Microsoft's Biggest Threat - Google or Open Source?

Glyn Moody writes "Google always plays down suggestions that there's any looming clash of the titans between itself and Microsoft. Meanwhile, the search giant is pushing open source in every way it can. They're contributing directly by contributing code to projects and employing top hackers like Andrew Morton, Jeremy Allison and Guido van Rossum, and indirectly through the $60 million fees it pays Mozilla, its Summer of Code scheme and various open source summits held at its offices. Google+OSS: could this be the killer combination that finally breaks Microsoft?"

Comments

Since when are these even direct competitors?

[kapowaz]

Google are an advertising company. Anything it invests in is done with the ultimate objective of selling more advertising. Microsoft is a software company who have, admittedly, recently taken an interest in Search tools, but not with the objective of selling advertising so much as adding value to its own software and services. One of the reasons Google doesn't talk up any direct competition with Microsoft is because they're not direct competitors. Until they're both directly selling software to the same target market this will remain the case.

Re:Since when are these even direct competitors?

[babbling]

GMail versus Hotmail.
Live Search versus Google Search.
Google Earth versus Virtual Earth.
Windows Mobile versus Google Android.
Google Docs and Google Pack (contains StarOffice) versus Microsoft Office.
Google pumping money into Free Software (Summer of Code, employment of key developers) versus pretty much any proprietary software (Windows, Office, IE) that Microsoft tries to sell.

The main way in which they're not competing is where their primary profit lies. Google doesn't make much money off software distribution yet, and Microsoft's primary source of revenue isn't advertising yet. There are certain areas (eg. document applications, mobile phone operating systems) where they plan to make money in different ways. Google wants to display ads alongside your documents, whereas Microsoft wants you to buy their office suite. Google is developing Android to get as many phones as they can internet-enabled so that people use the internet more and are exposed to more of their ads, whereas Microsoft wants mobile phone manufacturers to pay them a license fee for each mobile phone running Windows Mobile.

I think we're all familiar with Microsoft's business strategy. It's fairly simple: they sell software. It works well. (or at least it has until now)

Google's strategy makes it look like they're diversifying because of all the products they're launching, but I think they're actually just trying to put their ad network in as many different places as possible. They've done it for search, documents, emails, and videos. They're looking at putting internet onto phones across a wider audience, and they're surely hoping that some new types of services will emerge that are compatible with their advertising model.

Re:Since when are these even direct competitors?

[spisska]

Microsoft is a software company who have, admittedly, recently taken an interest in Search tools [...]

MS is an OS and applications company that has recently taken an interest in search tools, and advertising, and game consoles, and live services, and mapping, and portable music hardware, and low-end laptops, and enterprise servers, and smartphones, and content delivery, and standards, and anything else involving binary code that they can get their hands into.

The problem with MS is that they've lost focus on the business that built and sustains them -- Windows and Office. As it stands, Office is still the must-have application, which drives every business in which MS is successful. Replace Office, and you no longer need Windows, Exchange, MS Server, MS SQL, etc. None of their other activities are successful -- they're either gaping sinkholes of cash or so marginally profitable that they're unsustainable for anyone not sitting on $50 billion in cash.

What Google gets right is that their entire business is focused on the core of search, advertising, and the organization of information. Everything they do points straight back to and reinforces the core business.

Google's business is possible thanks to OSS tools, and Google deserves respect for going well beyond what is required under OSS licenses and actively contributing code and developer time to projects that are only marginally related, or completely unrelated to their core business. This doesn't cause them to lose focus, but it does keep their developers sharp and happy, and able to approach problems in completely new ways.

Take the office suite, for example. MS' big innovation for the new Office: a redesigned interface that many users, at least initially, find confusing and frustrating. It's interesting but not really necessary, and it's inexcusable that there's no mechanism to display menus in a way that users are already used to. With the Google office tools (which admittedly are nowhere near ready to replace MS Office) you get something that really is groundbreaking: the ability for multiple people to edit the same document at the same time.

There's also the difference in how these companies view business and threats. In MS' case, they see a threat in every business sector they don't control outright, and in many they do but where there are still upstarts who can't be bought, bullied, or sued. For companies like Google and others who rely on and develop OSS, competition means better software and improved opportunities for all.

