I haven’t played with Mac OS X Lion yet, only read, John Siracusa’s lovely long review.  John suggested a while  ago that Apple had learned somethings from the iPhone/iPod/iPad, and that these things were likely to fundamentally change the way the Mac worked.  At the time my reaction was; “but of course,”  and I wondered: how aggressively can they manage to drive toward these goals.

Lion answers that question.  Fast and hard seems to be the answer.  I impressed!  And, good for them!

This will be very disconcerting for long time Mac users, a real culture shock.  They will complain, a lot.

Stewards of high tech platforms have to manage a balancing act.  If they don’t force the migration of their users into the future the platform dies.  Doing this runs counter to the cliche that you should listen to your users.  In this case your users don’t know diddly.

Usually when this happens the platform steward is chasing a future innovated by some upstart.  As Google is now doing with Facebook and Twitter.  As the voice telco industry has long been doing with the internet.  And in such cases the existing culture around the existing product is a nearly immovable object.  For Apple the upstart is in house.  I bet that’s an interesting story.  I wonder if you stand outside the Apple campus you can hear the shouting matches.

What’s unique about the Apple situation is that I suspect their primary source of new Mac OS X customers are users who already used the IPhone.  The discomfort those users feel when they encounter the Mac must be huge.  Sum that up and I bet is is much larger than the discomfort the Mac installed base is going to feel as Apple forces them into the new user experience.

But enough about the b-school view of what Apple is doing.  A few comments about the actual changes.

The mouse is pretty much dead, long live touch.  I can’t wait to experience how they designed all that.

Respect for screen real estate is back in a big way.  I’m delighted.  I’m very intrigued by what they did with scrolling, scroll bars, and window resizing.  It looks awesome.  Full screen apps are a no brainer.  If they werent’ so damn modal I’d have expected them much sooner.  It’s interesting to think about what it is that enables them to finally arrive now.

Applications now just are.  They don’t run, they are.  User experience guys have known for decades that this was the right model, so it’s nice to see that we are finally doing it.  The design looks sufficently elegant and complex.  Particularly the codependency on changes in how documents are managed.

I can wait to try this.  Really.  I think this maybe the first Mac OS release since the beginning that has called out to my fancy like this.

My father was wrong.  I learned at my father’s knee that it is wise to self insure for the little things and buy insurance for the big things.  Thus it is clever and thrifty to buy insurance policies with large  deductibles.    It is a little odd to notice that poor people should buy more comprehensive, and hence expensive insurance.  Large economic actors can afford to self insure more than smaller ones; so for example a Billionaire may minimal car insurance – since if he can casually afford to replace the car – but he will carry a substantial personal liability policy since replace his wealth would be harder.  Firms often self insure and some even gin up their own employee health insurance systems.

This advice turns out to be wrong, for most of us.  There are three reasons.  The simple reason: people buy high  deductible  policies not because they can afford to cover the cost of small loses, but because they don’t have a clue what they are buying.  Secondly the marketing of these things is entirely a pure confusopoly; buyers haven’t got a chance.  But the third reasons is interesting.

Insurance has plenty of adverse selection and agency problems.  Nominally a benefit of self insuring is that your less like to engage in some risky behaviors since you will personally bear the cost.  On the other had you remove any incentive for the insurance company to bring it’s scale advantages to into the equation; e.g. the insurance company is likely to work for systemic improvements that reduce risk.

So there is an  argument  to be made that my father’s advice might be wrong.  I noticed this because I have a few medical bills on next to me.  My health insurance includes a  deductible.  What I notice about these bills is that I am not getting the prices the insurance company negotiated with the providers.  I am paying full price!  Note that agency is not all bad; since agency creates a locus for skill.  In this case I have lost access to both of these.  Having taken the choice to self insure for the amount of the  deductible  I now have the option to simulate the skills of the insurance company – i.e. I can call these providers and attempt to  negotiate  a discount … or not.

So this is another interesting story about middlemen.  There are three actors in this story; the service providers, the insurance company, and the service consumers.  I’m am  fascinated  to notice a new move in the game that can takes place during the negotiation between the insurance company and the providers.  In exchange for a reduction in prices the insurance company assures the providers that it will sell more high  deductible  policies.  That’s great for the providers since they can then charge those consumers the list price.  To  fulfill  the promises made during this negotiation the middleman may have to set goals to assure he sells enough of the high  deductible  policies.

That shapes the market in very perverse ways.  The small jobs become the high profit work.  My father’s advise become obsolete.  How weird is it that purchasing high  deductible  policies is a form of free riding – since as long as the insurance company price control feedback is working effectively you get the prices and quality provided by that loop without paying for it.

This is all  marvelously and distressingly perverse.  Since poor and innocent people tend to mistakenly purchase high  deductible  policies (do to regulatory failure enabling market failure) this process shifts costs onto poor people.  I also think this explains why the last car I bought had a bumper design that was prone to failure who’s repair was just bellow the typical  deductible.  The dealers presumably like that.  The usual feedback loop thru the insurance company that would fix it wasn’t just broken – somebody removed it.

The ongoing puzzle, debate even, about the choice points between a closed and open system appears to have picked up a new aspect.  At least I had not noted this one before.  What differentiates a closed model from an open one is the extent that the business hordes the options created by it’s product offerings.  For the firm the open v.s. closed debate comes down to questions about short and long term advantages for the firm and it’s managers.  A closed approach hold out the hope of better price  discrimination.  While an open approach offers a change at wider adoption, more innovation, stronger network effects, and better protection against competitors.

So, the new  argument  I’d not previously seen goes as follows.  It is on the closed side.  A firm can adopt a closed architecture to deal with the rapid technology change.  Closed addresses the immovable installed base problem.  By making closing things down the firm captures the  ability  to migrate the installed base more quickly.  Or, so this story goes.

When dealing with the risk of technology driven displacement a large installed base is both a blessing and a curse.  It’s a curse, of course, because it is slow to move.  But it is a blessing since there is safety in numbers, e.g. an assurance that when technology changes you’ll not be left out in the cold.  The suppliers and users will have plenty of common cause to help solve to manage the switching costs.  In a closed system the vendor coordinates that.  You could argue that in a closed system the coordination problem is easier to solve.  I suspect that’s not so clear in practice.  The installed base ties it’s fate to the competence of the vendor.  The vendor is a single point of failure.

Open makes firms nervous.  Management is all about juggling risks.  Closed offers the impression your in control.  This impression is often wrong.  Closed systems lead to the systemic blindness; provincialism.  And yet I find the  argument  that a closed system is better able to handle rapid technology change sounding pretty good.  Possibly that’s because it’s about supply side risks.  I wonder why I think the closed system blindness issue is less serious on the supply side v.s. the demand side.

Having engaged with this debate for twenty years, and now finding it kind of dull, it’s a delight to see a new aspect to it.