BUsiness & Office software: Is Microsoft for grown-ups and Google for kids?

While Google continues to grow in prestige and profit, there are signs that its halo is slipping. As a software and services provider to the enterprise, quality control and staffing issues are big problems for Google, and it’s driving some developers and businesses to Microsoft.

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Google has been on a tear for the past decade. It has risen from a scrappy little Internet search engine built on a cluster of cheap Linux machines to one of the world’s most powerful and profitable companies and, arguably, the most well-regarded brand on the planet.

During this same decade, Microsoft has seen its star fall nearly as far as Google’s has risen. Although never a wildly popular brand, by the late 1990’s Microsoft was to computing as Kleenex was to tissue — at least for the masses.

However, its anti-trust defeats in the U.S. and Europe have painted Microsoft as an ugly, petty bully, and its own product development and public relations failures with its flagship Windows Vista product has become one of the most infamous blunders in the annals of American commerce.

The two companies are now, of course, arch-rivals and are competing fiercely in Internet search, advertising, and software. Google is winning big in search, while Microsoft still holds a huge lead in software. But, these two spheres are colliding as the Internet evolves into a front-end software platform that will eventually relegate the operating system to back-end plumbing.

This process will transform the traditional business model for software and will expand the Internet into a more targetable and lucrative advertising platform. That’s why Google wants into the software business and that’s why Microsoft is trying to turn itself into an Internet company.

We’re now at an early crossroads in Internet applications, and honestly both Google and Microsoft are floundering and getting soundly outpaced by startups like Zoho and Force.com. Google Apps are simplistic, lack sophistication and standardization, and do not have as good of an online/offline sync as Zoho, for example. Meanwhile, Microsoft’s “software + services” strategy is barely recognizable since the “plus services” part has so far been half-hearted because Microsoft fears cannibalizing its cash-cow business, Microsoft Office.

Nevertheless, the situation is most acute for Google. The Web is its home territory and there are two disturbing trends that it must overcome if it wants to take its success in Web search and expand it into Web applications:

1. Inability to move software out of Beta mode
2. Challenges in hiring and retaining the best software developers

Let’s take a closer look at both of these issues.

Google is increasingly developing a poor reputation — especially among IT professionals — for perpetually leaving its programs in “Beta” mode. This is viewed as a cop-out that’s used to lower expectations and deflect criticism. After all, when there’s a problem with the software it’s too easy to simply respond, “What do you expect, it’s still in Beta.”

Even worse, the perpetual Beta issue is evidence that Google has problems with its processes, discipline, and organization. Google has prided itself on its decentralized structure that fosters creativity and innovation — and it’s clear that it has led to many successful new products and developments. However, that approach of slightly-organized chaos is also one of the reasons that Google seems incapable of taking a major software product the last mile to deliver a production version that it is willing to stand behind and guarantee its quality.

And, that issue of quality control also leads us to Google’s other major challenge — staffing. This may sound puzzling at first, since Google has been famously lauded as one of the world’s best companies to work for because of its employee-friendly approach that includes fringe benefits like free meals, free transportation, and the ability to bring your pet to work. And, it’s also true that while Microsoft was the most desired destination for many techies in the 1990’s, it has been Google that they have flocked to in the largest numbers since the turn of the 21st century.

Nevertheless, in 2008 new anecdotal evidence has emerged that some software developers are leaving Google because they want to create better products and are frustrated with Google’s lack of organization and lack of dedication to quality control. Meanwhile, some software engineers are even (gasp!) choosing Microsoft over Google when they get offers from both.

Google’s benefits — free meals, free transportation, and even laundry services — have always had a major appeal for students straight out of college. And, Google has hired tons of these students at entry-level wages over the past decade. The problem is that once the highly-motivated workers in this group mature and get past the outstanding benefits at Google, they ultimately want to create great products and get rewarded and recognized for their efforts in building lasting programs that are valuable to users. It’s become clear that some of them are not finding that at Google.

I’m not giving Microsoft a free pass here. When it comes to software quality, Microsoft does not have a stellar reputation. In fact, one of the major “innovations” that Bill Gates pioneered was the idea of releasing software that was good enough, even if it wasn’t perfect. Google’s perpetual Beta approach is, in some ways, just a variation of that theme.

