After years of trying to understand whether Google has the wherewithal to jump in front of Microsoft as the most powerful software company, I've finally came to a conclusion: It does!
That's not because of Google's huge lead in search, nor in advertising, nor because users are so much more enamored with Google than with Microsoft.
It's because of a powerful strategy that Google is employing related to a product that's not even great, in a market in which Microsoft is a bigger player. In fact, Google is still an also ran in that market: telephones.
The product is Google Voice, which the company obtained when it acquired Grand Central. But Google Voice, while it's got a lot of great bells and whistles, is unreliable. I've heard about a lot of happy users -- but just as many unhappy users. According to Global Grind, Google Voice has about 1.5 million registered users, but only 580,000 of them are active. I suspect that will change as Google Voice matures and improves.
The genius of the strategy, though, is that Google is becoming a phone company like none we have ever seen before. Its newly released Android 2.0 cell phone operating system is fast becoming a favorite of cell phone manufacturers and users alike. The users like its features and its catalog of third party applications, which while smaller than Apple's catalog of apps for the iPhone, is growing larger every day. The manufacturers like the price of Android: It's free.
The Google strategy is disruptive in a big way. It has tightly linked Google Voice to Android, substantially enhancing the phone experience for anybody who has both a Google Voice number and an Android based phone, such as the Samsung Behold or Motorola CLIQ (both on T-Mobile) or the Motorola Droid or htc Droid Eris (both on Verizon Wireless).
And it has made two acquisitions in which it gets Skype-like Internet telephone capabilities, an advanced mobile phone advertising technology allowing the company to continue to offer phone services for free, and the engineers to support both.
In essence, Google is creating a powerful new user cell phone experience rivaling that of the Apple iPhone -- but doing it in a way that it doesn't have to manufacture all of the devices. So it will likely grow its market share very fast.
Where does that put Microsoft? Right in the cross-hairs of Google's newly aimed weapons. Apple won't suffer from the Google advantage. Microsoft will, as Google takes large chunks of market share from Microsoft's Windows Mobile smart phone software. More importantly, though, to take full advantage of the user experience on Android, the user will need to sign up for a Gmail account and use the Gmail contact list as a primary contact list.
This is where the battle gets heavy. As Google converts millions of people to Gmail, it will eat into Microsoft's huge market for Outlook and Exchange (the server software that powers many of Outlook's corporate features).
Suddenly Google's appearance in the cell phone market becomes a powerful weapon to gain control of your computing desktop -- even beyond messaging. It's genius. It may even give Google what it needs to goad users into using the Internet cloud as their computer operating system instead of Windows.
When it's in full swing, this battle will dwarf the Microsoft-Netscape war.
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