Monday, June 05, 2006


Google-Microsoft's Collision Course

Most observers and analysts expect Google and Microsoft to compete directly more and more as the software industry evolves from software-as-products to software-as-services.

The so-called leaked Gates/Ozzie memos clearly hinted at this eventuality. The latest move is Google's announcement to offer a web-based spreadsheet application. Google already offers a word processing application through its acquisition of Writely. What does this mean for Microsoft when it introduces Office 2007? If you are an analyst, you track the rate of upgrade from prior versions and the distribution of such upgrades across different sectors and across different regions in the world. That will give a strong indication of the impact of the shift from software-as-products to software-as-services. Other early-indicators are the degree of use of Windows Live and Office Live as compared with Google's applications.

So, what next? May be it is no longer about the market share of applications such as Word and Excel--which made sense when software was a product. May be it is about the click-through advertising when users rely on word processing, spreadsheet and presentation applications. If so, then it also has important implications for companies such as IDC who track market share data in the software industry when software functioned as products. I wonder if these companies have the requisite competence to track patterns of click through advertising when people use different applications or do they suddenly face competitive threat themselves from Google and Microsoft--who have this data as part of their service offerings?

Update: It looks like Google is particularly focused on the shared application idea--further bolstering the importance of networks. Take a look at this from AP.

To avoid swamping the company's computers, Google's spreadsheet initially will be distributed to a limited audience. Google also wants more time to smooth out any possible kinks and develop more features, said Jonathan Rochelle, the product manager of the new application.

The Mountain View, Calif.-based company planned to begin accepting sign-ups for the spreadsheet at 9 a.m. EDT Tuesday through the "labs" section of its Web site. Rochelle wouldn't specify how many people will be granted access to the spreadsheet application.

Google's spreadsheet isn't as sophisticated as Excel. For instance, the Google spreadsheet won't create charts or provide a menu of controls that can be summoned by clicking on a computer mouse's right-hand button.

Rochelle said the program's main goal is to make it easier for family, friends or co-workers to gain access to the same spreadsheet from different computers at different times, enabling a group of authorized users to add and edit data without having to e-mail attachments back and forth.

"We are totally focused on the sharing aspect," he said.

So does it mean Google gets the network era? Perhaps, Yes!

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