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Microsoft versus Google. Asymmetric War!

It is not only startups that must wage asymmetric war with superpowers. The asymmetric conflict between Microsoft and Google has been raging for some time.  Microsoft is the lesser foe in search and Google is the upstart in messaging and collaboration. Microsoft releases Bing to threaten Google’s core search and advertising business and Google responds with Google Apps: a good enough SaaS-based alternative to both Exchange and Office. As some 50% of Microsoft’s profits are derived from sales of Office, this is naturally a concern for them.

Today’s news that the State of Minnesota has opted for Microsoft’s Business Productivity Online Suite (BPOS) as their SaaS email choice is a mighty blow in the war to be leader in the cloud messaging and collaboration space. Google looked to have some real momentum in the State & Local Government space with the signing of LA County last year. However, the combination of Microsoft matching Google’s  $4.95 price point with its September ’09 price reduction and the fact that BPOS (particularly the dedicated form factor, BPOS D) is functionally superior to Apps favor Microsoft as the long term victor here. They are already successfully leveraging their dominance in the large enterprise to drive adoption of BPOS  with customer wins like Coca-Cola, Ingersoll Rand & Glaxo. Not a chance that such organizations will let Google touch their data, given their attitude to privacy.

All of which brings up an interesting point. Microsoft has identified cloud as their primary strategic concern, a so-called ‘Big Focus’ area. At Microsoft’s Worldwide Partner Conference in DC earlier this year, Kevin Turner, their COO, stated that they will invest some $9 Billion in cloud focused R&D and marketing this year alone! This has all of the makings of an asymmetric opportunity: momentum and money. Smart entrepreneurs are rushing to start businesses that will co-opt some of that momentum to drive growth and profits of their own.

 
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Posted by on September 29, 2010 in Technology

 

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