First, the facts. In June, Microsoft re-launched its online search offering as Bing. Google is, of course, the leader in search. Then in July, Google announced its own operating system, called Chrome OS, which borrows the name of its year-old web browser, Chrome. Microsoft is, of course, the leader in desktop operating systems and web browsers.
Next, Microsoft unveiled Office 2010, the next generation of its suite of desktop productivity software, with significantly enhanced software-as-a-service components. Office is the dominant desktop productivity software, but ask anyone what SaaS products offer similar capabilities and most would mention Google Apps.
Then Microsoft finally concluded the on-again, off-again deal with Yahoo that it had been pursuing for months. Bing will now power Yahoo search.
So, are all these moves in an all-out war between Google and Microsoft?
Of course they’re competitors – especially in search, where Microsoft would dearly love to break Google’s dominance, and hopes the Yahoo alliance will help it do so. Anything Microsoft does in this market is de facto an attempted assault on the market leader, Google.
Office 2010 is a different matter. Tim Hickernell, lead analyst at Info-Tech Research Group in London, Ont., pointed this out almost immediately after the Microsoft announcement. He says it’s wrong to see the live applications in Office 2010 as Microsoft playing catch-up to Google Apps, because Microsoft has no catching up to do. Google Apps is a very small player in the business market, Hickernell says.
And to the extent Google Apps has made inroads in business, it’s not as a lower-cost alternative to MS Office but as a collaboration tool. For some purposes, such as small, dispersed project teams, web-based spreadsheets and documents are a great way to share information and work together.
Undeniably, Microsoft has noticed this, and it’s one reason the company realizes its customers might want such capabilities in Office. Google Apps’ existence may have helped push Microsoft to move faster on hosted software (Microsoft is rarely first with innovations like this).
Matt Rosoff, an analyst at Directions on Microsoft in Seattle, thinks so. Rosoff’s take is that Google needs another revenue stream when search tops out, SaaS is it, and Microsoft knows that. Hickernell, on the other hand, sees the web apps in Office 2010 as part of a broader Microsoft strategy to support hosting that also includes multi-tenant versions of software like Microsoft CRM.
Hickernell and Rosoff agree, though, on whether Google’s Chrome OS threatens Microsoft. Neither thinks it does. Rosoff describes it as “the first thing that Google has done that I really don’t understand why they bothered.” Hickernell thinks he knows why, but it’s not to compete directly against Windows.
To Hickernell, the naming similarity between Chrome OS and the Chrome browser is no coincidence. They’re both about the same thing – a platform for delivering Web 2.0 or AJAX applications. So yes, Chrome OS competes with a Microsoft product- – but it’s not Windows, it’s Silverlight. And its bigger competitor is Adobe AIR, the leader in the AJAX space.
So Microsoft and Google are indeed rivals. But the idea that every move the companies have made recently is driven purely by that rivalry is one of those answers that H.L. Mencken famously said can always be found to complex problems: clear, simple, and wrong.