

Google's search business to be bigger than Windows - JohnN
http://www.alleyinsider.com/2008/5/google_to_surpass_size_of_microsoft_windows_in_2009

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mattmaroon
Just because something is bigger than Windows doesn't mean MS should compete.
The automotive industry is probably bigger than Windows. Maybe they should
start making cars?

~~~
mixmax
The difference is that the automative industry won't undermine Microsofts
businessmodel , but Google might.

If they look a few years down the line they should definitely compete against
Google.

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mattmaroon
That too seems to be mere speculation with no evidence or even sound reasoning
supporting it. Nobody has yet presented a compelling picture of how search
will stop MS from selling copies of Windows. It's no more accurate to say
Google could compete in the OS space than it is to say MS could in search.

And don't even get me started on Office.

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breck
I agree. Especially about Office. I can't believe Alley Insider called
GoogleDocs a direct competitor to Office. I see how Google Docs competes with
Microsoft for the market of people that prefer to make spreadsheets and
documents with 90's era tools, but for users who care about their work Office
is much more powerful. The only cool thing about Google Docs is that it allows
you to easily share lousy documents and spreadsheets with your friends.

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kijiki
There is a book you might find illuminating:
[http://www.amazon.com/Innovators-Dilemma-Revolutionary-
Busin...](http://www.amazon.com/Innovators-Dilemma-Revolutionary-Business-
Essentials/dp/0060521996) also, the essay "worse is better".

~~~
breck
I understand your point, but I think it is much easier for Microsoft to add
better online collaboration to Office than for Google to add the extremely
robust and powerful features of Excel to GoogleDocs. I think there is a market
for GoogleDocs, but I don't think it's going to cut into Office's $$.
GoogleDocs doesn't offer anything that Office '98 did besides online
collaboration. I don't think many people would give up the office suite for
GD, and as I said before--Microsoft has the hard part done--online collab is a
lot easier.

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bluelu
Google's search business might be bigger than Windows, but let's not forget
that the way we access the internet could change as well. A new protocol for
accessing/finding information (no webservers anymore) could put google out of
business and they would have to start at 0 as others would also.

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diego
How is search a natural monopoly? Switching search engines is much easier than
switching operating systems. I do it all the time. In fact, every day I type
queries into many search boxes besides Google's.

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bdouglas
is it google's search business that's bigger, or the ad portion?

just how is bigger really defined?

the search business per se, doesn't really generate revenue in the same
category as the ad portion.

if we're really talking about the revenue from the ad portion, then you need
to consider what might throw a wrench in the advertising model being run by
google. i can easily imagine a few that could have serious implications of the
cash cow that's the google ad engine..

so just what is meant by "being bigger than microsoft"???

peace

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edw519
Microsoft doesn't want to make the same mistake IBM did.

IBM enjoyed 70% market share in the enterprise for 30 years. They thought it
would last forever. Until the PC came along. But they didn't take it seriously
and look what happened.

Microsoft knows as well as anyone that the days of thick clients and
proprietary software are numbered. So they'll milk that cow as long as they
can.

No one knows for sure what's going to happen, but with thick pipes, thin
clients, open source software, and the upheaval of the "enterprise", I'd be
planting new seeds, too.

~~~
bilbo0s
IBM is a sleeper company, which is what microsoft is becoming, which is where
the majority of the wealth in this nation is at. I have read the old articles
from the 80's and 90's that said that Microsoft would supplant IBM. It is now
2008, and Microsoft generates about US$12B a quarter where IBM is doing right
around US$24B a quarter. In other words we are still waiting. IBM made a
decision to GIVE microsoft a market. The decision was all the more easy as
Mrs. Gates, mom to Bill, was EDIT:(a high level executive at IBM) - on the
same boards as the CEO and other board members of IBM - at the time.

My point in all this is that companies, the large ones, the ones that write
the US$250M per annum IT checks, buy what IBM tells them to buy. IBM told them
to buy Microsoft for a while, because writing that software themselves was a
pain. Now IBM will look around for a cloud vendor to be their go to guy for
cloud deployments. It is too early to say what this relationship will look
like, but it is a certainty that whoever gets the IBM guys out pushing them,
will be the enterprise monopoly in the future.

This is a SLIGHT oversimplification of the enterprise purchasing process for
large organizations, but it gets at the fundamentals. And in any case, the
negation is likely and sufficient to cause GOOG and MSFT trouble. That is, if
IBM says NOT to buy Google or Microsoft cloud services, then they are non
starters.

If you want to bet on a company that will ride the next enterprise upgrade
wave, put your money on IBM. This is the only constant in the global
enterprise IT market.

It is way to difficult to figure out whether Google can come up with a product
that any large enterprise would want to use. That is, can they really
innovate? I think open minded analysts agree that the jury is still out on
that one. Equally vexing is the question of whether Microsoft can get their
heads out of their butts long enough to create a product that conforms to the
next computing paradigm? The only certainty is that whatever happens IBM will
be supporting it, and THAT is where the money is. All US$100B a year worth!

And that is only likely to grow!

~~~
edw519
Mary Maxwell Gates was never an IBM employee. She was on United Way's
executive committee at the same time as then IBM CEO John Akers. Their casual
conversation led to IBM's introduction to Microsoft.

IBM never meant to give anything to anyone. They were as ruthless then as
Microsoft is now. IBM, along with most of the rest of the enterprise world,
never imagined the microcomputer as anything but a toy. They didn't even enter
the market until 6 years after Apple.

In 1980, IBM was a hardware company. Today they are a service company. The
makeovers in between were not painless and were not by choice. Just for not
taking the PC seriously.

In 1980, you were as likely to find a job in a Fortune 500 company as anywhere
else. Not anymore. New jobs are being created at a much faster rate by
smaller, more nimble companies. After all, economies of scale don't mean as
much in service economies. These smaller companies don't have the same
decision making matrix as the enterprises and will use SaaS. Look at
Salesforce.com.

~~~
bilbo0s
Good point on Mary Gates, though my material point was that only Bill Gates
was going to get the contract. Any one else would have faced significant
challenges. Also, given the fact that Bill was in his early twenties at the
time, I suspect, and I think you do too, that those conversations were
anything but casual.

Additionally, IBM has been a services company for over a hundred years. With
the greatest service rendered at the Nuremberg trials in my opinion. Hardware
has been a way for them to sell services for quite some time. That said, a
review of their historical financials, will bear out the fact that they have
made far more money on service and support than hardware. That is true if you
zoom in per year as well by the way. The computer industry emerged around the
1950s, and IBM was the guy selling the most of them, it's true. But, take a
look into their training, service and support contracts if you want to see
some serious revenue growth charts.

As to your last point, it is the same point made by Microsoft fanboys in the
80s. It is, in a way, the original 'long tail' argument. It has merit, in that
companies that can monopolize the long tail, as Microsoft has done, will make
a lot of money. But the fact remains that even with its 'long tail'
monopolization, Microsoft still generates less revenue than IBM. FAR less.
Why? Because the smaller companies are not willing to pay as much as larger
organizations. Which is why they choose Microsoft, it is cheaper, and it is
good enough.

Now your assertion is that they will choose Google in the future, because it
will be cheaper still, and good enough.

Consider, however, what happens as these customers get more and more frugal.
Suppose everyone on the long tail thinks that your product should not cost as
much as Microsoft's. Or let's suppose that they believe that everything you
get over the internet should be ... say ... free. The amount of money that the
monopolizer can generate goes down. But IBM's service and support contracts
stay the same price for the big guys! That's the beauty of being IBM. You
always win in the end.

