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Will Google Grab Bill Gates' Billions?
By Computing, Investing-News.Com
Nov 16, 2005, 22:19
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Congratulations to those eagle-eyed readers who spotted our subtle attempt last week to bring hyper-rich Bill Gates back down to the lesser financial expectations of the merely rather wealthy (Computing, 10 November).
'Has Dear Bill succumbed to a phishing attack?' asked Keith Barlow (see Letters, page 27), after reading that Microsoft's founder is, according to Computing (well, me to be precise; someone has to take the blame), down to his last $50m (GBP28m).
'I'm sure I've given him that much over the years myself. What's he done with the rest?' wrote Mike Casey.
Bill's admirers need not worry; we're pretty sure his estimated $50bn bank account hasn't been overwritten by an amusing typo.
But what an interesting question Messrs Barlow and Casey raise. Just how could Gates' fortune drop by a factor of a thousand? And will Google be the culprit?
Too many experts are obsessed with the rise of the search firm and its impact on the world's most successful software company. Gates is clearly fed up with being asked the question.
But is Google the new Microsoft? In marketing terms there are certainly parallels. In the late 1980s and early 1990s Microsoft was the disruptive force in the industry; its aggressive drive to provide high-volume, low-cost software for all nearly destroyed the market leader, IBM. Redmond rode the wave of PCs around the world as IBM stuck to its ailing mainframe business model. And now that everyone is surfing, Google is trying to do the same thing to PC software.
Gates rightly points out that Google doesn't compete in the majority of sectors that Microsoft does: development tools, productivity software, server software and so on. But Microsoft didn't compete in mainframes, server hardware, corporate networking or many of the areas in the old IBM, and Big Blue still lost some $5bn in one year – which, at the time, was the biggest loss in corporate history.
Google is challenging people's expectations, just as Microsoft once did. Back then, Windows made people wonder why they had inflexible, expensive, green-screen systems. Now, Google wants people to question why there are gigabytes of costly software on a PC when the browser and that little white search box provide access to much of what the average user is ever likely to need.
Google is certainly asking questions of Microsoft – but it would be naive to think that a company with one of the world's biggest research and development budgets is not capable of responding.
The launch this month of Microsoft Live, a suite of online versions of Windows-based software, is only the beginning. It has the feel of a tactical response more than a strategic push.
The wider strategy rests on the principle of online software, something that Microsoft has been promoting with varying degrees of success through its web services initiatives for several years.
Statements from Gates suggesting that Windows Live is a milestone in the history of the web are simply designed to push Google out of the headlines.
While the Live initiative will offer benefits for some – mainly small businesses – much of it is about trying to capture a share of the advertising-funded 'free' software market that Google dominates. Few large businesses will be interested, although future announcements may be focused on the corporate market.
Gates is also fond of calling Google a 'me too' company, something his detractors would claim for the early Microsoft. Didn't Apple do Windows first? Wasn't WordPerfect around long before Word? Novell before NT?
The biggest lesson from Google for IT directors has little to do with the future of Microsoft. The search engine's success shows the value of simplicity – that easy-to-use white box that brought the web to life for millions of technophobes.
Google shows that IT users worldwide are demanding the end of complexity; they want to use technology and the web, but on their own terms, not in ways dictated by technical specialists. Corporate and government IT strategies will have to respond.
But will Google take a chunk out of Bill's billions? The parallel from Microsoft's youth is equally relevant. Everyone can remember how Microsoft gave IBM such a bloody nose. But who is comfortably the world's biggest IT company today? Well, that would be IBM.
Copyright (c) 2005 VNU Business Publications Ltd.
Source : Financial Times Information Limited (Trademark)
11/16/2005 12:40:57 PM [COMPUTING]
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