Google Apps has rapidly shown that there’s more coordination going on at Google than people had perceived in the past. Tighter integration between Google Apps, access to a user’s desktop, and offline access facilitated by Google Gears has the makings of, for one thing, offering an Office competitor that wins on simple and cheap vs. feature-full and expensive.
But, the question is always if Google cares about pursuing that vision and revenue-gamble, which their public comments always seem to flippantly dismiss.
I said the above a few weeks ago when commenting on Google Gears. I’m all over saying that Google is competing with Microsoft Office, and Microsoft in general. This declaration gives several people the willies.
The topic came up in last week’s MonkCast (which we should probably rename “The Weekly Google Update” ;>), and Joe Wilcox has the latest articulation of it today:
More acquisitions are sure to come, if Google is serious about the business market, particularly enterprises. But that’s a natural extension of Google’s information-driven business, not a competitive move against Microsoft.
I don’t begrudge anyone the subtitles of a “natural extension” vs. “a competitive move.” Such nuanced understanding is fair enough for sure. As both David Berlind (in the above mentioned MonkCast) and Wilcox re-articulate, Google is a threat to Microsoft.
Responding to a Money-suckers
My begrudging shiftiness aside, the difference between a “threat” and “competition” to me is sort of moot: as the threatened party (here, Microsoft), in either case, you’re loosing money and you want to stop loosing money to the money-sucker (here, Google). The options are clear for the threatened party:
- Build a better mouse-trap – out-innovate the money-sucker
- Dump – either on price or with even lower barriers to entry
- Partner/acquire – if you can’t beat ’em, join ’em. Or, if they’re cheap enough, buy ’em!
There are other options — litigation and FUD are popular among elder companies — but those are the top three.
Tech giants are loath to partner, and Microsoft probably can’t acquire Google unless/until Google tanks. This leaves building a better mouse-trap and dumping. Google is already the master of dumping, having figured out using ads to subsidize that dumping. The ad money brings in enough cash, that Google can give away software or sell it at insanely low prices ($50/year Google Apps is cheap). As long as ad revenue keeps filling Googles coffers, they can out-dump as fast as they can innovate.
This leaves Microsoft with the option of building a better mouse-trap. In the URL-based world of today, that means not only building better software, but building better community.
Community Sidebar
While most any elder company understands how to build better software — if they can just get over themselves and kill their old darlings — building a better community is still a black art. Sure, we have open source and Web 2.0 companies to draw from, but a book along the lines of How to Build, Compete With, and Profit from Communities is yet to be written and canonized. Sure, we have plenty of of “simply be awesome!” sources to pull inspiration from, but those are sort of like those old recipes that say “add spices to taste.” You could call it a craft rather than science, I suppose.
Competing for Attention
Back to the main point, though: Google is competing with Microsoft in so much as Google is on the path to subtract cash from Microsoft’s bottom line. I try to avoid being zero-sum, but at the scales that Google and Microsoft operate at, things are zero-sum: time spent on and with any Google propery/service is time taken from Microsoft. And it goes the other way as well. If I’m using GMail, I’m not using Outlook and Exchange. If I’m using Google Search, I’m not using Live. If I’m using Google Docs and Spreadsheets, I’m not using Office.
Google makes most of it’s money from declarative living, attention, and gestures. The money-maker is this: I’ll spend money on things I’m interested in.
So,
- I declare, and tell Google, what I’m interested in by searching
- I improve Google’s understanding of what I’m interested in by paying attention to different email, feed items, pictures, and any other analyzable hunk of data I host or pass through google.com
- I click on ads or otherwise “gesture” in the direction of people who want to try to sell me something
It’s usually at this last point that Google collects it’s cash.
Cash Firewalls
Thus, most time spent on corporate networks is competition with Google. Google has a slim foot-print in such networks, so it can’t go the above attention-to-cash sieve as much. Now, there’s plenty of people goofing off at work, spending time with Google, sure. But my point is that Google has less of the “official work time” pie than other tech companies.
For example, I can’t be looking at ads and clicking them (making money for Google) when I’m hanging out in SharePoint. Now, Google could “fix” that by expanding the install base of things like the search appliance, Google Desktop, and acquiring hybrid intra/internet applications like SpiceWorks. I was an early fan of the search appliance, but corporate search has always been a weird thing. It tends to get crudded up in the RFP tub wherein you end up with something that does everything the search committee wanted, but no one wants to use it.
This crudding up is a good example of something David Berlind mentioned on another MonkCast: there’s a battle between complexity (existing software) and simplicity (* 2.0 software, esp. Google) going on at the moment. In the business, and esp. the enterprise world, complexity is winning. Sure, chances are looking good, but we’re a long way off from finishing the struggle.
$625M is not flippant
The problem with the above expansion into the enterprise is that Google is always acting sort of flippant when it comes to the business domain. No one is quite sure if they really care about eye-balls on the corporate network. That’s why business-minded people tend to get excited when Google does anything related to non-consumer sales, like plunking down $625 million for Postini today.
The hope is, “yeah, now they’re going for it big time! Enterprise sales!” We’re sort of hoping for some down-and-nasty vendor-sports. Which is another thing that I don’t think we’d see the Googleplex too happy about. Vendor-sports — competing directly and on purpose — in software is a nasty, sort of Machiavellian practice. You know, it’s like what the popular kids do in high school. Is it really in Google’s nature to start slut-rumors and pop-towels? They’d rather just publicly record all their social engagements and build their own locker room.
If the cash ain’t mine…
The point for me is simple: Google wants people to use it’s software and click on its ads. Sure, it may not be on purpose that that means pulling people away from Microsoft software and services. Nonetheless, it means competing to get attention and dollars that could otherwise go to Microsoft and other vendors. What irks me most about this position is not the people who espouse it — like I said, “potato,” “patato” — but that Google itself seems so, well, goofy when it tries to weave and duck on the issue.
The question for Google isn’t “are you competing with Microsoft?” The question is more along the lines of: do you want as much of Microsoft’s attention-cum-revenue as you can get?
Disclaimer: SpiceWorks is a client, as are parts of Microsoft.
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