MS: The ultimate guard dog
Throughout their history MS has always acted like the ultimate guard dog. Not only do they protect their own territory (operating systems, applications, development tools), they also protect anything in their neighborhood. They're a little like this:
"Netscape has created the browser. We must defend ourselves. Give IE away, must ... kill ... Netscape."
"Video games? That's in our neighborhood, threat perceived, must defend, create XBox."
"Music? Hmm, well, we don't have to do anything with music, but that money Apple is getting from the iPod and iTunes is just too attractive to pass on. Must create Zune."
"Look at all that ad revenue Google is getting from search. No threat to Windows, Office, or dev tools, but we must defend the 'hood. Create our own search site. Create our own advertising tools. Defend. Defend. Defend."
Kill or be killed
In this way MS plays a game of "kill or be killed" by going after any perceived threat. And whether Google likes it or not, they're in this game. So, what do they do?
I think Google has several choices:
- Be passive, ignore that MS is coming after you, focus on your search and ad businesses, and continue building your own web-based office applications. Just know that if you choose this approach MS will pursue you relentlessly, funded by their Windows and Office cash cows. Your only hope is to out-execute and out-brand them, which so far you have done in search and ads.
- Recognize that their relentless pursuit is funded by their cash cows (Windows, Office), and go after them.
- Again, be aggressive and attack their turf, but do it with partners, including Apple, Sun, OpenOffice, and others, like Corel. But you do this knowing that each of these partners has weaknesses that have prevented them from being successful so far, and none are really attacking Windows directly.
Here's my brief take on each of these options:
In the business world, I don't think it's a good idea to be passive whenever someone else is attacking your business, especially when it's MS.
Regarding the option of relying on partners to attack MS, the partners in this case could be Apple, Sun, and open source projects like OpenOffice and all the Linux variants. To date they haven't had a significant effect on MS Windows and Office, some of which I'll discuss shortly.
Of these possible partners, Sun has had years to improve on OpenOffice, but they haven't done much with it. Apple obviously has some momentum right now, and with Eric Schmidt and Al Gore there are obvious ties between the two companies, but their Mac market share is still only around 6%, and their iWork suite of applications is not an Office-killer yet either. Apple also shares the same problem with Windows: corporations and consumers being tied to the Windows API. (And users running virtualization software like Parallels doesn't help, as that still involves selling Windows licenses.)
In the end, I think it's great to try to leverage partners as much as possible, but Google is going to have to shoulder the brunt of this load.