Google Versus Microsoft: Clash of the Technology Titans

Google Versus Microsoft: Clash of the Technology Titans

Arguably Microsoft and Google are two dominant players in the tech sector today. Along with Apple they have formed our tech culture of the software and services and products we use today. Lets explore some of the tactics each company uses to achieve their goals.

Microsoft offers a number of products for consumers and business.  One of the most successful is the Microsoft Office productivity suite.  It includes Word, Excel, Powerpoint, Outlook/Entourage and in some packages Access, and Publisher.  If you use a Microsoft server backend, you can integrate SharePoint and MSN messenger into your business intranet as well as Outlook server for calendar and email management.

Because Microsoft dominates the business arena and desktop PC market share, these software suites make a formidable set of tools to go up against. Approximately 93% of all PCs in use have Windows and of those about 75% have Microsoft Office on them.

Microsoft has joined the cloud revolution from the side and a little late.  In the early 2000’s Microsoft envisioned an internet version of Office.  This was mainly as a means to combat piracy and increase revenues.  Microsoft started with the .Net framework as a foundation to create a runtime environment similar to Sun’s Java, but controlled by Microsoft.  As the technology, storage, internet speeds, and ubiquity of wireless access points and portable devices exploded, Microsoft has really attempted to extend its dominance into the cloud. In the latest version of Office 2010, there are the early offerings of Office Live included in the $500 price.

At present, Microsoft dominates the back ends of most businesses and has a strong control over the email and calendar scheduling of millions of business users.  Windows is on 90% plus of the business PCs and IE has a 60% share of the web market.  That is a lot going for a company.  Microsoft has a huge cash reserve, a limited debt load, and massive resources, and shows a profit to investors.  Microsoft has taken on giants like IBM/Lotus, Novel, Sun, Apple and even the DOJ and succeeded in surviving those challenges. 

However it is not all sunny in Redmond for Microsoft.  Many of their attempts to break out of the PC/browser dominance have been thwarted.  For example, the Xbox 360 went up against Nintendo and Sony and while profitable is in third place for market share.  The Zune went up against the iPod by Apple and barely registered with consumers.  Some rumors suggest Microsoft will even pull the Zune. Microsoft Mobile OS for smart phones and PDAs is far from dominating the smart phone scene.  RIM/Blackberry, Apple iPhone OS, and Google’s Android along with the Symbian OS all out pace Microsoft’s mobile offering.  That is especially telling since the 3 of the top 4 are less that 5 years old.  Microsoft’s Internet Explorer won the browser wars in the 1990’s.  However, years of stagnant innovation, frequent perceived security and quality issues have allowed others to take quick market share.  In fact Mozilla and grandchild offshoot of the Netscape Navigator IE crushed is taking market share daily from IE.  Google’s Chrome, Apple’s Safari and Opera’s browser all gain share at the expense of IE.

Google is the dominant search engine firm.  It was not the first, but its simple interface, coupled with better than the competition results made it the de-facto standard for web search.  Google’s main source of revenue is ad dollars.  They sell keywords and content sensitive ads based on search terms.  To provide this level of search capability and the responsiveness of the Google search, they have invested in a massive computing infrastructure.  Since much of this capacity is idle and wasted opportunity, Google entered into the consumer cloud space with Gmail.  Google also created an open system called Google Apps which include Microsoft Office like clones of Word, Excel and Powerpoint.  Google has clearly declared Microsoft’s domination is in their sites. 

Google Apps is a suite of internet cloud based applications for consumers, educators and businesses to use.  It has a minimal cost with a maximum fee of $50.00.  The apps provide about 75% to 95% of the functionality of a desktop equivalent.  Google’s hope is to lure business customers from the desktop into the cloud and provide a PaaS solution to them. There are considerable merits to this approach.  It reduces expense for the firm, as Google’s offering costs less.  It means less powerful PCs are needed as much of the computing needed is done via the server side and not the client side.  Documents are available anywhere and collaboratively all over the globe.  Some drawbacks include security, internet access availability, compatibility with the standards, and features. 

