Imagine two gigantic mountains of money. On top of each sits a warrior that wants nothing more than to be sitting on a pile of money twice the size. One warrior, we'll call him Google, dominates the world of on-line search and advertising. The other, we'll call him Microsoft, dominates productivity software.What's the fastest way to double the size of your mountain? Simple, take the other guy's pile.
Google entered the world of enterprise productivity software earlier this year. While they continually claim that they don't compete with Microsoft and that their goal is to bring collaboration and productivity to currently under-served workers,it's hard to imagine that they aren't eyeing that big pile of money that Microsoft is sitting on. Afterall, all those free lunches in Google's cafeterias aren't really free. Google wants you to give up that software and information on your laptop and access it all from their data centers.
Google spokespeople continually repeat the mantra, "We understand the enterprise". While I believe that to be true, I also think that Google has a lot to prove before being taken seriously as an enterprise software vendor. If they really intend to try to get at Microsoft's pile of money, they are going to have to demonstrate that they understand security, privacy and reliability and all in the emerging software as a services (SaaS) model. They also have to prove that they have the stomach to take on Microsoft for the long haul. Let's be clear here, Microsoft is not fond of anyone putting their hands on their pile of money.
Quite a surprise this morning, waking up groggy after 4 fun filled days at our IT Forum event in Nashville, and seeing Microsoft's attempting to acquire aQuantive. You're probably thinking this acquisition has nothing to do with information and knowledge management. Oh but it does...especially for any of you looking to support your online operations through the implementation of Web content management and related technologies.
Why should you care? Well, aQuantive offers interactive design services through one of their operations, Avenue A|Razorfish. I've witnessed enterprises - such as yours - increasingly engage their interactive design agencies for not only site design and persona development support, but Web content management technology recommendation and implementation assistance. We often see Avenue A|Razorfish and Molecular resources assisting in Interwoven implementations, and other agencies supporting Vignette, FatWire, or Tridion implementations. And, now that Microsoft's about to acquire the services of aQuantive, you can expect to see at least one agency push for using SharePoint Server 2007 to support Web site initiatives.
I attended a conference sponsored by Carnegie Mellon West; The Fisher IT Center at the Haas School of Business, UC Berkeley; the Software Industry Center at Carnegie Mellon University; and Services: Science, Management, and Engineering Program at UC Berkeley. The one-day event was held at the Microsoft Campus at Moffitt Field in Silicon Valley. The goal of this conference was to discuss where the software industry is going. Ten sessions including individual speakers and panels from university and business communicated the strong message that software is at a crossroads and will dramatically change in the future, and . . . the change has already begun. To access slides of the speaker presentations go to http://west.cmu.edu/sofcon/postcon.
The changes are around growth of software-as-a-service, new roles of services as a value- add to commoditized software, and new businesses and pricing models. The overwhelming consensus was that software-as-a-service is where the growth is today. Speakers pointed out some of the most successful companies in terms of generating revenue like WebEx, Amazon, Google — all service-based. At the same time they do not see companies that have built their business around software like Oracle, SAP, and Microsoft going “down-the-tube” just yet. In fact Oracle already has Oracle On-demand, a very successful service solution while supporting their enterprise installed customers. Companies that have these installed applications will not find it easy to change to a service-model, even it they wanted to. It requires architectural, economic and cultural changes and requires a ten-year time table to move from an installed software model to a services model. It seems much easier to start from the ground up like Salesforce.com.