Microsoft Doesn't Suck!

I know this isn't what blogs are supposed to do, but it's the best outlet I have right now to express opinions. For the good old days when I had a magazine in which to write opinion columns and start debates...  I still hope to continue the debates, these days over the changes that Google brings. If any of you disagree with my opinions, please contribute! Your site or mine. I love the abuse.

Curt Monash of the Monash Report was kind enough to defend my integrity against accusations of being a shill for Google, since we've worked together before. But he does note that I haven't refuted the claim that Microsoft can change its ways given time. That's because I don't refute the claim. I just think Microsoft will end up number two in internet-based applications behind Google.

Microsoft is an extremely smart company, and Steve Ballmer doesn't get enough credit for his brilliance at running a technology company. Microsoft doesn't suck, and it has made it clear that it is taking on the Google challenge whole-heartedly. I'll also confess that I admire few people as much as I admire Bill Gates.

Microsoft faces an unprecedented challenge.

But Microsoft has an enormous challenge ahead. As I said before, Google is a new kind of company, one focused entirely on internet applications, with the brainpower, the cash, and the technology to dominate. It has a revenue model that is a serious challenge to Microsoft. Microsoft has grown rich from selling boxes of software at several hundred dollars apiece, and it must now figure out how to provide free software based on advertising. That creates a huge disruption. Microsoft has never faced a challenge that requires it to move to a completely new business model. Before it can make money from that model, it has to figure out how to sell ads profitably.

Microsoft has lost some of its old advantage

Microsoft has always had an advantage from its control of the desktop OS. It will still have that advantage, but it's not as all-encompassing as it used to be. Google does not rely on Microsoft's OS, as all other desktop apps companies have had to do. And the restrictions put on it from well-meaning but incompetent government regulators means it has to tread carefully.

When Dell Computer announced a deal in which it would pre-install Google programs on up to 100 million PCs, the computer world changed. Dell's success was due, in part, to the fact that it acknowledged the power of Microsoft and never did anything to fight Microsoft. Microsoft told Dell how to configure software and Dell did it with a smile. It got the best prices from Microsofft for that smile. Microsoft's biggest ally has defected. True, Google is apparently paying up to a billion bucks for the privilege, but it can afford it.

And now Microsoft's Brad Smith has made it clear that Microsoft will go easier on other developers, making it easier for PC makers to default to non-Microsoft programs. Microsoft promises to make APIs more open to third-party software developers, theoretically making it easier to create competing apps. Dan Farber at ZDNet has a good list of Microsoft's promises and what they mean.

It's very smart of Microsoft to do this. Its old tactics will not work in the new world, and its new principles indicate Microsoft is backing away from those tactics like a trainer whose attack dog has shifted loyalties. Dropping that crutch will make Microsoft more competitive. But again, that is a big shift in strategy for Microsoft, which had grown somewhat lazy because of the protection its attack OS had offered.

Microsoft has to become a better innovator

Microsoft has also shown that it can develop software along with the best of them--as long as someone shows it the way first. Other companies create a new program, Microsoft creates a competitor that's just as good, and people switch. But don't forget that Microsoft's competitors have then usually chewed off their own legs to get away from the Microsoft threat. They have neglected to keep improving their software, favoring instead to fight Microsoft in the courts, with government regulators, and even to "punish" Microsoft by putting resources into programs for non-Microsoft OS's that never had a chance in heaven or hell. Microsoft then easily overtakes its three-legged competitors.

One company that never fell into that trap is Inuit. It kept its focus on easy-to-use financial software, and Microsoft never caught up. Business Week points out how Intuit has managed to maintain a 74% market share against Microsoft.

Micrrosoft has to learn the meaning of 'ease of use'

And that's where Microsoft ends up as number two. Google is brilliant at making easy-to-use products, which the software industry desperately needs right now. Yes, Microsoft has 'entry-level' products such as Microsoft Write, but they're hobbled, designed (puroposely or not) to get you to want to upgrade to more costly products. The argument that Google's products are not powerful enough just doesn't wash. It never worked against Microsoft's early products. Ease of use is a bigger advantage to Google than most people acknowledge.

Google has passion

 

Google shows every sign that it will continue to improve its products, innovate with new ideas, and (like Microsoft) imitate other good ideas and bring them into the fold. Google is passionate about the power of the internet, while Microsoft is struggling to make the transition because it has to. So far, Microsoft is in a permanent defensive position against Google. That never creates a leader. It just creates a contender.

Comments

[Sqeaky]

I agree with you on most points. However, I feel that I must point out that everyone who has underestimated Microsoft in the past has lost. They still have a monopoly and have shown that they can leverage that monopoly in the past. If they include an ad-blocker, a new javascript engine, or some other `enhancement` that breaks adwords they could cut off Google`s revenue at the cost of another anti-trust suit. Forcing google to fight on their terms if even for a brief period. Google Needs to diversify its products, and is doing so with google Earth(they licensed it to Fox news :) ), Checkout, and a few other projects. Google needs to be ready, if they show that they have enough revenue sources, MS may not do this, because it would not be worth it if Google doesn't go away for good. However if Microsoft detects weakness, then you better believe they will strike.

[Professor CS]

I think the big problem here is
that everyone thinks that MS is
google's main competitor. Instead,
it is really all the old style
advertising companies. Increasingly,
their model of print and TV/radio
ads will go the way of the dodo
while google does a better job
of figuring out whom to advertise
what to. The beautiful thing for
google is that MS is a great smoke
screen -- while the ad giants
sleep, their (rather large) business will be stolen out from
under them...

[Richard Brandt]

Fair enough. The two comments above balance themselves out. I see Microsoft as the main competitor because I do not want to underestimate the company. Existing advertisers should know what's hitting them but don't. The only significant growth area in advertising is now RELEVANCY. And that includes a pledge to be honest about the ads, such as never giving higher preference to an advertiser that is willing to pay more. The only preference should be given to the most relevant ads. It's an amazing strength of will that Google displays, alone among advertising agencies as far as I can see. Yahoo doesn't get it.

[Curt Monash]

For some reason my trackback isn't working, but anyhow I commented at http://www.monashreport.com/2006/07/21/google-vs-microsoft/
The main point I raised is: What exactly is Google's sustainable advantage? The answer to that is less than obvious.

[Piyush Pant]

Curt I commented on your question here
http://unhandledx.blogspot.com/2006/07/what-is-googles-sustainable-advantage.html#links

[Google Sucks]

Google sucks. See above for details.

[Google Sucks]

Er, I meant, see below.

[No, Microsoft Does Suck]

Your wrong. MS does suck. So Says Scobleizer, So Say We All!

http://scobleizer.com/2007/03/16/microsoft-tells-mvps-were-in-it-to-win-really/

Try a Mac or Ubuntu. More Function, More Fun, Less Expensive.

[S]

The problem is that Google's products other than the basic search are just not very good. Google Finance, gmail, Google News etc etc are all mediocre products at best. While Microsoft does not (yet) do a good job with web apps eventually they will get it. Personally I hope Yahoo gets it and manages to monetize all the prime web properties they have