What Google is really up to

What Google is really up to

Summary: The key to understanding what Google is up to will be found by looking at Google's own business. Its horizons are much broader than what happens on the desktop.

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TOPICS: Google
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I think the stock market's reaction to yesterday's Google-Sun announcement gets it about right: Google down $7, Sun up a penny. As many bloggers have already opined, (and as I had feared it would be), it was all a bit of a disappointment. Maybe Sun will benefit from this link-up, but it's hard to see what added value it's going to bring to Google. Sun's track record in on-demand applications and services is well documented, and it doesn't look good.

The worry is that CEO Eric Schmidt is about to draw Google into the kind of anti-Microsoft obsession that in the past has dragged down both his previous employers, Novell and Sun. But perhaps that's exactly what Google wants us to think, says Microsoft watcher Joe Wilcox. As noted by Dan Farber yesterday, he believes the tie-up with Sun is simply a tactical PR move to turn the tables on Microsoft (down 52c yesterday):

"[Google] can ... cause Microsoft to waste resources, be distracted chasing Google, while the rival executes brilliantly where the Redmond folks aren't looking."

This certainly makes a lot more sense to me, and it squares with the emerging story that the alliance was first suggested by Sun's engineering team and then taken up by top management.

But nothing has justified the frenzy of expectation these past few weeks that Google was about to deliver the knock-out blow either to Microsoft's dominance of the desktop PC market or to the entire telecoms industry's dominance of, well, telecoms.

The key to understanding what Google is up to will be found by looking at Google's business, not at its competitors'. There is no doubt in my mind that Google (or some other Web 2.0 company if Google messes up) will one day be bigger than Microsoft. But it won't be by seizing Microsoft's own markets, just as Microsoft grew bigger than IBM without getting into the mainframe business. All the ballyhoo about bolstering OpenOffice against Microsoft Office is just a distraction. Google's horizons are much broader and the real battle won't be fought over desktop applications as we know them. Some people will still use Office in twenty years' time, just as some people today still ride on railroads or canals. Superceded technology never disappears, it just declines into obscurity.

As everybody knows, the core of Google's business is search — or more accurately, not the act of searching itself but the search results that come back: what used to be called information retrieval. Google's business model revolves around helping people find better answers faster.

To do that it needs to embed its search and retrieval technology ever more tightly into each user's individual information processing. Yes, of course that means being present on the desktop, but even more so on the palmtop, the cellphone and wherever else web access is taking place.

Teaming up with Sun wins a lot of PR, gets Microsoft to waste cycles on competitive analysis, and puts Google on a few more desktops via Java runtime downloads. That's enough of a win to make the alliance worthwhile, but the real action is happening elsewhere:

  • exploring the viability of funding city-center Wi-Fi services with location-based advertising
  • buying up fiber to cut vital milliseconds off the time it takes to analyse the user's environment and deliver appropriate contextual information
  • researching client technologies that can help cache code and information locally to reduce download waits and continue to service users during those moments when they're disconnected
  • getting ready, as Adam Bosworth mentioned in his presentation at Dreamforce the other week, for the moment when "mobile VoIP phones suddenly become pervasive."

All the time, Google will, to borrow Bosworth's phrase again, 'run like mad' , not to deliver a rehashed version of yesterday's applications or devices, but to react intelligently to newly emerging user needs.

Topic: Google

Phil Wainewright

About Phil Wainewright

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant.

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5 comments
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  • So it's back to enterprise search for Google?

    As I recall, Google first attempt at this market was not very successful. Bill Gates was very cognizant of that fact in a recent ZDNet interview.

    Google is in business to gain profits. That means they have to sell something.
    Though search is ad-supported, an office suite, for instance, paid by ads is likely to be unpopular. See Opera browser, for example.

    When you look at a proposed strategy, the first question is, are they selling into a market in which they can be dominant? Wall Street likes companies that are first or second in every category in which they participate.

    The second question is, will this market produce large and growing profits almost immediately? Anything else has to be justified by proof of inevitable growth or it's a self-indulgence by management.


    A compliment on your observation:
    The worry is that CEO Eric Schmidt is about to draw Google into the kind of anti-Microsoft obsession that in the past has dragged down both his previous employers, Novell and Sun.

    Very true.
    Your corollary, that Google is causing Microsoft to misfire by an obsession with them, seems a real stretch.

    Microsoft could pay 100 people to worry about Google and not notice the expense.

    The company is reaching the end of its anti-trust monitoring phase, and the trial itself took a lot of attention.

    If they can weather that storm as well as they did, concern about Google is not necessarily damaging.


    And a disagreement with this quote:
    Some people will still use Office in twenty years' time, just as some people today still ride on railroads or canals.

    Who knows what the version of Office that will dominate productivity software in 20 years will look like?
    Is Microsoft supposed to stand still and wait to be displaced?

    No, there will be courses in the history of Unix and the history of Microsoft in 20 years. The difference is, the Unix course will be an academic class taught in the history department, while the Microsoft course is taught as part of education for a career.

    If you can do it...
    Anton Philidor
  • Gooogaga Time Warner is Hiring IPO's

    These new old guys they brought in to run the IPO have finnally showed their hand. Data search is a product that values a humanservice; should we not redefine public service like everythingelse. I am so sick that the technology companies have bundled and space aged our world but; at the end of the day it is all about an 87-95% margin of profit thus (hidden) PE ratio 23-44 and earnings of well though not the old days of a file clerk, $1.25....Redefine the determining needs of the global community to go the other way and we may all survive even though we are turning Chinese to do yhis. With a jewish terrorism court ofcourse.
    Pop 3
  • Meaningless Comments

    I remember when MS Word was a DOS product and there was no EXCEL for Windows, in other Words before there was an "Office" suite. Microsoft surged to the front during one of the major innovations in the office software market place (bundling software in suites). Perhaps in some future innovation in this market place someone will surge past Microsoft. The dullest minds realize that "Office" in its present form will be superceded. In fact, Microsoft is depending on this outcome as much as any competitor. So the statements about about the future of "Office" are just meaningless comments. I wonder why apparently intelligent people who get paid to think and write about these topics, intersperse such obviously "meaningless comments" in their commentary.
    rudygood
  • I disagreed on Google's Business Model

    I agreed to many points in your article, but I totally disagreed on Google's Business Model. Up to now, Google's ONLY business model is Ad's, periods. They have a side/small business of selling of a search applicance but the revenue of that isn't significant enough to even talk about.

    With the biz model of 'Ad' (or getting eyeballs and getting people to click on them), the ONLY way to survive/grow is to attach more and more people to their 'sites'. Hence, everything that they wanted to do would be 'web based' where they can control/track those ad's more easily. Looked at all their 'product' - GMail, Search, 'Chat', Blog, etc.

    Personally, I still believed that it is not a 'long term' biz model.
    JJ_z
  • Fascinating

    I actually wrote a blog post with the exact same title on my blog in which I speculate that Google is a knowledge machine and some more things on top of that.

    What a fascinating company.

    Here is my version of 'What is Google really up to?'

    http://www.flexewebs.com/95.html

    Thanks,

    Jason Grant
    Director
    www.flexewebs.com
    flexewebs