The landscape of building products and companies in the tech industry is undergoing a significant transformation, moving away from the era of vertically-integrated, walled gardens. The pendulum is already on it’s downward trajectory and the future of tech looks brighter than it has in years.
The End of Vertically Integrated Tech Giants
Over the last 20 years, the tech industry has been dominated by vertically-integrated companies. These companies controlled everything from hardware to software to user data, due to the complexities and costs associated with running large-scale data centers and infrastructure. This control allowed them to create powerful monopolies that continue to dominate the industry. However, advancements in technology and changing market dynamics are leading to the erosion of this model. Companies can no longer solely rely on their integrated structures to maintain market dominance. Users are increasingly seeking alternatives that offer more control, more privacy, and more freedom of choice.
The SaaS Model: Losing its Edge
Another aspect of the tech landscape that is starting to show it’s age is the sofware as a service model. The appeal of the SaaS model, once a groundbreaking approach, lay in the simplicity and scalability it offered, both for providers and users. Why own, run, and maintain software when you can rent it by the month? But, increasingly high subscription costs, lack of data ownership, and a one-size-fits-all approach have led to accute customer dissatisfaction. Furthermore, parabolicly rising customer acquisition costs and challenges in user retention amid intense competition are making it difficult for SaaS companies to sustain profitability and growth.
The Return of Self-Sovereign Solutions
Companies like 37signals, Start9, and Umbrel are examples at the forefront of a movement back towards a more user-centric, decentralized internet.
Once: This initiative by 37signals, one of the originators of the SaaS movement and makers of Basecamp and Hey is a direct response to the limitations of the SaaS model. Once aims to offer a line of software products that users can own permanently after a one-time purchase. This model revives the notion of software ownership, privacy, and security, allowing users to host and control their own IT infrastructure. It signifies a paradigm shift from renting to owning software, granting users more autonomy and control.
Start9: Start9 is democratizing access to private servers, making it feasible for average users to establish their own server infrastructure. This approach is a significant departure from the cloud computing model, which often compromises privacy and involves high costs. Start9’s StartOS enables users to easily install and use a variety of open-source software, empowering them with greater control over their digital footprint and reducing their dependence on large tech companies.
Umbrel: Umbrel provides an operating system for personal home servers, enabling users to manage their data, run private networks, and even engage in cryptocurrency operations from the comfort of their homes. This model places a strong emphasis on privacy and data control, challenging the traditional cloud-based models. Umbrel’s offerings, including ad-blocking across the network and automation of home devices, represent a shift towards more autonomous and self-reliant computing.
Rearchitecting the Internet
This shift goes well beyond innovative companies reimagining the experience of buying and using tech products. The emergence of decentralized publishing protocols, such as Nostr, exemplify the shift towards a more open, user-controlled internet.
Nostr, which stands for “Notes and Other Stuff Transmitted by Relays.” is an open protocol designed to enable censorship-resistant and global value-for-value publishing on the web. Unlike traditional web protocols, Nostr is not a specific app or service, but rather a standard that allows for the creation of various applications and services, all of which interoperate using the same data.
One of Nostr’s key strengths is its resilience, stemming from its independence from a limited number of trusted servers for data movement and storage. The protocol is designed to be robust against the disappearance of relays, allowing users to connect and publish to numerous relays that can be changed as needed.
Another espeically important feature in the age of AI is that accounts and messages on Nostr use public-key cryptography. This allows anyone to verify a message’s origin and that the message’s contents haven’t been tampered with.
The rise of protocols like Nostr represents a movement away from centralized control of publishing and data storage towards a more distributed, user-controlled approach. This decentralization not only enhances privacy and security but also promotes freedom of expression and information sharing, aligning with the early ideals of an open and free internet.
The Return to an Open, Decentralized Internet
This shift is not just a technological change but also a cultural one, where users demand more transparency, control, and ownership over their digital lives. The rise of these new protocols, products, and companies is a clear indicator of this transformation signaling a return to the early principles of the internet – openness, decentralization, and freedom.