 Boy my blogging has been really lazy in the last months – it is so easy to lose the rhythm… Anyways make it one of my new year resolutions….
Predictions are always a dangerous game. As Kara Swisher would say, “could we have predicted a tiny start-up with negligible revenues but explosive growth could be valued at $15 billion? Could we have guessed that Apple stock would be up 135%? Could we have foreseen that a devastating writers’ strike in Hollywood would be waged over nonexistent Web revenues?” So this post is less about a prediction, than a growing interest on my part on the battle between Google and Microsoft in 2008.
The software industry is experiencing a dramatic transformation with the growth of an advertising based business model, the shift from the client to cloud computing and (finally) the rise of rich mobile experiences. This transformation will require the type of scale (think 60% market share for Google in US search), capital investments (think $30B in cash for Microsoft) and software talent that only a few players can sustain.
The New York Times had a great story over the holidays: Google believes that 90% of all computing will ultimately reside in the cloud, as connection speeds become faster and internet software improves. The launch of Google Apps (e-mail, instant messaging, calendars, word processing and spreadsheets) is a great illustration of this trend: 2,000 companies are signing up for Google Apps every working day. The battle for universities is very telling too - when Arizona State University, one of the nation’s largest with 65,000 students, decided last year to choose a new e-mail system, it decided to go with Google and saved $500K in the process. I am curious to watch whether Google can truly capture a significant share of consumers and businesses for productivity applications.
But the NYT article does a poor job in my mind highlighting Microsoft’s Windows Live efforts. As Mary Jo Foley indicates on her blog, Windows Live wave 2 has launched with a comprehensive suite of apps (Messenger, Mail, Writer, Photo Gallery and Family Safety, along with the online Skydrive service), connecting cloud based apps with Vista. Skydrive, for example, is a password-protected online file storage, where you can share files in a private or public environment. Microsoft is also launching a new ad campaign — “Open Up Your Digital Life” — that is designed to highlight how Windows Live services relate to Windows Vista – one the major communication problems Live has had since its inception. And the NYT article does not mention either the massive $6B acquisition of aQuantive, which gives Microsoft access to an end to end ad platform (paid search, display ads, CPA).
It’s still early days – Windows Live wave 2 was just released, Google Apps has 1.6 million users (compared to 500 millions for Office), but the match should be interesting to watch.
What do you think? |
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