The future of Google vs. Microsoft - and why M$ could be a dangerous bet...
We predict that Microsoft will lose considerable market share after 2 years for their Desktop Office productivity software and Windows suite of Operating Systems (Desktop and Server) - and Windows 7 will be their last "dominating" release.
OK, so you have just said, "sure, mate! People have been saying that for years.."
Linux was supposed to challenge Windows for the Desktop. Mac already had a big try at it. Both didn't do a good job - although Mac has come back strongly recently with the help of their "mobility" approach.
Open Office is still not quite right - therefore the average user will fight against change...and after 20 years of MS and 15+ years of Windows - most have been going with the status quo...but that was because the alternatives were not there...
This is a seriously driven company - with top management that have created a company culture that demands innovative thinking, freedom to take huge risks and have gone into the market for the best minds...when they put their minds to it - along with a few billion - there is a very good chance they will crack whatever it is they are going after...
Now, look at the business environment - what key pieces are required to get control?
- Email - Gmail vs MS Exchange
- Google have sync tools to migrate all email into Gmail at much better pricing
- Contacts - Gmail vs MS Exchange
- Google have sync tools to migrate all contacts from Outlook or Exchange
- Google have sync tools to migrate all events from Outlook or Exchange
- Office - Google Docs vs MS Office and Live
- All Office docs can be imported and exported as MS Office formats in Google Docs
- Adding fully integrated features every day
- Mobile - All mobile major devices can sync to Gmail
- Google have sync tools for all major mobile devices (Blackberry, Windows, Android)
- Google have cornered the Android market - see here
- Google have the most powerful search, maps and other SERVICES for the mobile - fully integrated into the "Google Account" - most of it free
- Google Voice is in the US - and coming to other countries..
- Other Business Solutions & Services (ERP, CRM, Analytics, eCommerce, etc.)
- Google will buy more existing services to be able to offer these - but they will have to be fully integrated into the Google platform for them to take them on
- Google already work closely with existing services - via their APIs - such as Salesforce.com
The only area where Google has not sealed the deal is with the web-based office. They are going hard for this goal and rely a lot on HTML-5 - which will add very rich features to their service - and will bring them closer to a normal desktop experience.
Almost every day, Google is releasing new features for Google Docs. This service provides any Google user with a free web interface to an "Office" experience. There are many individuals, SMBs, large enteprises and government departments already using Google Docs. It is a great service that does have limitations - in terms of functionality - but it gets better every day.
Following are some points to consider regarding these two monsters;
- Google will never have full control of business and users until they can deliver an equal or better office experience than MS Office
- MS knows this and are also working on their own web-based version, called MS Office Live Workspace.
- In typical MS fashion - it only works with IE - which depends on the survival of the Desktop to stay relevant - which depends on Office to stay relevant (ever got caught in a cyclical function in excel??) - catch-22 and self-defeating...eventually the only thing needed on a Desktop will be hard disk - unless all the content is stored online - a definite desire of the monsters..
- Google Docs works in almost all browsers - including IE - although they will dilute that when the time is right - see here for more on this
- Both must fight tooth and nail to be the best - but once the web-based office experience has been achieved by Google, the integrations of other important apps and services will be a decider - as well as price..
- Google is a pure web-play - the perfect PaaS with perfect SaaS - they are already the perfect cloud;
- MS knows that to compete, along with keeping pace with Google Docs with their web-based office suite, they must also move to the cloud - and have started this in "Azure" - more on this below..
- MS has been traditionally tied to the desktop with their cash-cows (Windows OS, Office) and have always been on the backfoot with regards to the web/Internet. Examples;
- When Netscape was released, MS scrambled to develop their own version - Internet Explorer
- When free web-based email became interesting with Yahoo! - they bought Hotmail - which is now called "Live"
- When search became a deciding factor in web-based Ad revenues - they started their own - first in MSN, then Live - and then bought Blink
Hmm..they sound like brilliant companies - and they are - and we will be seeing some awesome services - so why should one be afraid of them? Well, that depends on your line of work and how the various interconnections get affected by these two monsters' inevitable future...
- To compete fully to stay relevant and survive, they must both;
- Provide similar, competetive services
- Build similar infrastructures (ie. their own, private Clouds)
- Google does not use vendor hardware or software - so the more people on Google, the less hardware and software to be sold
- They must attract new customers and retain existing ones on the SERVICE - as well as attract customers from each other and competing "platforms" or services.
Here is an interesting question for you.
If it is accepted that MS must compete with Google and keep pace with their services, as well as build a similar infrastructure - and be almost 100% web-based - what platforms would be competing with MS?
The answer is, ironically, their own. Yes, their own server-side or desktop software - and even the OS that are NOT yet on Azure. In effect, all the customers of businesses that build their existence around MS software, will in fact, be targeted by MS, such as all the customers of companies offering MS Exchange - System Integrators, Resellers, Distributors, etc.
To fully compete with Google, MS MUST migrate these end-users over to Azure. This means that all the businesses that relied on selling MS and supporting MS software - will be competing with MS for the same customers. Here is an example;
Company X is a System Integrator. They are Resellers of IBM hardware, packaged with Windows 2003 as well as MS Exchange. They had previously been making a killing setting all this up for their customer, a medium-sized insurance company. The Insurance company used a number of agencies to provide support engineers to maintain their servers and thousands of desktops. These agencies make a slight margin on the engineers they place in such companies.
Now, if Google or MS Azure were to take the Insurance company as a customer, all of the above players (and many more) will be out of the picture. Gone will be the over-priced MS Exchange servers managed within their office or maintained by over-priced System Integrators and expensive support teams. Replacing this will simply be a monthly subscription to whatever services they wish to consume. The service will have better SLA, fully supported, always available and they can now add more seats for their core competencies - selling insurance.
One final point - if we can agree that EVERYTHING starts from an email account - then controlling the email is like gold. It connects the user to their email, of course, but that will then connect to their calendar and contacts. What is more powerful than controlling one users' email address? It is the control of the domain! The domain management provides ability to upsell everything - homepage web hosting, email accounts for all users, VOIP Accounts - one for every email account user. So, once there is convergence of the Desktop to the web, there will be convergance of the fully outsourced hosting experience in the cloud.
One might say "too many eggs in one basket" - but if you look at most IT departments, they are trimming down and already outsourcing where possible - and the competition is on for less cost and greater margin - IT departments are an initial target - especially where other options are available.
So, what can be done? To be honest, not much can be done in small steps - so shift your business model and aim towards a more service-oriented play. Owning IP will be key. Offering unique, niche services that add value will always have space. Decide which monster you like most (or use both) and develop towards their APIs. As you and all your competetors will also be in the same boat, how you Brand your Bundles of (resold services) will be the final key factor in your survival.
If you are a consumer or end-user? Enjoy the ride!
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