Of Google and Microsoft

by coelomic

Google has gradually grown over the years to become a leader in many of the up and coming properties on the internet and seems poised to make a profit of their mass market appeal, be it search in which they have a fantastic lead to calendaring and the like. The use of software seems to be slowly moving towards a model wherein people will not own software but may have to pay to use it as and when they need it, and Google seems to be in a great position to capitalize on their grassroots popularity.

I recently read how MS and Yahoo are scrambling to catch up with Google. There are many interesting points to note in this interesting saga. Microsoft is one of the most profitable of companies today, having made a lot of profit selling the Operating system and its Office suite of applications. It had been a steady source of cash with little in the way of competition. If Microsoft felt threatened by, or even jealous of, a new or rival technology, it could create something similar and fold it into its Windows operating system. Since Windows powered just about every personal computer on the planet, Microsoft’s version of the new program would get unassailable, worldwide distribution. They have had the money, power and the resources to jump into any field, sometimes very late and then use their hegemony of the market to drive adoption of their “solutions”. This has been the game always, as the Netscape folks will tell you. All MS had to do was to ensure that people bought hardware that they could install the software on. Arm twisting and bundling of software to take down its competitors has been the corporate strategy and they have been good at it. 

As of now, most homes and offices have computers and most of them have MS Windows installed on them, and so over the last few years MS has found that its heady growth of the yesteryears is slowing down. In search of new avenues for growth MS has been involved in many fields that have a need for software. All the while emphasizing their Windows platform strategy.

Enter Google. Having begun as a small startup, that offered to search the then nascent internet, to the now behemoth looming large on the horizon, the company has had some spectacular successes. Like many of its competitors MS probably underestimated this company as well. Google now offers an amazing array of services, some of which encroach MS’s own turf. The big difference lies in the fact that unlike MS, Google has been phenomenally successful in leveraging a strategy of offering ad supported services. It has been so successful that MS has also gotten into search and advertising. Google is not the only one to compete with MS. Today, AOL’s instant-messaging service still dominates the landscape. File-sharing software and Apple Computer Inc.’s iTunes have redefined how the digital world gets and listens to music and videos. Yahoo is the most trafficked Internet portal. MS is playing catch up in all these areas!

It is quite comical to see that MS has suddenly woken up to the fact that Google is a competitor.  Actually Google is not in direct competition for the revenue streams of MS but is employing a strategy that will dictate the way we will probably use software in the future, and that is ” software as a service”.

At the outset, I feel that Google and MS are different animals. Google stated purpose is to organize the world’s information and make it universally accessible and useful”. Its a reasonably concrete and exciting idea, and they have been relentlessly moving towards that goal by creating services that people use to produce information that can be organized by Google. Whereas MS seems to have gotten the idea that if they defeat Google at the search engine game then they have the upper hand. MS also worries that if software as a service garners the attention and use of many a web user then, they will be in deep trouble, as this will prey on their revenue streams, namely Windows and Office.

Note that in the face of such onslaught from Google and their grand vision, MS has not been able to put up a credible fight. For starters their motto seems to be “help people and businesses throughout the world realize their full potential”. Or, in marketing-speak, “Your potential, our passion”!!  Not sure about that. Google seems to be providing the tools to help me realise my passion, as of now.

Microsoft hopes to straddle the fence: extend its software with online features but lead its rivals by continuing to leverage its power over the PC. Gates and Ozzie said the company’s advantage would derive from a “seamless” computing experience with Windows still at the core, enabling users to do more than if they cobbled together alternative, Internet-based software or services. Today one is not restricted to software provided along with windows. there is a whole sea of startups that provide services, many are free, that are much more exciting and interesting. Flickr, Del.icio.us comes to mind.

Microsoft seems to be competing on too many fronts and a divided force is showing its strain. In spite of bold words, MS has been playing catch up in most areas in which it operates. Search is the most important of them where Google absolutely dominates.

The rules of the game have changed. When its dominant desktop software was the only game, Microsoft could dictate the direction of the development of many related programs and tools. Developers who wanted their creations to get wide use had to work on software that would work in the Windows environment. Now that the Internet is a mature platform for writing and distributing software, it is teeming with creators who often work collaboratively to develop programs that are deliberately not oriented toward Microsoft.

It’s quite nice to see some much needed competition in many areas of everyday computing. One thing is sure, we live in interesting times

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