Google is working hard to address all of those.  Google has worked hard to provide robust cloud security into its apps for business with permissions, encryption and back ups.  Google is experimenting with offering city-wide broadband for free.  That would increase the availability of wireless access points to the internet and make a cloud service so much more relevant.  Google can update its online apps at any time and add features with no costly upgrade and downtime.

Microsoft’s response to Google by integrating Office Live in Office 2010 shows they are wary of this new threat to their dominance.  Like Microsoft Google has a lot of resources and talent to innovate.  Unlike Microsoft, Google has a lot of consumer goodwill.

I think there is little doubt these two giants compete in the same space and that the future of computing will be more likely in the cloud than on the desktop.  Mobile computing and synchronized data is becoming a need and Google is better positioned at the moment to offer it. However based on Microsoft’s history of coming from behind and dominating, you cannot count them out.  But recent attempts by Microsoft have been less than successful at this.

Microsoft’s strategy is mostly unchanged from the past that helped them dominate the desktop, while Google is offering free/low cost services in the cloud. Microsoft’s bundling and familiarity certainly help it, but cost is an issue, especially in developing markets.  Microsoft may find itself loosing out market share to foreign markets where total cost of ownership is far more important.

Google's quest to have the PC replaced by the internet is not unknown.  In fact their Chrome OS and other endeavors are paving the way for this to happen.  Will the desktop PC evolve into internet appliances and cloud based services?  I think it is inevitable that this will occur and future devices will live more on the web than locally.  Portable devices like the iPhone, Blackberry and iPad are becoming more powerful with every new release.  Thanks to Moore’s law, the CPUs are getting faster, smaller and cheaper and today’s portable devices rival the power of desktops just a few years ago.  It was said in an interview at E3 the gaming convention that the original iPhone had the same computing power of all the world’s computers in 1980 combined. In terms of raw calculations per second, there is some truth to the statement. 

The internet is a powerful tool.  The United States in particular lags behind nations like Korea and Sweden for broadband access.  The average internet speed for the entire US is the equivalent of low end DSL.  While I am luck to have fiber optic lines at 35 MBPS speed, many in rural America are still on dial up or a slow cable connection. I do not think the internet based cloud technologies can ever be the center of action until the United States improves its broadband access for the entire nation.  I do feel that the foundation is there, and in other nations, the technology to jump from desktop to cloud could happen.  As more and more consumers demand powerful mobile computing devices there will be more financial incentive to update US infrastructure.

We are at a pivotal point in computing history.  For example, we have a convergence of home media and computers.  Just now the integration between a home digital PVR, home computer and mobile device is taking place.  About 25% of households have the ability to stream from their TV service to and from their computer.  For example, with my Samsung wireless BluRay player, my iPad, a NetFlix subscription, AppleTV and iTunes I can watch thousands of movies on my computer, TV or iPad with a few simple actions.  I can rent films in HiDefinition and take content from my TV service and transfer it (not exactly with the provider’s blessing) to a mobile device. Google has recently announced a TV net appliance and Apple is poised to revamp their AppleTV. This type of convergence will become more common as technologies improve and standards solidify.

I predict in less than 5 years we will see the displacement of the desktop for the cloud and more flexible multimedia devices will allow us to consumer our information and digital content from cloud based storage.

Growth in today's economic times is hard to come by.  Microsoft has struggled with its products and offerings.  Windows 7 was lukewarm, and Windows 8 is not looking to blow any socks off.  Microsoft's new phones are playing catch up with Google and Apple, as well as players like Samsung and HTC.  Besides the XBox, Microsoft has been stagnate lately. 

Microsoft has had a presence in the search business since the internet boom of the early 1990’s.  It has gone through a few incarnations.  Microsoft’s search product has been known by many names.  MSN Search, Live Search and Windows Live Search and now Bing.  All of them have been a distant third to Google. 