MS isn't going away any time soon and there will always be a place for proprietary software. But increasingly proprietary solutions will be limited to niche professional markets (AutoCAD, ProTools, Premier etc), common applications will move from desktop to server and become platform-agnostic (office suites, email/calendaring, collaboration and versioning), and OSS apps will become increasingly robust and capable for armchair enthusiasts and pros alike (Ardour, GIMP, Cinelerra, My/PostgreSQL, etc).

MS can look for threats wherever it wants and they will find a lot. But the real threat doesn't come from any particular company, sector, or application. It's environmental -- the platform will simply become less and less relevant as time moves on. The real threat is that MS won't see this and won't react in time. It will be the beginning of the end as soon as there is a platform-neutral, drop-in replacement for Office + Outlook + Exchange + Sharepoint. We're not there yet, but the day is fast approaching.

Missing option..

[Ckwop]

Microsoft's biggest enemy, at the moment is its self.

After Vista they proved they've gotten far to large a head count to innovate. Unless they slim down their development team, they're going to go the way IBM did in the early 90s.

Simon.

What did you say?

[bogaboga]

...Meanwhile, the search giant is pushing open source in every way it can....

That statement refers to Google. While I recognize Google's contribution to Open Source by the mentioned means, I would not give it that much credit.

Why is it that Picasa still does not run natively on Linux?

Why is it that one cannot specify ODF as among the file formats available for search, http://www.google.ca/advanced_search?hl=en despite the fact that ODF has been in existence for several years and some estimates put the number of ODF documents on the web in greater numbers as compared to Microsoft's OOXML?

Why is it that new products appear for the closed Windows platform before thet appear for the open Linux platform? They should appear simultaneously. [Emphasis mine].

Kill office to kill MS

[schklerg]

People run windows primarily because of the applications on it. The most significant of these is MS Office. The competitors lack true compatibility with all MS generated files, which makes it tough to go with another office suite, no matter how good it is. I'm an open office fan, but there's some formatting that just doesn't work. Break MS Office dominance with another cross-platform app, be it from Google or anyone else, and you have put a HUGE dent in MS. Not only will the office cash cow lose some weight, but the perceived need for Windows will drop as well.

Re:Kill office to kill MS

[hal9000(jr)]

The competitors lack true compatibility with all MS generated files,

I am glad you said this AND that you got modded up. Office is the app to kill. Make one that is better, works seamlessly with Office docs and you've got a chance. I use Office because I don't have the time or the desire to dick around with formatting issues and alot of companies are on the same playing field.

But let me also add, making an Office killer is not as simple as making a word processor, spread sheet, and presentation app. Office is a *development environment* and many, many companies use the programatic capabilities of Office to build apps that cal pull on different parts of the office suite. Those programmatic features are used by companies, not necessarily consumers and I will posit that company sales drive Office profits more than consumer sales. so I think to reall make a dent, any competing office suite has to either run Office apps/macros/scripts or interpret/convert existing office apps/macros/scripts as well.

Re:Google is OSS

[rucs_hack]

Google, aside from its use of linux (which it could do without supporting FOSS in any other way incidentally, if it wanted to), has no choice but to pally up with FOSS if they want to keep profits up.

FOSS would pose just as big a danger to them as it does to microsoft if they did otherwise.

A tad cynical perhaps, but you can bet if they thought there was more money in closed source than open, they'd go that way.

One more thing, where is the source for gmail? Or google maps (not the API), or many other google projects. If they're so into the foss, why are so many of their 'free' offerings all but proprietary in nature?

ibm, ms and google

[theheadlessrabbit]

I'm waiting for the day when Microsoft begins to wither and die under its own weight, and at the last minute, pulls an IBM, investing heavily in OSS to keep itself going more cost effectively.

Then MS will suddenly become a much loved company around here, 'cause 'round these parts, supporting OSS = /. love

Then, in a need to fill the void left by Microsoft, Google will suddenly become the big bad guy. All of us on Slashdot will be praising Microsoft and hoping they can take down the big evil google.

or we could agree that both of these companies fulfil a certain niche that the other company cannot, and we need them both. one company provides employment for countless nerds due to its buggy software, while the other company helps those nerds find things, (like porn)

They are not in direct competition with each other.

