Wondering what is up with Google and Dell
Wall Street seems to hate the notion of Google paying Dell one billion dollars (cue the Dr. Evil music) to include something Google-ish on its PCs. Henry Blodgett thinks Google will scare off increasingly skittish Google-vestors if it appears the cool kids now have to buy distribution. Blodgett and other finance-oriented bloggers are all basing their dire predicitions on the supposition that this potential deal is about bundling the Google Pack on new Dell PCs.
Leave it to tech bloggers to come up with a different and far more fascinating scenario. Remember back in 2005 when Google and Sun started playing nice with each other? The blogs went all incendiary about a "Google Office". But the flames died down quickly when it appeared that no such offering was forthcoming. The chat, it appeared at the time, was about the Google Toolbar and playing nicely with each other.
Fast forward to February 2006 and read what fellow ZDNet blogger Russell Shaw is predicting about the company in the shadows in this deal: Sun Microsystems.
Google and Sun are two of Microsoft's major competitors. The enemy of my enemy is my friend.
Sun's low cost StarOffice suite is configurable and scalable- and could easily be accomnodated to handle Google features.
Venture capitalist John Doerr is on the board of Google, Inc., as well as on the board of Sun Microsystems. He has the power to push such a deal thru if he cares to.
Microsoft CEO Steve Ballmer would absolutely go bonkers, but Dell is in such a pre-eminent position, they are beyond bullying by Microsoft. Microsoft needs Dell more than Dell needs them.
Russell points to Rich Tehrani of TMC.net as reinforcement for this prediction. Rich wrote this yesterday:
It would seem that if this agreement is really going to happen then Google has something radically new up its sleeve. Perhaps a browser, perhaps a Microsoft Office killer. Something software-based and something customers aren’t likely to download. The goal would be to get the customers before they get hooked on something else.
In my mind that leaves the browser and Office and possibly a media player. Or is the company selling a Linux operating system and applications?
If Google is launching software in the office market then Microsoft’s crown jewel in MS Office will be in jeopardy of losing share.
Are we, in fact, hearing the first rumblings of a looming Office War? It sounds plausible. Microsoft is readying a major new release of Office - one that features a radically revamped UI and new file formats that will mandate expensive and potentially painful switching costs. Based on the relatively slow uptake on Office 2003 since its introduction, there's ample evidence to suggest that increasing complexity and cost are big concerns for current MS Office users.
And there's the "default factor". Many home and small business PC users tend to go with what they get with their new PC. If a new Dell PC were to include a functional Office alternative already installed, how many seats do you think Microsoft might lose from new buyers deciding that adding on a Microsoft Office license at a cost equal to a major chunk of their new hardware purchase just doesn't make sense?
While I am the first to admit that some of Google's recent offerings have been less than breathtaking (I'm thinking Google Reader and Google Video in particular here), they are not likely to be throwing one billion dollars around without having thought things through. Russell and Rich may be on to something here.