Yahoo was one of the first mainstream search systems for the nascent web.  It started as a hierarchical list of popular web sites by category.  It grew into many things, like a portal for users, a search engine and a directory engine.  Yahoo did well at first with some innovative marketing and partnerships.  It was dethroned by Google’s search, which used an algorithmic system to page rank popular pages and content and often delivered more relevant searches faster than Yahoo or MSN.  As Google gained dominance over search, Microsoft felt it needed to enhance its market share and technologies.  The only serious option was to purchase the number 2 company, which is Yahoo. Microsoft felt a merger between Yahoo and MSN search would provide an instant traffic boost, help with advertising revenues and allow a technology swap to take the best of both engines and launch a formidable attack against Google.  Yahoo’s management and many of the stockholders felt the offer from Microsoft was too low and undertook a number of actions including a poison pill option to make a hostile acquisition less desirable.  The plan backfired, as Yahoo’s stock plummeted and Google gained more market share.  Eventually Microsoft and Google did reach an agreement and Yahoo search is partially powered by Bing technologies.

I think it was unwise for Google to attempt a full out acquisition of Yahoo.  It is apparent when you look at the two campuses and employees the cultures are very different.  Microsoft was born in the 1980’s boom while Yahoo prospered in the 1990’s internet boom.  Many of the employees of Yahoo grew up thinking Microsoft was the ‘enemy’ and not to be trusted. Strategically Microsoft needed to gain market share and acquisition of Yahoo would be a fast way.  I think it was unwise, as drastic changes to Yahoo would cause many to jump ship to Google and ultimately dilute the Yahoo name, which is what holds most of the value for that firm. What Microsoft did by creating Bing did help the strategy of Microsoft.  Bing is simple like Google.  Bing is a catchy name like Google.  Certainly roles off the tongue better than Windows Live search by MSN.  Bing is marketed as a decision engine, rather than a search engine.  Bing provides some enhancements in interface over the classic Google look.  Because Google is so familiar, the engineers at Google are locked into their format to some extent, while Bing could improve upon how its results are presented. 

Was the attempted merger a good idea? No, as it hurt Yahoo’s value and image and the firm ultimately had to partner up with Microsoft to survive.  It did not accomplish the goals of Microsoft and may have harmed them.  Bing is proving to be popular and may be included as the default search on rival Apple iPhones and Safari Browsers in the next iteration.  In the technology world yesterday’s enemy may be tomorrows ally.

Yahoo has had a stay of execution and a new lease with its change of leadership.  However will the future of search be directory after directory of index pages or will it be something more.  While far from perfect, Apple's Siri and Google's similar offerings are the probably direction of search.  After all, why type and scan results when a smart assistant can infer meaning and context and get the results better?

Speaking of digital anticipation and assistance, there is Google Apps. Google Apps is very important to Google.  Over the past 24 months they have released Gmail, Google Apps, the Android phone OS, the Chrome Browser and announced a PaaS Chrome/Android based OS.  They have set their sites on two firms in particular, Microsoft and Apple.  Google makes the majority of its revenue from selling ads.  It recently purchased AdMob a leader in mobile advertising services.  Google has clearly stated they want to dominate the web and plan to do so with a multi-front attack on Microsoft and Apple.   

Google Apps takes on Microsoft Office.  For most users Google’s version is free, simpler to use and has a few features Office does not.  Even when Google charges, it is a fraction of what Office costs American firms.  Much like Microsoft gained market share through bundling of IE, MSN, etc. with Windows, Google hopes to use its dominance as a goto destination to help it defeat Microsoft in the productivity suite wars.  There is a large and growing contingent of people unhappy with Office.  Partly because of the bloated feature list and performance, partly because of the costs and partly because of the proprietary standards.  Sun Office, Open Office and Google are all viable alternatives.  The first two are desktop replacements available for Windows, Mac and Linux systems.  Google took the PaaS approach and placed Google Apps in the cloud. 

Platform as a Service (PaaS) is a paradigm for delivering operating systems and associated services over the Internet without downloads or installation. PaaS is sometimes called "cloudware" because it moves resources from privately owned computers into the Internet "cloud." Platform as a Service (PaaS) is an outgrowth of Software as a Service (SaaS), a software distribution model in which applications are hosted by a vendor or service provider and made available to customers over the Internet. PaaS is a development a platform where the development tool is hosted in the cloud and accessed via a web browser.

