Google and Microsoft–the parallels

GigaOM yesterday published an article about How Google is growing up into a real IT company, which talks about how the world’s favourite search engine has switched from releasing lots of ‘science project’ applications like Google Wave and Google Knol, and Google Questions to a fewer number of well thought through and solidly engineered products like Google Drive, and BigQuery.

There are lots of good reasons why Google is making this shift, the most important and obvious of which is the need to focus on a smaller number of things and make them work. The second most important, is maybe less obvious, and that is a desire to strengthen the enterprise side of their business, and this is what made me think about Microsoft.

As I see it the parallels are:

  • Both started with a fantastic monopoly business – Microsoft Windows and Google Search
  • Both expanded successfully into adjacent areas which leveraged and protected their monopolies – Microsoft Office and Google’s Android
  • Both ran into trouble with regulators for abusing their monopoly position to advance their other products – Microsoft with IE and MediaPlayer and Google for using individual’s search data in their other products
  • Both were blindsided by a major market evolution which undermines their core franchise – Microsoft by the internet (espescially Google) and Google by social (especially Facebook)
  • Both have sought to reduce their dependence on their threatened monopolies by moving into the enterprise

Google has probably been 6-7 years behind Microsoft in each of these steps and 6-7 years ago Microsoft looked about as strong as Google does today. Hopefully Google will hold its current position more effectively than Microsoft was able to.