We all know from experience … with Google Apps you can often have to add a lot of different third party appliances just to get to parity with the experience and then all of a sudden you've got lots of vendors to manage and all of a sudden it's very different to that low cost price point that Google initially positioned to the customer.
This is an old story; shades of every high-end vedor that's ever been wiped out by a low-cost player. As a hardware guy, it reminds me of the response you'd hear from POWER, PA-RISC, Alpha, SPARC, etc. vendors when you mentioned x86 workstations.
At the time, my response was, sure, maybe you've got a better product now, but what fundamental advantage do you have that keeps Intel from using their large, and growing, userbase and economies of scale to crush your R&D spending and pull ahead?
Software doesn't have such high fixed costs, and MS has a ton of money to spend on R&D. But, this still sounds like a lame defense.
Vendor management comes with a real cost (typically in terms of time).
This might be more contentious, but I believe that people that are still using Windows Server (and Microsoft offerings other than AD) are doing so because it's easier to use/more familiar than Linux/open-source alternatives: Throw Joe-Linux on Acme-Cloud-Provider and use Weekly-Flavor-Config-Management? Sounds hard. Click some buttons and fudge your way through group policy? Now we're talking something I can do to pay off a mortgage.
What's especially damning is that there are no specifics. It amounts to an unsupported assertion to the sales people that they are not selling the inferior product. I have yet to see any of the "lot of different third party appliances."
This is the death of complete Microsoft dominance, not the company. Cloud email represents a relatively small portion (25-30%) of the total enterprise market, and Microsoft owns the on-premise market.
Google is maturing as an enterprise vendor, and the simplicity of the licensing model and lack of client side software is appealing to the "new economy" companies: small businesses, businesses using Macs/BYOD and businesses using lots of freelancers/temps.
For the traditional enterprise shops, Google can be a real pain. You need to buy 3rd party stuff for things like identity federation, for example.
At the end of the day, it's called competition, and it's great. Instead of Ballmer & Co. coming down off the mountain and letting us know what we're going to do for the next 5 years, we have a real marketplace and can say no.
The question now is, can Microsoft compete in a world where they are no longer a monopoly?
They make almost all of their still-quite-impressive profit from the markets that they still completely dominate, like enterprise productivity software. They are probably losing money on products like Windows Phone and Surface.
So what happens when Microsoft has credible competition in every market it sells to? That will soon be the case (if for no other reason than the fact that Google is actively trying to kill them), and I'm not sure even Microsoft is confident that Microsoft can compete and stay profitable in that environment. I see a lot of belt-tightening in their future.
I don't really think a company can get--or stay--as big as Microsoft is, without the rent-seeking ability afforded by near-total monopoly of a major market.
Is this "revelation" really that interesting? Everyone knows that Microsoft can't fight anyone based on price. Every salesperson in the same situation knows that the only way to fight low price is by selling based on perceived value. "Oracle is expensive, but if you compare its value, it's much cheaper." BMW can't compete vs a Hyundai based on price, they need to compete based on perceived value. For me Hyundai is more than adequate, because I only look at my car as a way to transport myself, not as a status symbol or an extension of my being. For those that do, good for them, and they will find value in a BMW.
Same goes for MSFT vs Linux or GOOG, etc. There's nothing new here.
Office suite is still the Adobe Photoshop of business software. Office is still deeply entrenched in businesses and holding on because it still offers the most features.
For example, Excel vs. Google docs: you can do basic charts and graphs in Google docs, but clearly Excel has many more features, such as data analysis tools, and when you connect Excel to Microsoft SQL server you have reporting + data mart, where Google Apps offers nothing similar (not without a lot development work needed to set it up)
Google Apps is good but often you still find businesses also need Office suite. If Google were to say, directly connect Google docs to a data warehouse tool such as Dremel, the add a lot of advanced data analysis features to Google docs, then things would start to get interesting.
Don't forget the millions, perhaps billions of dollars spent by organisations developing complex Excel/VBA based software. Short of copying to Docs every single Excel feature and quirk, there's no way Google can compete in that area. It will probably take a decade after everyone stops developing new software in Excel/VBA before organisations can think of moving away from it. Most large companies haven't stopped yet.