With PaaS, the software aspects have been enlarged to encompass an entire suite or OS.  Operating system features can be changed and upgraded frequently on demand as needed. Geographically distributed development teams can work together on software development projects. This is done with cloud computing.  A server farm hosting the servers, providing the data crunching and storage and link to the internet reside elsewhere in the world and the client can access the platform from nearly any web enabled source device.

Many benefits for using a PaaS exist. Initial and ongoing costs can be reduced by the use of infrastructure services from a single vendor rather than maintaining multiple hardware facilities that often perform duplicate functions or suffer from incompatibility problems. Overall expenses can also be minimized by unification of programming development efforts. Having in house design and maintenance of a server system that can handle peal loads and redundancy means having extra capacity that sits idle.  In essence, you are paying for electricity, space, software, and hardware you don’t always need.  A PaaS provider has this can distribute it dynamically to all of its clients and thereby offer the same performance for a lower cost.

Google as a PaaS provider with Google Apps can deliver benefits Microsoft cannot offer yet.  Microsoft is fighting back with Office Live.  Microsoft has dabbled with the cloud service for a decade with the .Net framework but only now is getting serious since Google poses a threat.

I do not feel Google Apps is the only product that the success of Google hinges upon, but it is part of the big picture.  Google showed it was moving into many market spaces with the Chrome Browser, the Android mobile OS and even talks of music downloads and video downloads piggybacked on its YouTube service.

Google apps is slowly becoming more mainstream.  In versions past, Microsoft Office was an expensive must have for home and office alike.  In recent releases Microsoft has reduced the cost and make adoption easier and cheaper.  But there is massive feature bloat.  How may home and small office users need all the features? They don't, they just need compatible files with a familiar work stream.  Enter Google Apps.  The price is right, the compatibility is getting near perfect and the work flow is easy to pick up.  A tool is a tool, and if the tool offers me compatibility with others, is easy to use, provides me new features and the price is right I will use it. I must add this caveat, I do not yet use Google Apps for mission critical work – yet.  For example, this case is typed on Microsoft Word and has been posted on my cloud server so I can work on it at home and work, etc.  So why did I choose Microsoft over Google?  Reluctance to change and familiarity with other products are my main reasons.  I know Office.  For better or worse, I know its features, its bugs, its annoyances and its pluses.  I am not quite willing to trust everything to a system I have not thoroughly learned.  Nothing would be worse than to loose time making a presentation for school or work in Google apps and realize 85% through it I could not complete what I wanted. My goal for myself is to get to know Google Apps better because I feel it or something akin to it will be the future.

Which model will prevail? I think the cloud based system favored by Google will prevail.  Technology changes so rapidly it is hard for any firm to stay relevant.  I look back at 1980 to 2010, a 30 year span.  In 1980 I was using a 16 kb Apple II computer with a 300 kpbs modem to access the text based Compuserve system.  As a teen it was great.  I could play games (albeit text only), download files (albeit it took hours for a simple text file) but I could do stuff. In 1990 color computers were the rage and online was provided by AOL.  Who could think AOL would ever fail to dominate?  Everyone had an AOL email and those many hours struggling to dial in and getting busy signal proved AOL was the place to be.   Look at AOL in 2000, a pale comparison.  Apple was once an innovator, nearly went out of business and reinvented itself and numerous computing genres to become dominant and relevant again.  In fact, some like Apple’s dominance of today to Microsoft’s’, and the DOJ is even looking into Apple for antitrust issues for its iPod, iTunes and iDevice dominance.  Technology changes rapidly and the companies that provide it often change.  In 1970 IBM was THE computer company of all time.  Now they do not even manufacture computers.  The old is always replaced with the new, and the paradigm of the desktop is over and the cloud and world of constant connection with content available anywhere anytime will replace it.  Will it be Google, Microsoft, Apple, Amazon or some other player who deliver it?  I wish I knew so I could buy up the stock, because whatever company dominates this arena will be worth a fortune.

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