But, Microsoft also has a well-developed, highly-organized internal structure that is almost the antithesis of Google. Microsoft knows how to run a product cycle to move software out of Beta, bring it to market, and stand behind the end product, and the company will likely apply this process to Web applications once they fully commit to it.

While lots of things will change with the move to Internet applications, the perpetual Beta will never replace the traditional got-to-market cycle of software, and pretending that it will is unsatisfying to both users and software developers.

Bottom line for IT leaders

Microsoft is a known entity for IT and the enterprise. The best IT leaders have learned how to manage the relationship with Microsoft, even when they gnash their teeth over the price of Microsoft software and the lack of alternatives. The advent of the Internet as a software platform is going to put price pressure on Microsoft and provide IT with more choices, and that will be a very welcome development in the coming years.

However, while Google has taken a huge lead in search and wants to make inroads into business applications, they will not be a major player in this category unless they can overcome their issues with perpetual Beta software and better organizing the talented developers that they recruit.

Unravelling the Chrome masterplan... with Windows 2.03

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Analysis of The Google Masterplan :

When people buy software - buy it in seriously large amounts - it isn't just today's binary they're choosing. They're buying what they think is a bit of the future - they're buying a piece of risk insurance. This explains why very mature and well-proven systems often lose out to the Newest Kid on the Block. It also explains the enduring effectiveness of FUD and Vapourware.

And it's not just software. From TP monitors, to minicomputers, to Novell Netware, recent history is full of examples of perfectly splendid systems being thrown out and replaced with something that doesn't live up to the billing - and perhaps never will. Which sounds wacky, but that choice is being made on the rational calculation that the software or hardware of choice today won't be made or supported, or the standards that bind the parts of the system together will become obsolete. (Which leads to the same thing.)

Sometimes a brave company bucks the trend. Most famously Microsoft refused to "eat its own dog food", and stood firm against the move to client/server computing running PC or Unix-based databases like Microsoft SQL Server, instead insisting that its mission-critical accounts department ran on, er, an IBM AS/400 mini.

But by and large, the strategy works very well for companies that trumpet a "paradigm shift", or "new era in computing", and convince people that they own a secret part of the future - one that no one else can yet see. It worked for Microsoft, and Google hopes it will work for it, too. The Chrome browser today is little more than a piece of demoware, but it's not just about "today", is it?

Before we see what Google is hoping to achieve with Chrome, let's take a look at a precedent from history that I find quite spooky. Old-timers may excuse this brief wallow in nostalgia.

In the 1980s, PC business software was dominated by three names. Ashton Tate, Lotus and the WordPerfect Corp. The former two produced dBase III and Lotus 1-2-3, which were practically mandatory. Each product had what your modern, New Age marketing-droid would call an "ecosystem" around it - the value of the choice was as much in third-party add-ons and libraries of macros and scripts, as in what came out of the box. Developers skilled in these black arts were plentiful too.

For their part, Ashton Tate and Lotus had grown fat and lazy from astronomical growth, and had been slow in updating the software. They had seen off competition from integrated suites, and looked formidable enough to keep superior rivals from gaining much market share. And they were very expensive - dBase IV retailed for $795 in 1990.

But buyers, who were in no rush to migrate, knew there were two events in the coming years that might force them to re-evaluate at some point. 32bit computing would eventually supplant the limited address space of DOS running on 286 or 8086 machines, and eventually - at some far off date in the future - graphical user interfaces would come to the PC.

Microsoft knew this too, but it had a few problems. Its own clunky GUI, Windows, offered no advantages to the business user. The giants of the DOS world wouldn't run very well inside Windows - if they ran at all. There was no unique killer application for Windows, either.

Worst of all, few people really believed that Microsoft owned that vital secret of the future, or knew something no else knew. Apart from DOS, Microsoft simply sold a few compilers, while its own applications rarely got to a medal position in the shoot-out comparison tables in the computer press. And that was about it.

As Software Magazine, reviewing Windows 2 in 1988, wrote -

"There are challengers, including Desqview, and entries from Hewlett-Packard, Xerox and IBM's own Presentation Manager."

In other words, if the PC went GUI, it would probably be thanks to one of the grown-ups. Apple had priced itself out of the business market and refused to license the software. However, what credibility Microsoft had rested entirely on hanging onto IBM's coat tails with its work on OS/2. And few people had any great enthusiasm for a future that returned control of the industry back to IBM.

