OnStartups

Microsoft vs. Google: Who Is The Better Choice For Developers?

Posted by Dharmesh Shah on May 1, 2006 6 Comments


I’ve been reading some very interesting posts regarding the battle between Microsoft and Google.  This is the most interesting battle I’ve seen in quite a while.
 
So, the question for this article is:  If you’re a startup entrepreneur (or simply working on a development project), who do you bank on?  Which platform do you choose?  I covered this topic, from a slightly different perspective, in my prior article “Mashups vs. Gnashups”.  Worth a read (in my humble opinion), if  you have not seen it yet.
 
I kind of think Microsoft and Google has having very different approaches to strategy when it comes to platform:
 
Microsoft:  Create a relatively closed platform, get it on as many devices as possible.  Make exceptional tools and documentation available at a low price to help developers.  This gets them to build applications.  Developers want to build for platforms that have the greatest reach (and can make them money).  Users want to use platforms that have the most applications.  Nice positive feedback loop.  Hence, Microsoft dominates on the desktop.  Microsoft plays a game of “make money from the millions of users” and let others make some too.
 
Google:  Create software that is mostly “free” for users (search, Google Maps, GMail, etc.) and subsidized by advertisers that want to reach those users.  Google plays a game of “attention” (it wants to get users attention and then monetize it).  Google, for the most part, is not out to make other software companies money (AdSense doesn’t count, its mostly for content).
 
Now, here’s the thing.  Outside of some of the challenges of “Google as platform” that I outlined in the prior article,  a number of questions and concerns arise for me:
 
  1. Is the MS strategy simply not relevant anymore in the Internet age we live in?  Is it really all about attention?  Is Microsoft’s model old and out-dated?  (Much like the old model the mainframe companies used to use, whereby the software was just there to help sell the hardware).

 
  1. Are more and more people spending more time (and giving “attention”) to Google’s properties than Microsoft’s?  Do you spend more time on a combination of Google Search, a browser, GMail, etc. than you do on core Windows and Office?  I’m guessing so.  If so, does this matter?  Is 30 minutes spent in Firefox browsing the web the same as 30 minutes spent in Visual Studio writing code?

 
  1. Is there something more going on here than whose software you give “attention” to?  Can there be more to it than taking the finite amount of attention people have to give you and “buying” it with free content and services?  Can this be more than just a “mindspace” (vs. shelfspace) game?

 
Here are my thoughts on the matter:  One of the reasons that Google currently works (and dominates) is that clearly there is a body of people that like things subsidized with advertising.  They’d rather have free search, free email, free calendaring, etc. in return for giving the provider some “attention”.  It works for them, and Google just monetizes the attention.  But, I’m not convinced that this is the way it will always be. 
 
There comes a time when “free” is not good enough and users will want to actually be paid for their attention.  Maybe that’s not such a reach for Google (they do an element of this with their AdSense program whereby they help publishers make money).  But, what if it goes beyond that?  What if users want to monetize more than just their attention?  What if they want to monetize their creativity?  What if they want to build things (like software)?  How does Google help here?  The answer, is not that much.  This is the Microsoft game.
 
Microsoft has gotten exceptionally good at helping other people make money.  Not giving you a free email client, but making people real money.  The lure of the Microsoft platform is that if you picked it, and built applications on it, you could (essentially) charge whatever you wanted for it based on what your market would bear.  Microsoft was not the market maker and didn’t really impact what price you could charge.  Users may have only paid $1,000 for Windows+Office – but they may pay $100,000+ for specialized software that does something useful for them. 
 
On the other hand, if you build a product on a set of Google APIs, there’s an inherent implication (at least in my mind), that its not going to cost a lot.  If its fun and interesting, and you make it too expensive, Google has an incentive to come build it themselves and give it away.  How do you see software developers of the world making real money on Google?  What is the impact of the fact that Google is pushing the price of software down.  Since Google seems to believe that software is incidental (just a good way to get the attention/eyeballs it wants), how should developers respond?  
 
I’m not sure.  I think its going to be a really interesting few years.  These are two very different companies, with exceptional resources and very talented people.  
 
Summary of  my point:  Software has value as it embodies the creativity and intelligence of people that want to solve problems.  Software is not “incidental” whether it comes down to helping sell hardware or attracting eyeballs/attention.  There are still too many problems left to solve (with software) and no one company can solve them all – not even Google.  This means that software developers (and software companies) will continue to be relevant, and platforms will need to help these developers create products and make money.
 
But, I have a biased opinion.  I could be wrong.
 
P.S.  For a great article on a related topic, check out “Eyeballs, Eyeballs, everywhere and not an Ad to Link” by JJ Sviokla.  In addition to being smarter than I am, he’s also a better writer.