Analyst Opinion – Microsoft’s business is built on four main software pillars - Windows, Office, Windows Server and IE. The two most important, because they have the greatest number of related offerings, are Windows and IE. Windows has been struggling for some time and IE as been losing ground slowly to its rivals, especially Firefox. But Firefox against IE is kind of like Switzerland against the U.S. The resource mismatch is massive and you’d think Firefox would have failed given this massive disadvantage. It didn’t and has become a poster child the power of viral product growth. But now Google is joining the party – with funding levels that rival Microsoft.
It is part of Google’s strategy to go after each Microsoft keystone product. They started with Google Apps, which targets Office. Then they moved to Android, which begins to target the OS. Chrome is targeting IE and serves as the first major attempt to create a beachhead in Google’s long term battle to displace Microsoft.
While many think Chrome is a direct shot at IE, it is actually a flanking move aiming at Windows - and Google may be getting a little help from Apple.
Displacing an entrenched vendor
One of the primary rules you learn in competitive intelligence, a field I was in for a number of years, is the cost of displacing an entrenched dominant vendor can’t be justified. At least unless the market is already moving to something else, the entrenched vendor’s customer base is dissatisfied, and/or the entrenched vendor helps you.
I first ran into this doing an analysis of a software package called Crosstalk years ago and we determined that the product was simply too entrenched to overcome. It no longer exists, because a package that could connect you to a large number of properties like AOL simply wasn’t needed once the Internet was established. The market moved.
IBM lost its dominance with mainframes largely by both helping Microsoft get started, effectively introducing them to the IBM account base and agreeing that the mainframe was dead and accelerating its decline. It is kind of ironic that mainframes are still one of IBM’s most profitable businesses years later and that what we are seeing Google build is more like a mainframe in concept than the distributed world of Windows that they are trying to displace.
Google is moving on the first strategy and trying to force a market move that would render Windows obsolete and then ride the wave in with a browser specifically designed to be a front end for a cloud-based platform. This platform doesn’t initially have IE in its sights, in fact it probably will initially co-reside with it and other browser. Its target isn’t initially IE at all – its is Windows and a spring board for Google Apps to take on Microsoft Office.
We are all living on the web already. Eventually, we will always be connected wherever we go, but that is not yet the world we live in today. Cloud Computing is focused on this future world and is still not yet capable of truly displacing the Windows platform we’ve come to know and, well, tolerate.
What the Cloud promises is the retention of state, allowing you to revisit your desktop applications from any compliant device just as you left them. With adequate network performance it can actually come close to that with the proper applications but Google Apps aren’t where they yet need to be.
A better solution than Google Apps is actually ThinkFree which has been around longer and more efficiently embraces the Microsoft Office user experience. I think the reason Google didn’t buy them is because Google has caught the “Not Invented Here” bug that most companies eventually catch and the end result is it will take them significantly longer to get their offering to an adequate level to truly displace Office.
On the other hand, Chrome, as a Windows like Cloud interface, isn’t bad in its beta form. Once you realize it isn’t intended to truly be a replacement for Firefox or IE, at least not initially, and compare it to a typical Windows’ window, it shows potential.
Timing, Android, and Apple
Had Google released a product on top of Vista, the timing would have been perfect. But with Vista now patched and Windows 7 due by the end of 2009, the window that was created by the Vista launch is rapidly closing so the launch is not well timed. However, Chrome seems to initially be getting decent reviews for a generation one beta product. However, like any platform product, the test will be what unique and compelling applications will run on it.
I think Android will play a big role in contributing to the application problem since the phone is designed to run the same browser native and we know Google has already selected 50 applications they think will make Android shine. Many of these may also be compelling on a larger screen.
The more interesting aspect of this is the role Apple may be playing. For a while, Google and Apple have been loosely coupled and this suggests Safari may gain some Chrome features and provide Mac users with a unique solution only available on the Mac. This will anticipate what Chrome will later evolve into and, if you really look at Chrome, you’ll notice it has an Apple like simplicity and elegance already. I think there is more going on between these two companies than we know and that could lead to some interesting future things.
We are moving to a different kind of platform than the PC we have become familiar with. Microsoft released Equipt, now Google introduces Chrome and I expect Apple will announce their counter shortly - likely with Google’s help.
The Cloud represents a significant amount of potential for allowing us to work and play anyplace, anytime we want.
I have a feeling the kids in the 2020s will look back at the early years in this century much like we look back at the early years in the 1900s and wonder how people lived this way.
Rob Enderle is one of the last Inquiry Analysts. Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them. Currently he provides his services to most of the major technology and media companies.