Thursday, July 23, 2009

Rossifer Lays Out Google's Strategy -- Must Read!!!

Image representing Google as depicted in Crunc...Image via CrunchBase
In a Slashdot story on Google Wave, Rossifer commented on Google's business strategy. He claims to work at Google, making the post extremely iformative, but this is the Intarweb so the post could merely be amazingly insightful. Either way, it's something that needs to be read enough that I included it in this blog despite the post not being about Ubuntu, Debian, or anything remotely related to them.

What you're not seeing is Google's strategic intent (I work for Google, but this stuff is public).

Google's goal is to commodify (reduce the marginal profit to zero) of everything that they don't make money on. The hardware is pretty much commodified already. Plenty of competitors and the profit margins are razor thin. Next levels are the OS and the applications. These are not yet commodified due to Microsoft's aggressively maintained monopoly. Contrary to common knowledge, Microsoft's real monopoly is in the Office file formats. From that, they've levered a monopoly into basic individual productivity applications and then (with Apple's cooperation) the operating system. They are also a serious player in second-generation collaboration tools (extensions to basic email).

In order to reduce Microsoft's war chest and eliminate their competitiveness, Google seeks to lower the profit margin on everything Microsoft currently produces at a profit (Windows and Office). So they produce a cheaper operating system, cheaper productivity applications, and cheaper collaboration tools (ideally free to the typical user). Google doesn't need to make money (though breaking even would be nice), Google just needs to apply pressure to Microsoft to cut their revenues/profits and the strategic goals are being met.

Writing apps that run on Windows? Doesn't help Google very much (though SketchUp and Picasa and a few other things are native apps).
Writing protocols that run on any machine? Helps Google a lot.
Writing web applications that use those protocols and run on any machine? Helps Google a lot.

Look at the bigger picture. Google is acting extremely rationally here.
As for whether Wave is innovative or not, I don't think you've tried it and are speaking without informing yourself. Wave is to email as email is to snail mail (single addressee, no broadcast, etc.). Wave tackles the problem of a widely CC:'d email with an attached Word or Excel document (two threads of changes: one in the email thread, one in the document) (multiple obsolete copies of the document available) (possible confusion and delay as people are added to the thread and have to re-read the history duplicated in most of the recent emails). Wave creates a "place" for this discussion/collaborative authoring to happen and then let's everyone bring whatever they want to help out. Wave is not email++ (which is what Outlook and Gmail are).

Reblog this post [with Zemanta]

1 comment:

  1. Thanks for putting this up. I'd have missed this post had you not.


Other I' Been to Ubuntu Stories

Related Posts with Thumbnails