At all the companies where I've worked at, I've never seen anyone use anything more advanced than a few basic functions.
The _vast_ majority of users in a corporate environment use:
1> Font changes (color, size etc)
2> Images
3> Hyperlinks, ToC and other forms or document organization.
It is silly to buy 1000 Desktop or Office 365 Excel licenses, when only 20 people will use a substantial amount of its features.
More importantly, people are not emailing each other Office documents. I've seen companies who do _have_ google docs do it.
Google's goal isn't to replace Office. They just have to force Microsoft to reduce their margins, to refocus on Office as a product - if Google is lucky, Microsoft will pull a Win8/Surface (ie, total freak out) and abandon their main market to squash the "cloud" competition. If they're not, then customers win, at not that much cost to Google.
Either way, Microsoft will see their unit margins drop. This is good business strategy for Google given their rivalry.
The entire US Department of the Interior (~71k employees) switched to gmail this year. It seems to have gone pretty well. The most common complaint I've heard is that gmail doesn't support the custom smiley faces that Lotus did.
The inbox size vastly increased (500MB => 30GB) which makes the record keeping much easier, just never delete anything. Before we had to empty our mail into offline archives.
Everyone still uses office for word processing and spreadsheets. The online storage is nice for sharing files though.
There will be disaster stories around for any big migration. I can't say I'm particularly enjoying my university's migration to Microsoft's email offering.
Why? A medium business running in Romania has much more to worry from Romanian government/tax authorities than US security agency overreach.
And even if they do - where to go? A lot of non it companies don't have even real ops ... hosting your own email and servers is expensive in that case. And potentially dangerous a modest string of bad luck could wipe you.
There's something to be said about simplifying your product line. I guess msft's approach is: if we can't beat them on price, confuse the hell out of them?
It's two different business models: Simplicity versus Total Solution. Starting from scratch simplicity usually seems better, but as companies grow they (for good financial reasons) wind up doing a lot of 1 off solutions in the name of flexibility and being customer-centric.
I agree. I wonder if they appreciate how frustrating it is to deal with their licensing. Even more than price, small IT departments want to just get out from under that wet blanket. Why Software Assurance? It's all to Microsoft's benefit. If a company wants to upgrade then let them pay the discounted price and upgrade on their own schedule. Don't turn it into an annuity for the vendor.
Apple is the most valued (market cap) platform company because it owns the affluence market and commands high margins across the board. Google has gone after the "next billion" users, people who don't have that kind of money. MS might be trapped in the middle, neither sexy enough to be Apple nor cheap enough to be Google.
Your comments only really apply to the consumer market.
Microsoft's position in enterprise is extremely strong. Apple is not making any serious attempt to challenge that (and probably never will), but Google (and Linux) pose a real threat to Microsoft in the long run.
MS: "Let's fight them instead by giving as much user data to the government as possible, grab some more contracts. We need something reliable and easy to use. Does anyone know how to install Linux?"
[+] [-] luu|12 years ago|reply
This is an old story; shades of every high-end vedor that's ever been wiped out by a low-cost player. As a hardware guy, it reminds me of the response you'd hear from POWER, PA-RISC, Alpha, SPARC, etc. vendors when you mentioned x86 workstations.
At the time, my response was, sure, maybe you've got a better product now, but what fundamental advantage do you have that keeps Intel from using their large, and growing, userbase and economies of scale to crush your R&D spending and pull ahead?
Software doesn't have such high fixed costs, and MS has a ton of money to spend on R&D. But, this still sounds like a lame defense.
[+] [-] mjolk|12 years ago|reply
This might be more contentious, but I believe that people that are still using Windows Server (and Microsoft offerings other than AD) are doing so because it's easier to use/more familiar than Linux/open-source alternatives: Throw Joe-Linux on Acme-Cloud-Provider and use Weekly-Flavor-Config-Management? Sounds hard. Click some buttons and fudge your way through group policy? Now we're talking something I can do to pay off a mortgage.
[+] [-] Zigurd|12 years ago|reply
[+] [-] Spooky23|12 years ago|reply
Google is maturing as an enterprise vendor, and the simplicity of the licensing model and lack of client side software is appealing to the "new economy" companies: small businesses, businesses using Macs/BYOD and businesses using lots of freelancers/temps.