So Microsoft bundled a Windows "runtime" with one of the few prestige applications that had been ported to Windows. Typically this might be Aldus Pagemaker, or Microsoft's own Excel spreadsheet, because there weren't really any other heavyweight Windows applications. The runtime was a limited version of Windows that started when PageMaker ran, and ended when you closed it.

Unravelling history

Like Microsoft 20 years ago, Google wants to shift users to a new platform - its own - for which there is much hype but no great enthusiasm. Like similar migrations the new platform offers very few advantages - and plenty of disadvantages. Not only are great chunks of functionality missing, but even when you're supposed to be "online and always connected", you might not be.

There have been plenty of hiccups in the "cloud", recently. As Ted Dziuba wrote here recently, it's captivated the investors for several dubious reasons - one of which is that a "cloud" is ever so easy to draw on a White Board.

That's where the "runtime" comes in. Today, Chrome is simply a technology demonstration - and I can't see Firefox users with their carefully-cultivated selection of add-ons, or Opera users, making the jump any time soon. But Chrome is a Trojan Horse for bundling Google's Gears onto your PC - and in the hope that manufacturers look to Google services for new Eee-type lightweight PCs, perhaps running something like gOS, the Ubuntu-derivative.

Gears is simply designed to make Google's online services more attractive, and makes it looks like Google's is setting the standard: leading where everyone else follows. (That isn't entirely unfair.) And as a technology demonstration, Chrome succeeds.

Google has two powerful arguments for software as a (Google) service: it may be cheaper than licensing Office, and less complex than running client/server in your office. Uncannily, that's the two things that helped swing the market Microsoft's way, too. Migrating to a GUI required more powerful and expensive PCs, but it would save large amounts in training costs.

Microsoft then played its ace: it began bundling a not-very-integrated "suite" of applications for around $500 - less than the price of dBase or 1-2-3, and that's before you'd bought the essentially companion software such as Clipper. In a recession, that started to look quite attractive.

Windows also offered a "cockroach" alternative to some of the grander vapourware designs on offer. Rather than wait for the Next Big Paradigm Shift (there were many of these vision-things being touted back in 1990, invariably including the words "Object" and "Architecture"), users smuggled in a copy of Windows for Workgroups and tried to get it running on the company network. Google services have the same appeal: people simply start using them.

So will Google succeed? Well, you tell me (below). But your 80s throwback will offer a couple of perspectives, that I've looked for this week, but failed to find.

Clever is not clairvoyant

One of these is that "the company that knows secrets about the future™" is a myth created by the press - particularly the glossy end of the US business press. It's a powerful narrative, and suits their lazy writers, but the reality turns out to be very different.

Years later, we discover the company was simply blundering on in a state of chaos, slapping tactics together until they passed for a strategy, and winging it. And so a consequence of this myth-making is that it makes the poster child - the Google or the Microsoft - look much cleverer and more coherent than it really is. It's an elaborate game of bluff.

At the time Windows offered business a cheap and cheerful "standard", but Microsoft's success was not based on technical excellence - on any unique knowledge of 32-bit computing or excellence in UI design - but rather more to its iron grip on the PC distribution channel. PC manufacturers paid Microsoft whether they shipped MS-DOS and Windows with the PC or not. So why ship anything else? Antipathy to IBM helped Microsoft enormously, too, of course.

But I simply don't see where Google has the same grip over routes to market that Microsoft could exploit. And while costs can certainly be lowered by throwing away all your useful software, I don't see that Microsoft generates the same animosity that IBM once did. I'm confident that we'll be using web services more, as they get richer and more functional.

I'll predict that Linux will thrive as a kind of bootloader on low-end PCs designed to use these services. And that Microsoft, as a result, will face continual margin pressure on Office and Windows in the years ahead. But I can't see either Microsoft, or the idea of local applications, fading very far from view.

While much of the press has creamed itself over Chrome this week, it's almost rude to point this next one out. 

When there's one computer serving the planet - even if it's Google's - that's a single point of failure.

And in that sense, Google's vision of computing looks less like a piece of risk insurance, than a very big risk indeed.

Sorry to get the last thing rolling, But remember DO NO EVIL!!!??

Try as we can...