Google Gets Ready to Rumble With Microsoft – New York Times Annotated
The New York Time posted an interesting article on the coming rumble between Google and Microsoft. There are a couple of things to observe. First, Google is picking off the low hanging fruit when it comes to office products. It fully accepts its products are less functional than Microsoft’s:
“If you’re creating a complex document like an annual report, you want Word, and if you’re making a sophisticated financial model, you want Excel,” Mr. Girouard notes. “That’s what the Microsoft products are great at. But less and less work is like that.”
Yet in Google’s vision most things can be done “in the cloud” (by internet-based services):
“It’s a 90-10 thing.” Inside the cloud resides “almost everything you do in a company, almost everything a knowledge worker does.”
The deployment model Google is following is similar to that which Walmart applied which eventually lead them to supplant Sears’ leadership position in retail. Market penetration starts off slowly, often outside the areas of interest of the market leader.
For the moment Google seems to be taking on the consumer and small business markets where cost and support complexity need to be minimized; Microsoft is building its keep in the enterprise. Businesses are being selective in which applications they choose from the cloud and those they run in-house, possibly reflecting the balance between cost/complexity and functionality/security.
“For most people,” he [Mr. Schmidt CEO of Google] says, “computers are complex and unreliable,” given to crashing and afflicted with viruses. If Google can deliver computing services over the Web, then “it will be a real improvement in people’s lives,” he says. Schmidt notes elsewhere “It makes no sense to run your own computers if you are a small business starting up,” he says. “You’d be crazy to buy packaged software.”
About 160 employees of Bank First Financial Services, a small bank in Macon, Miss., have been using Gmail for about two months, happily substituting it for an older system that had been overwhelmed by heavy traffic and spam. Bank workers are also using Google Apps’ instant messaging and calendar features to get immediate answers to customer questions and to set up meetings online.
But Bank First isn’t using Google’s online word processing, presentation and spreadsheets, a package known as Google Docs.
In the meantime, Google has the opportunity to develop its product suite and enhance it making it more marketable. It has the opportunity to address issues the established products don’t adequately deal with.
When Arizona State University, one of the nation’s largest with 65,000 students, decided last year to choose a new e-mail system, it had concerns about the security and privacy of student information and messages stored on Google servers. “It’s like the virtue of banks over mattresses,” explains Adrian Sannier, the university’s chief technology officer. “You feel like keeping the money in your mattress and defending it with your own gun is the right thing to do.” But Arizona State decided that Google, with all its expertise, could do a better job than the university’s own technology department.
But at some point there is enough product capability in place.
According to Compete.com, a research firm, Google Docs is gaining popularity. It had 1.6 million users in November, seven times as many as a year earlier.
Microsoft’s stated vision is Software + Services, meaning their intention is to support both the desktop (software) and the SaaS–Software as a Service– (services) model. But when you speak to them and watch what they are doing one is left questioning their level of commitment. It lacks the level of enthusiasm accompanied by the adoption of previous visions, such as .NET. Microsoft is a big company; they can adopt both with commitment. It leaves one wondering if they are defending an unsustainable model. The image of the stagecoach manufacturers of the turn of the 19th century comes to mind.
“The fundamental Google model is to try to change all the rules of the software world,” says David B. Yoffie, a professor at the Harvard Business School. If Google succeeds, Mr. Yoffie says, “a lot of the value that Microsoft provides today is potentially obsolete.”
The Microsoft approach is largely to try to link the Web to its desktop business — “software plus Internet services,” in its formulation. It will embrace the Web, while striving to maintain the revenue and profits from its desktop software businesses, the corporate gold mine. That is a smart strategy for Microsoft and its shareholders for now, but it may not be sustainable.
Google still has ways to go; rapid growth, excitement in the market bode well for it but they still have a long way to go.
How easy and inexpensive will it be to do e-mail, word processing, spreadsheets and team projects on Web software? Will high-speed network connections soon become as ubiquitous and reliable as Google seems to assume? Will companies, universities and individuals trust Google to hold corporate and personal information safely?
Google and the Wisdom of Clouds Annotated
What may have been interesting in this article from Business Week was that Microsoft was not included in the list of Internet Giants.
To date, only a select group of cloud-wielding Internet giants has had the resources to scoop up huge masses of information and build businesses upon it. Humanity emits the data, and a handful of companies—the likes of Google, Yahoo! (YHOO), or Amazon.com (AMZN)—transform the info into insights, services, and, ultimately, revenue
What does it mean to be an Internet giant?
In the process Google could become, in a sense, the world’s primary computer. A move towards clouds signals a fundamental shift in how we handle information. At the most basic level, it’s the computing equivalent of the evolution in electricity a century ago when farms and businesses shut down their own generators and bought power instead from efficient industrial utilities. Google executives had long envisioned and prepared for this change. Cloud computing, with Google’s machinery at the very center, fit neatly into the company’s grand vision, established a decade ago by founders Sergey Brin and Larry Page: “to organize the world’s information and make it universally accessible.”
Quite different than Software + Service.
How To Read and Understand a Histogram (Professional Photographer Magazine Web Exclusives)
Leave a Reply