For the traditional enterprise shops, Google can be a real pain. You need to buy 3rd party stuff for things like identity federation, for example.
At the end of the day, it's called competition, and it's great. Instead of Ballmer & Co. coming down off the mountain and letting us know what we're going to do for the next 5 years, we have a real marketplace and can say no.
[+] [-] kyllo|12 years ago|reply
They make almost all of their still-quite-impressive profit from the markets that they still completely dominate, like enterprise productivity software. They are probably losing money on products like Windows Phone and Surface.
So what happens when Microsoft has credible competition in every market it sells to? That will soon be the case (if for no other reason than the fact that Google is actively trying to kill them), and I'm not sure even Microsoft is confident that Microsoft can compete and stay profitable in that environment. I see a lot of belt-tightening in their future.
I don't really think a company can get--or stay--as big as Microsoft is, without the rent-seeking ability afforded by near-total monopoly of a major market.
[+] [-] kjackson2012|12 years ago|reply
Same goes for MSFT vs Linux or GOOG, etc. There's nothing new here.
[+] [-] snorkel|12 years ago|reply
For example, Excel vs. Google docs: you can do basic charts and graphs in Google docs, but clearly Excel has many more features, such as data analysis tools, and when you connect Excel to Microsoft SQL server you have reporting + data mart, where Google Apps offers nothing similar (not without a lot development work needed to set it up)
Google Apps is good but often you still find businesses also need Office suite. If Google were to say, directly connect Google docs to a data warehouse tool such as Dremel, the add a lot of advanced data analysis features to Google docs, then things would start to get interesting.
[+] [-] leoedin|12 years ago|reply
[+] [-] ashayh|12 years ago|reply
At all the companies where I've worked at, I've never seen anyone use anything more advanced than a few basic functions.
The _vast_ majority of users in a corporate environment use: 1> Font changes (color, size etc) 2> Images 3> Hyperlinks, ToC and other forms or document organization.
It is silly to buy 1000 Desktop or Office 365 Excel licenses, when only 20 people will use a substantial amount of its features.
More importantly, people are not emailing each other Office documents. I've seen companies who do _have_ google docs do it.
[+] [-] r00fus|12 years ago|reply
Either way, Microsoft will see their unit margins drop. This is good business strategy for Google given their rivalry.
[+] [-] dvmmh|12 years ago|reply
[+] [-] sz4kerto|12 years ago|reply
[+] [-] dmm|12 years ago|reply
The inbox size vastly increased (500MB => 30GB) which makes the record keeping much easier, just never delete anything. Before we had to empty our mail into offline archives.
Everyone still uses office for word processing and spreadsheets. The online storage is nice for sharing files though.
[+] [-] lclarkmichalek|12 years ago|reply
[+] [-] djim|12 years ago|reply
[+] [-] jsolson|12 years ago|reply
We do pretty well with a more or less entirely Google Apps workflow.
[+] [-] mtgx|12 years ago|reply
[+] [-] venomsnake|12 years ago|reply
And even if they do - where to go? A lot of non it companies don't have even real ops ... hosting your own email and servers is expensive in that case. And potentially dangerous a modest string of bad luck could wipe you.
[+] [-] djim|12 years ago|reply
[+] [-] schrodingersCat|12 years ago|reply
[+] [-] mathattack|12 years ago|reply
[+] [-] forgotAgain|12 years ago|reply
[+] [-] dorfsmay|12 years ago|reply
[+] [-] jjindev|12 years ago|reply
[+] [-] bornhuetter|12 years ago|reply
Microsoft's position in enterprise is extremely strong. Apple is not making any serious attempt to challenge that (and probably never will), but Google (and Linux) pose a real threat to Microsoft in the long run.
[+] [-] markm248|12 years ago|reply
[+] [-] decryptthis_NSA|12 years ago|reply
Assuming the offering is just the same, but for many it may be good enough
[+] [-] redrocket|12 years ago|reply
[deleted]
[+] [-] homosaur|12 years ago|reply
[+] [-] homosaur|12 years ago|reply