiple generations of musicians and music-lovers, I hold a near-reverence to the sound systems of my lifetime - a Nakamichi SoundSpace 8, a Pioneer VSX-D603S, an Audio Technica AT-LP60 turntable; I adore the beautiful marriage of art and technology.

However, since at least the formal debut of iTunes in 2001, much of the last two decades in the audio and speaker industry has been focused on the format of music, and how it's bought, played, stored, and shared (and, occasionally, the new legality of all those advancements).

And by in large, those advances have meant software. Even the current subscription-model, streaming revolution (being led by the likes of Apple Music, Spotify, and Tidal) seems the natural continuation of this software story.

However, while recently experimenting with a variety of these platforms, I found something unexpected taking precedence again: the hardware.

Suddenly, I couldn't help but think that the physical speaker - whether projecting sound (such as music, weather reports, or the news) or consuming it (such as a voice command from a user to a smart speaker) - was flipping the innovation paradigm.

And you may already be part of this shift. If you've bought an Echo, Dot, or Home Mini, you're currently front row to the hardware revolution.

Others more eloquent have characterized the value these devices can drive to the bottom lines for brands like AppleSamsungGoogle, or Amazon. What strikes me is, this seems to be an innovation paradox. Simply getting the physical device into your home is now paramount to driving retail sales, subscription plans, and consumer engagement. The software is almost secondary.

Recently testing the Apple HomePod has only solidified this contradiction. Famous for elegant hardware and software design, the release of the HomePod was met with consistent praise for the physical speaker, and disenchanted reviews of the Siri software that enables it. It's as though Apple decided to enter the smart speaker market, leading with it's best-in-class hardware, and literally worrying about the software later.

And at least in the competitive subscription music space, even if Siri continues to underperform, Apple Music will still have a huge advantage over hardware-less music providers like Spotify, Pandora, and Tidal. All of those software platforms being equal, the physical access point creates a dramatic competitive advantage for Apple Music. The hardware drives the subscription and software choice.

Which, when expanded from streaming music to the larger scope of literally all consumer goods and content, gives us good insight into why a business like Amazon or Google is willing to not only build and ship a variety of fantastic speakers, but to do so at a loss.

I've been delighted by the speaker wars we're currently living in, finding them an exciting time to reconsider how creative hardware deployments can redefine engagement models. And perhaps, in the end, this inversion will be a unique case or an argument of semantics.

But as a music and technology lover, I can't help but enjoy, even if just for a glimpse, the moment when the world flipped to being hardware-driven, software-enabled.