Eating the Competition’s Lunch

Where is the next great computer computer company?  Where once was Lotus came Microsoft, where once was AOL came Yahoo, where Yahoo was came Google.

Joel Sposky just posted a long essay on software obsolescence and transitions.  IBM’s balky introduction of a Lotus-branded version of OpenOffice called Symphonys is his starting point.  He tracks the demise of the venerable spreadsheet Lotus 1-2-3 and the subsequent rise of Microsoft’s Excel. While Lotus concentrated on coding efficiency to make their programs work well for the current generation of computers, Microsoft concentrated on adding features and just waited the six months for the computer hardware capabilities to catch up.  Joel sees a parallel in today’s browser-based market for AJAX applications, where network bandwidth and processing power still matter a lot.  Sposky sees the demise of Google’s Mail as imminent.  A smaller, more innovative company will build a software development kit (SDK) that supplants Google’s internally developed code in efficiency, and most importantly, portability and interoperability with other web-based applications.

I find Sposky’s analysis, while knowledgeable and erudite, to be misguided.  Firstly, AJAX applications like Google Mail might be very high profile, but unlike Lotus’s 1-2-3, they contribute little to Google’s bottom line.  Google serves ads , and that’s how they make their money, and they have always been open with their application programming interfaces (APIs) in this regard.  An API isn’t an SDK, but WTFDYC (what the fudge do you care), they can serve the same purpose for developers.  An API is really more important than an SDK anyway, as computing is more service-based, rather than product-based as in Lotus 1-2-3’s heyday.

Google’s true strength is not in it’s little AJAX doodads like Google Mail. It’s search algorithms are improvable with clever work by a competent team Mumbai programmers.  It’s true strength lies in it’s massive server farms, that allow it to serve the planet’s search needs, and it’s ability to store an easily accessible, frequently updated indexed database of the Internet’s content.

So until someone manages to set-up server farms to rival Google’s, with their massive parallel operations, I don’t think Google has much to worry about.   It would take billions to catch up to Google’s server farm supremacy,  which might be already rivalled by Yahoo or Amazon.  These are Google’s true competitors.  Yahoo has been trying to gain back the prominence that Google poached from it, becoming a sort of universal AOL, while Amazon has dipped its toes into search and web applications.  It’s worth noting that Microsoft’s entry into the service based world has been pretty flat.  They have the advantage of their installed base of server software to build on, but the various Unix flavors are superior to them, in numbers and quality.  Microsoft is a desktop software company.  They are also still the best on the desktop.  (Sorry folks, Apple is a boutique hardware company.)

If you really want to talk about obsolesence, talk about the aforementioned AOL.  The stupid company bought into its own public relations baloney and thought they were more than a bunch of convenient phone numbers with modems at the end.  But they didn’t own the phone lines that kept the whole thing together.  Once  the phone and cable companies, got their act together they ate AOL’s lunch.  The service part of what AOL provided was provided for free, and with better quality, by Yahoo.  Then Yahoo, bought their own hype and thought that they were the destination rather than a waypoint and so Google, doing a better job of indexing, ate Yahoo’s  lunch.  The Internet is all about connectiong little people like me together.  When company’s think they are more important than the little people they connect, then they fail, as the little people go to the new companies that let them be themselves.

Cue the munchkins.

Leave a Reply