Reality Absorption Field: Why Microsoft was no Google
In the height of the PC era, competition between Apple and Microsoft was of a vertically integrated creator of hardware and operating systems versus that of a dominant licensed operating system. In the smartphone era, Apple has expanded its degree of integration to include chip design, core apps, retail and cloud services. But while the opposition is still a dominant licensed operating system, it is now Android from Google.
For a few reasons that could fill another column, Apple has been able to attain much higher market share in the smartphone market than it did in the PC market. But that is particularly impressive given that Google is a very different company than Microsoft was during the heyday of Windows, and in many ways is a stronger competitor:
After it had established desktop supremacy, Microsoft began investing heavily in R&D and today Microsoft Research is home to some to many fascinating projects. Call its research's goals more focused if you will, but its clear that Google is interested in attacking issues that reach far beyond any near-term business goals with such far-out projects as Google Glass, the self-driving car, and Project Loon. Who knows what humanity-saving skunkworks may be brewing at Google X?
Steve Jobs once said of Bill Gates that his friend and adversary was the first to recognize the potential of software and for many years, Microsoft certainly did do the best job of monetizing it directly. Microsoft is still so dedicated to the idea of recognizing software as a discrete asset that its Windows team changes its Surface team a license fee so as not to give it an unfair advantage over other PC makers that have to pay the fee. In contrast, the engine that fuels Google's growth is advertising, and so a mandate to drive audience is tantamount. This is one reason why Google is so intent on keeping its iOS apps fresh and prominent; to reach a huge set of eyeballs on behalf of its advertisers.
Even today, Microsoft caters strongly to the business market and many of its users are IT professionals. There are divisions of the company that are virtually unknown to consumers, such as its Dynamics customer relationship management software. Windows, Windows Phone, and their server counterparts include many features for enterprise management.
Unlike troubled companies such as BlackBerry and Dell, though, Microsoft does have explicitly consumer-focused businesses in Bing and Xbox, but those are relatively small forces steering the ship compared to the predominant focus on consumers that is Apple's and Google's business. Google has certainly stepped up its corporate push with Google Apps, which has attracted a string of attack ads from Microsoft. Still, Google Wave, its attempt at a collaborative environment that might have challenged Microsoft SharePoint, flopped.
Next week's RAF will conclude our look at how Google is a stronger competitor to Apple today than Microsoft was even at the height of its strength.
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