Google Will Win the Application War Against Microsoft

PC World just posted an article saying that their money is on Microsoft (MSFT) in the Microsoft--Google Office App War. I put my money on Google (GOOG).

PC World notes that Microsoft Office is used by 80% of businesses and that Microsoft is responding to Google by offering an online version of Microsoft Office for free. PC World is focused on the wrong question. They're looking at trees and have not stepped back to see the forest.

Microsoft is begrudgingly offering one of its greatest profit drivers for FREE but Google's list of FREE is long. Google is prepared to offer consumers access to millions of books, FREE. It is prepared to offer consumers a FREE Google Voice phone number. It is prepared to offer all sorts of FREE software that will be used inside of FREE Google Waves.

It makes all the sense in the world for consumers to buy Android based phones because the FREE software and unfettered access to FREE texting, FREE Internet phone calls and other FREE services, makes the total price of service a bargain over competing brands. The story in regard to the coming battle between Windows and Chrome is similar. Big businesses will continue to buy Windows for a long while but consumers will buy lower priced computers that come equipped with the FREE operating system.

My guess is that the computer consumer/business split is in the neighborhood of 70/30. In other words, given the choice between FREE Chrome and EXPENSIVE Windows, I suspect that the majority of computers will ultimately be Chrome based. Apple (AAPL) will get its share and there might be various Linus Kernels underneath the Chrome based machines but Windows finally has serious competition.

Last week, a conversion tool became available to move Lotus Notes files to Google. One can already move ones Outlook files to Google. Even more interesting, one can now keep ones Outlook files but send the output to one's Google accounts. In other words, Google does not have to "steal" Microsoft and IBM customers to keep growing its market share. If the consumer can save money on his home computer but still send work files to it, then the rational consumer will save money. The rational consumer will "reside" in the Google "world" while going for occasional visits to the Microsoft "world".

Let me make it clear. I am not projecting the downfall of Microsoft. I am projecting that Google will take a considerable market share in a number of areas where Microsoft is dominant. Chances are that a lot of other Internet companies will be hit by the blast sent by Google toward Microsoft and by Microsoft toward Google. The most recent example is that Microsoft has fired its Bling "cannon" at Google but it appears to have hit Yahoo (YHOO) more than Google. Consumers should be careful about tying themselves too closely to one of the many Internet companies that may be the Internet equivalent of the Stanley Steamer Automobile. There are many good products "out there", but some have great advantages over the others. Many a small company is in direct competiton with Microsoft and Google. My money is on Google.

Comments

[dkrp1212:]

Wake me up when Google starts making money off these so called 'FREE' offerings other than search. Yaaaawwwwn....

Jul 20 12:23 PM

[LA Tech:]

Talk to 1000 people about what Google sells and all 1000 people will say SEARCH or PAID SEARCH.

NONE of those 1000 people will say that Google sells mission critical business applications.

WAKE UP! Unless Google starts actually marketing GoogleApps, then GApps is on it's way to a 1% market share.

Jul 20 12:48 PM

[JasonMck:]

First of all, I commend you on the depth of insight and analysis in this article. It is the kind of research and fact-based content that journalists everywhere strive to achieve.

There is considerable evidence that Google will become a market share leader - just look at its history of doing so across so many different products:

Google Base's market share vs. eBay
Google Checkout's market share vs. PayPal
Google Maps market share vs. Mapquest
Google Finance market share vs. Yahoo Finance
Google Video market share vs. YouTube (before they bought it)
Google Chrome market share vs. Internet Explorer
GMail market share vs. Yahoo Mail
Orkut market share vs. Facebook
Picasa market share vs Photobucket
Google Talk market share vs. AOL Instant Messanger
Google Android market share vs. iPhone

In every one of these cases, Google's market share is orders of magnitude greater than its competitors. And I think your in-depth analysis is correct: Google Apps and Google Chrome OS are going to dent Microsoft the exact same way that Android has dented Apple, Checkout has dented PayPal, and Orkut has dented Facebook.

Jul 20 01:07 PM

[Economyst:]

Now let me pull up my calculator, I have 1 million users and I make $0.00 per user on my Free apps so that's 1,000,000 x $0.00 = $0.00

In return for the free apps Google takes your privacy, scans your emails, saves your search history, scans your private documents and the will not say what data it holds about you and where it holds this data.

Jul 20 01:11 PM

[Nitya:]

Google might eat Others Share, No company can escape from Capitalism. Not even GOOG. Except for GMail, the quality of content of other google products are BS.

Try BING


On Jul 20 01:07 PM JasonMck wrote:

> First of all, I commend you on the depth of insight and analysis
> in this article. It is the kind of research and fact-based content
> that journalists everywhere strive to achieve.
>
> There is considerable evidence that Google will become a market share
> leader - just look at its history of doing so across so many different
> products:
>
> Google Base's market share vs. eBay
> Google Checkout's market share vs. PayPal
> Google Maps market share vs. Mapquest
> Google Finance market share vs. Yahoo Finance
> Google Video market share vs. YouTube (before they bought it)
> Google Chrome market share vs. Internet Explorer
> GMail market share vs. Yahoo Mail
> Orkut market share vs. Facebook
> Picasa market share vs Photobucket
> Google Talk market share vs. AOL Instant Messanger
> Google Android market share vs. iPhone
>
> In every one of these cases, Google's market share is orders of magnitude
> greater than its competitors. And I think your in-depth analysis
> is correct: Google Apps and Google Chrome OS are going to dent Microsoft
> the exact same way that Android has dented Apple, Checkout has dented
> PayPal, and Orkut has dented Facebook.

Jul 20 10:49 PM

[Bugs Bunny:]

I have seen Google's free, default 100-row, 20-column online spreadsheet and found it to be instantly, utterly woefully a simplistic joke. Multiply that with the fact that they data mine customer information, and their user testimonials are by fishermen and students who are planning car trips with one another collaboratively who do not feel like using a few brain cells or a post it note, so instead turn to this app. (Nuff said yet to this junior Twit yet?). No..not yet. And have you ever needed to use a real spreadsheet? Or a RDBMS which interoperates with a spreadsheet or enterprise development platform (.Net)? (No, not yet, obviously).

Sep 23 11:25 AM