Microsoft is not a saintly non-profit organization dedicated to eradicating starvation by selling software. It is a successful profitable Fortune 100 company that makes billions of dollars a year for its shareholders. What’s more, it makes the software that runs the world.
(Queue 70s Disco Music)
Who makes the operating system that runs on 90% of the world’s desktop computers? Shaft – No wait, I mean Microsoft.
Whose Internet browser has a market share more than double its nearest competitor? Microsoft.
Whose suite of office productivity products is so ubiquitous that when people talk about files from a word processor, they just say, “a word document.” Microsoft.
Whose presentation software is so powerful that more people know what Powerpoint is than know what the GAO is? Microsoft. Damn right.
And yet, all anyone can talk about is Google. Google is so great- their motto is, “Do no evil” – um…is everyone without a motto evil, or just us? Google has a great web based email system – um…so do we. Google has the awesome set of applications that let you do word processing and spreadsheets – um…where do you think they got that idea? Google has an application that lets me organize, upload, and share my photos – OK, they had that first, but we have one now too, and it is pretty nice.
You know that new team that everyone likes better than the long established powerhouse team? You know how most of the time the established powerhouse crushes the new team on the field. Why do we ask? No reason.
Microsoft reportedly is spending billions to improve its own search capabilities, going so far as to try and buy the number two search engine player, Yahoo, in 2008. Although the bid for Yahoo failed, it does illustrate how serious Microsoft is taking the challenge posed by Google. Recent developments suggest that Microsoft is willing to go to the mattresses in its battle with Google.
Bribes, or just a good deal? For many, it doesn’t really matter. For those of you attuned to the deal searching and reporting corner of the Internet, you know about the buzz surrounding Microsoft’s latest attempt to boost its search engine usage. Microsoft is literally offering cash back to users who search for and then buy products using its search.live.com portal. Yours truly currently has a fat balance of $1.16 worth of cash back coming. Oh yeah!
What’s the big idea? Google’s actual product isn’t search results just like a newspaper’s actual product isn’t news. No one pays for news, just like no one pays for search results. What people pay for are ads. More specifically, what people pay for are ads that are clicked on, and even more specifically, people pay for ads that generate sales. By offering cash back, Microsoft hopes to stab at the heart of Google by increasing the amount of search generated traffic that actually leads to sales. Imagine the nightmare for Google if people searched the Internet via Google for information, pricing, and opinions, then suddenly switched over to Microsoft’s Live search to actually find and buy the product. Google does all the work, and Microsoft is the one who gets to hand the client a sale.
Anything You Can Do I Can Do Better Strategy
I don’t have any Sun Tzu memorized, but I bet that a good Windows Live search (See? It’s already working!) would show that somewhere in the Art of War, it says that if you already have the land you want, stay there and let your enemies come to you. In some ways, this summarizes part of Microsoft’s strategy. Microsoft is already installed on virtually every personal computer out there in some form or another. Even Apple’s vaunted Leopard systems are for the most part loaded with Microsoft Office. So, it doesn’t need to do anything to win over the PC computing space, except to not lose ground.
For that purpose, Microsoft has marched its sizable army of developers onto the battlefields that Google has contested. Google offers enormous amounts of storage for Gmail, so Microsoft does for Hotmail. Google has several other services that can be accessed by Google users, so does Microsoft. Google has an online office application suite, Microsoft has announced that it will too. Google has Picasa, Microsoft has Windows Live Photo Gallery. Google has Google Sites, Microsoft is readying a hosted version of Sharepoint.
The list goes on and on. Why, you ask, would Microsoft use its resources to develop free services like Google’s when it could just keep making its regular installed applications better? Oh, Microsoft plans to make its installed applications better, but there is a method to the strategy as well. By having products similar in nature to Google’s, Microsoft can prevent the defection of established business customers who already have untold dollars sunk into Microsoft products and support. As Apple learned the hard way, if everyone’s company is dropping Microsoft on their desk, then the majority of people are going to be using Microsoft at home as well.
To see it better, picture this: A senior marketing executive with a lot of clout at a company is on the road with his laptop for 20 days. During that time, he stumbles across Google Docs and decides he likes it. Upon returning to the home office, he wants the company to start using and supporting Google Docs. Now, this is a big deal at most companies because they already have bought Microsoft Office for all the computers, they already have IT people trained to support those application, they have add-ons, scripts, deployment servers, upgrade cycles, and so on. So, when someone wants to add new stuff to the mix, there is going to be some push back. But, this guy pulls in giant sales and therefore usually gets his way. Is Microsoft doomed? Well, imagine the senior IT executive is having lunch with his friendly Microsoft rep and complaining about the prospect of having to support even more software without more staff. (Note: IT people love to have more stuff and would gladly add applications all day long if they got more budget and more people, but since new apps seldom come with either, they get grumpy about adding workload.)
Now, if the Microsoft rep has nothing to give the IT guy except a “don’t do it speech,” this fight is over. But, if the Microsoft rep can offer up say a comparable online version of the MS Office Suite already installed at the company, now we’re getting somewhere. The exec returns to the home office to announce that after much research, he understands the benefits provided by being able to use online tools, but it will be too much work, money, and trouble to support Google Docs. Instead, the IT department will roll out a limited beta to the marketing group of the Microsoft version. Crisis averted. Oh, and by the way, the company will then probably block access to Google Docs in order to prevent unsupported use. As the marketing guys get used to Microsoft’s online apps, do you think they’ll actually go through the time and effort to also figure out and use Google’s applications for their home use, or do you think they’ll just keep using the good ol’ MS version?
Holding Your Ground Doesn’t Defeat Your Opponent
If it isn’t already in Sun Tzu’s Art of War, then I claim this tidbit of military strategy: Just because you keep the field you are on doesn’t mean you will win the battle. Battlefields move and the business world and computing markets can be tricky places where the prevailing winds change quickly. A strong stalwart competitor is not a desirable addition to the marketplace. So, Microsoft is doing more than deflecting Google’s shots, it’s fighting back.
Microsoft versus Google - Google’s Strategic Battle Plan
This post is part of the series: The Ongoing War between Microsoft and Google
Microsoft and Google are the giants in their fields. Microsoft has the lion’s share of the browser market with Internet Explorer. Google has the search engine over 70% of the world goes to for information. They occupy separate niches. Why does most of the computing world believe they are battling?
- Microsoft versus Google - The Battle Lines Are Ever Expanding
- Google versus Microsoft - Google’s Strategic Battle Plan - Part 1
- Microsoft Versus Google - Microsoft’s Strategic Battle Plan
- Google versus Microsoft - Google’s Strategic Battle Plan - Part 2
- Microsoft Versus Google - The Battle Lines Are SO Expanding
- Microsoft Versus Google - Microsoft Battle Plan - Part 2