Google-Microsoft rivalry comes down to clouds or software

Google doesn't need to be evil. It wins wherever the playing field is level. As the volume of online computing goes up, costs tell.

Microsoft's release of Office 2010, and its free online version, has a lot of people comparing Google Docs to Office, and then Google's cloud to Microsoft's.

(Image from the Radical Marketing Blog, via Matt Asay at CNET.)

Well, Docs is not  Office. Switching costs for old files are still too high for most businesses to consider leaving.

If they're not leaving for a free Open that supports Microsoft's file formats (and so far they're not) then they're not going online to do it the Google way, either.

But office suites aside (why doesn't Google take over sponsorship of OpenOffice from Oracle's Sun division and put that in its cloud) what some are calling Google's cloud bravado is not that at all.

It's not bragging if you can back it up. In terms of the basic mechanics of running a cloud, of delivering compute services at the lowest possible cost, Google is light years ahead of Microsoft and everyone else.

Because Google invested in dark fiber early last decade, because Google emphasized low-cost PCs on its server farms, because Google takes energy costs seriously, Google now has a better Internet core than AT&T and Verizon, than Microsoft, IBM or anyone else.

I don't know what the exact figures are, but I suspect Google can deliver any computer-related transaction -- file creation, collaboration, search, connectivity -- for an order of magnitude less than any rival pays.

No one seems to get this. No one seems to understand that there is a big difference between .000001 cent and .0000001 cent, that the second figure is one-tenth the first, even though both numbers are really, really small.

That's why Google doesn't need to be evil. It wins wherever the playing field is level. As the volume of online computing goes up, costs tell.

It's true Microsoft retains an advantage in office software, built over 25 years, the habits of many career lifetimes.

By extending Office from basic functions like word processing and spreadsheets into more esoteric areas, starting with PowerPoint but moving then into SharePoint, ActiveX, Dot NET, COM add-ons, and Visual Basic applications (among others) Microsoft has developed as wide a lead in its area as Google has in its.

The question is which is more powerful, the computing environment or the cloud itself. That's the state of play. It's not "who has the best cloud." Google does. It's not "who has the best applications." Microsoft does.

It's which is more important, software or infrastructure. My view is that software is the shorter-term edge.


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