Microsoft & Meta – Low hanging fruit

Interoperability between these two is the easy bit.

• Interoperability between Microsoft and Meta Platforms is an important step to ensuring the success of the Metaverse, but this one was an obvious and easy move meaning that interoperability remains by far the biggest hurdle that the Metaverse has to overcome.
• Microsoft and Meta will partner so that Microsoft Teams and Horizons Workplace will work well together ensuring that workers will be able to hold meetings with each other regardless of which system they are using.
• It is very basic at the moment as it will be just the ability to hold video calls with each other as well as see and comment on content, but I suspect that the intent is to deepen this over time.
• For the Metaverse to really take off, RFM has identified a number of requirements, but the most important and the most difficult to achieve is interoperability.
• This is because the Metaverse is effectively Internet 3.0 where the first version was fixed and the second was mobile.
• This means that any user on any platform and using any device must be able to access it and interact with any other user as this is what the Internet is today and what has made it so pervasive.
• Currently, everyone is busy building their own version of the Metaverse which will lead to a series of silos sitting on top of Internet 2.0.
• This falls far short of what the Metaverse needs to be if it is to be anything more than an interesting oddity used by a few niche users.
• This partnership is greatly helped by the fact that Microsoft and Meta are completely different companies with completely different customers and users.
• This has particularly been the case since Satya Nadella took over as CEO of Microsoft and moved the company much more towards the enterprise and away from the consumer (with a few vestigial exceptions).
• Hence, Microsoft and Meta have almost nothing to lose by working together and everything to gain which makes a co-operation much easier to agree.
• I have long held the opinion that Microsoft and Meta would end up in some form of larger partnership where Microsoft brings the enterprise and Meta brings the consumer.
• If this partnership goes well, then this could lead to a much wider cooperation where they jointly offer a digital ecosystem to cover both the professional and the personal aspects of digital life.
• For everyone else, this is going to be much more difficult because ensuring interoperability will cost them money in the short term.
• For example, a Fortnite user who crosses into Google’s version of the Metaverse will want to take the costume he purchased there with him and not have to buy it again.
• This will cost a vendor of costumes in Google’s Metaverse money in the immediate term, and this is going to create a lot of resistance to enabling interoperability.
• Apple is likely to be one of the most resistant as its view will be that the Metaverse will be 100% Apple’s and that no one should really go anywhere else.
• This combined with the risk to iPhone shipments that a move of Digital Life into the Metaverse and other device categories represents could be the rock that breaks Apple’s grip on the digital ecosystem.
• The players in this space need to realise that by ensuring full interoperability with everyone else, their opportunity will be much large but that it will take a longer period of time to materialise.
• Getting stakeholders to give up short-term revenues in return for this is fiendishly difficult especially when jobs and shareholder returns are at stake.
• Without full interoperability, the Metaverse is not going to become the next iteration of the Internet and will remain an interesting offshoot that some people visit occasionally.
• Meta and Microsoft have an early head start with the Metaverse and this agreement edges them even further into the lead.