Amid the fuss about competition between Microsoft and Google, it is easy to forget what sets them apart. Sometimes they seem to forget the differences themselves. That is dangerous: as Microsoft takes the next step in trying to export its personal computer-era dominance to the internet and Google races to take advantage of its search engine’s early success, both must watch where they are heading.
At heart, Microsoft is a platform software company – though Bill Gates, chairman, and Steve Ballmer, chief executive, sometimes seem unwilling to accept such limitations. Mr Ballmer said last month: “The core soul of our upbringing is really in doing great end-user experiences.” Try telling that to anyone who has marvelled at the ineptitude of its consumer software compared with the slick work of a Google, Apple or TiVo.
Rather, software “plumbing” is where Microsoft has made its mark. The Windows operating system, and the tools independent developers use to create programs to run on it, have made it the de facto standard for personal computing. Microsoft has spent six years trying to extend its platform to the internet, through a strategy dubbed .Net (pronounced “dotnet”) – technology “glue” that will bind PCs, servers and all the other computing devices connected over the internet into a coherent whole. To give Mr Ballmer his due, he concedes that building a software platform for the web remains Microsoft’s “number one investment area”.
Google is different. As a consumer services company and a digital-age advertising concern, its early success clearly stems from “great end-user experiences”. It has built one of the world’s most powerful computing bases, but this is largely a closed system, constructed to deliver an ever-widening array of Google services to Google consumers.
Yet sometimes it looks as though Google is trying to become the next Microsoft. Today, software developers will descend on Google’s headquarters to discuss ways of building applications on top of the Google Maps service. Known as “mash-ups”, these are the latest trendy idea in Silicon Valley, a way to assemble online applications out of piece-parts of other services. Meanwhile, Google last week released a test version of an online spreadsheet, the latest in a series of products that look like web-based versions of Microsoft’s Office suite of applications. At least Eric Schmidt, Google’s chief executive, seems aware of the risks of rushing into new areas. Last month he turned Google’s development effort back more towards its search engine: to lose sight of that would be to risk dissipating the company’s early lead.
To some extent, the growing overlaps are understandable. Consumer internet companies such as Google can profit from limited platform-like strategies. Take Ebay, which started down this road in 2000, before most others: some 30,000 independent developers now write software that runs on top of its site, creating new ways for sellers to list their goods on Ebay and for buyers to search for its products from other websites. This sort of limited platform approach could extend the reach of Google’s services. That is different, though, from the sort of all-purpose internet platform Microsoft is trying to build. At the same time, it helps platform companies such as Microsoft if they can create successful applications or services to run on top of the computing foundations they are laying. The symbiotic relationship between the Office suite of software applications and the Windows PC operating system lay at the heart of Microsoft’s success in the 1990s. However, as the name suggests, Office is mainly a tool for workers, and Microsoft has shown little aptitude as a true consumer services company.
As advertising becomes a more significant way to profit from internet audiences, and as search becomes a core part of online behaviour, Microsoft has no choice but to build its own algorithmic search engine and online advertising network. These are important parts of the future platform on which online businesses will seek to draw. Whatever Mr Ballmer says, though, it is unlikely to be Microsoft that creates the most successful consumer interfaces for these services.
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