Microsoft's biggest threat is Microsoft.

[ElizabethGreene]

In my humble and unsubstantiated opinion, Microsoft is Microsoft's biggest threat. They have too many products and too many people, and it has made them uncompetitive. If they refocus on their core business, they can come back. Google and other OSS competitors are superfluous.

Microsoft's Products include:
Accounting software (5 distinct huge business packages plus Microsoft Money and a dozen bolt-on applications); Hardware (Mice, Keyboards, Joysticks, cameras, headsets, and game gear); Operating Systems (Servers, workstations, mobile devices, and embedded devices); online services (MSN, Live services, Search, Groups... this is a huge list); database services (Sql Server), Groupware (Exchange), Office Suites (Office, Works), 3 distinct sets of Mapping software, drawing software, desktop publishing software, Reference software, a graphing calculator application, Hardware and software media players, online media services with varying levels of compatibility, tv set top boxes, a dozen different development languages which may or may not be integrated into visual studio.. The list goes on and on,

OSS is one of several competitors offering an alternative for people to switch away from MS products. If oss ceased to exist, some other competitor would arise. That is how a free market works.

-Ellie

p.s. Google, pay attention, you are spreading out too. Diversification is good, but stay good at what makes you great.

Re:Google is OSS

[RAMMS EIN]

``One more thing, where is the source for gmail? Or google maps (not the API), or many other google projects. If they're so into the foss, why are so many of their 'free' offerings all but proprietary in nature?''

All but proprietary? How is Google implementing an appliaction they don't provide source for, but do publish an API for, different from, say, Microsoft implementing something they don't provide source for, but do publish an API for? Wait! I'll tell you how it's different. With Microsoft, you run the software and you store your data. With Google, they run the software and they store your data.

Re:Google is OSS

[FudRucker]

GNUgle?

The money machine which is Microsoft

[westlake]

they're either gaping sinkholes of cash or so marginally profitable that they're unsustainable for anyone not sitting on $50 billion in cash.

Microsoft had a stand-out first quarter.

Each of the company's five business divisions showed double-digit revenue growth.

That was particularly important in the Client Div., the group where Microsoft counts Windows sales. There, revenue jumped 25%, to $4.1 billion, an astonishing gain for a mature market Microsoft Results Turn Heads

Retail sales of Office 2007 have been breathtaking, numbers so big that they are difficult to grasp:

Through end of November, U.S. retail PC software sales are up 10.3 percent year over year as measured in dollar volume...By comparison, Office sales are up 50.7 percent, by the same measure and in the same time frame.

"Here's the really interesting statistic," said...NPD's director of Software Industry Analysis. "Over two-thirds of the dollar volume growth in the U.S. retail PC software market in 2007 can be attributed to Microsoft Office. In other words, the ratio of Office dollar growth to total PC software growth is 67 percent."

The "magnitude of Office sales relative to the rest of the PC software market" is phenomenal, "It's the massively huge tail wagging the dog. If the senior execs at Best Buy, Office Depot, etc. don't buy Jeff Raikes [president of Microsoft's Business division] a beer the next time he's in town, something is seriously wrong." The Year of Office 2007

Microsoft hasn't forgotten the Mac. From the same story:

For Black Friday, Microsoft offered a surprising deal: for about 56 bucks, after rebates, Office 2004 Student and Teacher Edition and the forthcoming Office 2008 Special Media Edition. The new, top-of-the-line Mac Office version would otherwise sell for about $500.

As measured in dollars, U.S. retail Black Friday sales of Mac Office were up 215.8 percent.

Re:Google is OSS

[rucs_hack]

They sell services not software. That doesn't mean they're so retarded to put themselves out of business by giving away source code that competitors could use to setup their own Gmail service and not use Google's.

The whole idea of a service over software model is that the source code can be given away, it's the service that makes the cash.

And no-one would bother setting up another gmail using the gmail source. They'd have to differentiate themselves significantly to appeal to the massed gmail users, or current non gmail users. That wouldn't be trivial.

The point of opening the source is that while others can take it for use in their own things, they can also add to it and google could have those additions back.