Why Google Succeeds?

Google is on track to be the next Microsoft, meaning the dominant company in another realm of computing. Microsoft had better learn from what Google is doing right, and soon, because Google is marching to Internet time and Microsoft isn’t.

This week, some of my colleagues and I have been having debates about Google and its increasing control over information, about privacy issues and about whether or not the company is building a monopoly. In the United States, a monopoly isn’t illegal, only the abuse of a monopoly’s power. The courts have determined that Microsoft acquired its monopoly legally. Is Google building one, too? Probably.

Building a monopoly is the goal of many companies, even if it’s not overtly stated. What company wouldn’t want 80 percent or 90 percent of the market share and all of the associated revenue benefits? But there is big difference between selling the most popular bread and controlling the factories that supply the bread. Google and Microsoft are both platform companies. Platform monopolies can have enormous reach, affecting many other companies, business customers and consumers.

Successful monopolies have so much to lose, whether measured by influence, market share or revenue. Microsoft’s monumental success is the major reason for the company’s competitor paranoia. Microsoft sees how much it has to lose.

Google is a problem Microsoft hasn’t solved and won’t solve without some fundamental organizational changes. Google is doing to Microsoft what Microsoft has done to many of its competitors and Google is doing it with surprising tact and tenacity. There are many dead bodies companies in Microsoft’s closet. Early on, Microsoft learned the importance of controlling standards by wooing software developers and hardware manufacturers into adopting the company’s proprietary technologies as standards. In categories like spreadsheets and word processing, Microsoft bested entrenched competitors when they made tactical mistakes. In the 1990s, competitors often made mistakes when Microsoft shifted standards or the platform. Good exampled of this are the move to DOS and Windows or Windows 3.11 to Windows 95.

In a role reversal, shifting standards also push Microsoft against the ropes. Developer interest in the Web platform—and the promise of information access anytime, anywhere and on anything—shifts standards away from Microsoft’s dominant platforms. Meanwhile, Google is establishing an informational platform, while gaining great success in search, contextual search and advertising. Google expertly executes, while Microsoft, like a vanquished rival, continues making repeated mistakes.

Actually, Microsoft has been screwing up for years, but the powerful currents of its monopoly have carried the company past its foibles. No more. Microsoft isn’t going to fold up and disappear, but its relevance is at a risk. The reasons for Google’s success are much bigger than Microsoft’s failures. They are:

Microsoft Is the New IBM
Today, Google is to Microsoft what Microsoft was to IBM in the early 1980s. IBM defined computing with its mainframe monopoly and by besting the U.S. government in about 40 antitrust-related cases. IBM entered the PC market without trepidation, because personal computers were so different from mainframes. They didn’t compete.

Ah, but they did compete. The PC extended computational and information utility to more people, and at much lower cost. Information could be accessed in many more places, too.

IBM had huge built-up infrastructure—namely its huge organization and enormous customer base. IBM’s success made the company cautious and slow-moving, presumably, in part, because many decisions were made for fear of losing customers.

By contrast, Microsoft had little to lose. The young company had little infrastructure or customer base and could take bold chances. Microsoft took risks that grew its customer base, some of it taken from IBM. Microsoft had lots of help from Compaq and other companies selling IBM PC clones. The mainframe was a platform—and one tightly controlled. Surely, Microsoft co-founder Bill Gates recognized the importance of building a platform. The platform could have been the PC hardware, but Microsoft’s approach to software licensing, publishing APIs and creating means by which third parties could make money assured that software would be the platform.

Two-and-a-half decades later, Microsoft looks a whole lot like IBM did in 1980. Microsoft employs nearly 80,000 people, and its work force continues to grow. Most companies in the world use Microsoft products, which is a bit of a problem. Microsoft’s main business is about reselling to the same customers, much the same as IBM did 25 years ago. Microsoft’s huge customer base and resulting concessions to them, such as ensuring backward compatibility and focusing on corporate markets first, make the company somewhat adverse to risk.

Similarly, the Microsoft computing platform looks more like the mainframe when compared to the Web platform (aka Web 2.0). The Web platform already extends computational and informational utility to more people and places at lower costs (at least when supported by banner and contextual search advertising). Using a Web browser on devices ranging from PCs to cell phones, users can access their data anytime and anywhere.

Google is riding the coattails of the Web platform in much the same way Microsoft did with the PC. Google is a younger company, with fewer customers, less infrastructure and less to lose. Google is nimble where Microsoft is stiff and, as a result, more likely to take risks. If Google and the Web platform supporting it succeed, development relevance will permanently shift from the desktop to the Web. IBM didn’t go away, nor did its mainframe monopoly. Likewise, Microsoft won’t go away, nor will its monopoly. But relevance will change, as the platform with greater development support and business and consumer interest shifts elsewhere.

Simpler User Interface
Shifting relevance isn’t Google’s only market advantage.

Google provides perhaps one of the best user interfaces, because complexity is hidden from the end user. Google search is like a command line for the Internet. People type keywords and Google algorithms and server software do most of the heavy work. There are no multi-step processes or Wizards to work through.

This approach permeates Google design, and there is some necessity for it. Desktop software is more self-contained, whereas more of Web applications’ computational and informational functions pull from the server. Desktop application user interfaces tend to be more complex and confusing than those consumed in browsers or small utilities like widgets.

Something else: Technologies like AJAX (Asynchronous JavaScript and XML), while delivering a more desktop-like experience, constrain what developers can do in the browser. The limitation has an enormous side benefit: simpler, task-based user interfaces. The server-side computing nature of the Web and the development limitations together remove tremendous complexity from many Web applications compared with their desktop counterparts.

The combination is intoxicating: The Internet is where people go to get information, socialize or seek entertainment; the user interfaces are simpler and more consistent—even across products or services; and different services connect together because of published APIs. The processes are complex, but the user interfaces are fairly simple.

Who is the lead developer releasing APIs and providing development tools promoting the Web platform? Google.

By: http://www.microsoft-watch.com/content/web_services_browser/why_google_succeeds_part_1.html


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