Once the stock settles down and finds its trading range, Google’s owners, both public and private, can turn to the real battle ahead—control of the next generation operating system of the network. Just as Microsoft has inexorably expanded the Windows platform to absorb compression, multi-media, the Web, and security from within, Google will expand its search platform to encompass more and more content and data types.
One way to handicap Google is to deconstruct the notion that Google’s intellectual property is bound solely to search. In fact, it’s bound to the emerging platform known as software-as-a-service. Fellow IPO salesforce.com offers a hosted software service, which can easily plug into legacy enterprise systems. The underlying fabric for enabling software-as-a-service is XML Web services, which are commoditizing the cost of integrating disparate hardware and software systems, and enabling a service-oriented architecture (SOA).
A new browser-based services fabric such as Google’s not only makes it possible for companies to avoid the big-ticket costs of deploying applications inside the firewall, but could allow supply-chain partners to take advantage of a common architecture across enterprise domains. Security and application updates are centralized without the need to touch multiple clients, and companies can shift from managing IT as a cost center to developing revenue sources from packaging and syndicating corporate data along the supply chain.
Google’s home-grown infrastructure—a powerful, highly scalable server farm built on standards-based, open code, the virtualized extension of Scott McNealy’s famous big honking Webtone switch--also gives the company a strategic advantage. Google is the very personification of software as a service, with huge brand recognition and a vibrant business model that is rapidly sucking plenty of the oxygen out of traditional media advertising revenue models.
And then there’s Gmail, Google’s beta Webmail project, which is the tip of the iceberg. Right now it’s “just” a free gigabyte of e-mail, funded by targeted ads served up via Google’s Adsense engine. There are no enterprise capabilities yet, no ability to access Gmail via a POP3 or IMAP client, no ability to speak to the Gmail engine via an XML API. But that will come, says the Google founders, who promise users their mail will not be held hostage. “We will make it possible for you to get your e-mail out of Gmail if you ever want to,” Page told Playboy.
Google shareholders are taking that promise to the bank. Once an automated import mechanism is established to move users from Hotmail or Yahoo, the same channel can be used to import RSS feeds. In my conversation with Sergey Brin in April, he agreed that an externally programmable API would be a useful enhancement for enterprise usage, and would likely pose no threat to cannibalizing the ad-serving business. “That's right,” Brin agreed, “so maybe as long as we provide them, people will find them valuable enough that they will enable them regardless.”
Once in the Gmail container, RSS feeds could be filtered according to Gmail’s Conversation view (where related messages are presented in a threaded format) tagged with useful metadata, and organized for sharing with collaborative groups as reassembled and redirected RSS feeds. The API would allow browser plug-ins to format and save favorite searches, create timers for announcing events and project updates, and so on. In short, the Gmail engine could be harnessed to build a collaborative platform for enterprise applications. From there, it’s an increasingly shorter leap to incorporate calendaring capabilities (see David Berlind’s post about RSS Calendar) automated multimedia delivery (see Adam Curry’s RSS-enclosure-to-iPod auto-update application), and connectors to enterprise CRM, SFA, and ERP applications.
Add an intelligent cache that sits between Google servers and the browser, such as the Alchemy framework Adam Bosworth developed for BEA before he jumped to Google, and you have a standards-based, offline storage capability for use with laptops and occasionally connected clients such as PDAs, iPods, and cell phones.
Piece-by-piece, RSS tools and services will work across a range of devices, operating systems, and server platforms, reducing switching costs and taking an increasingly larger bite out of legacy file formats such as Word, PDF, and proprietary multimedia formats.
This is just more bad news for Microsoft, stuck as it is halfway between the proprietary Windows platform and the XML world. To be sure, Microsoft’s dominant Office platform has great strengths, not just in market share but as the focal point for retaining a relationship with the powerful .Net developer community and its legacy Visual Basic crowd.
Word, PowerPoint, and Excel are the default technologies for daily business use. Developers are building small and medium-sized line-of-business workflow applications on top of the Office System platform. Competitors have largely given up attacking Office’s dominant market share directly; Sun’s Open Office is essentially a replacement play when coupled with per-citizen and other commoditizing pricing policies in markets where the Windows/Office bundle has proven vulnerable to Linux.
But Microsoft’s strategic errors with Internet Explorer and Outlook have created an opening big enough for a well-funded tank like Google to rumble through. First, abandoning Internet Explorer development lit a fire under both Mozilla and Apple’s Safari teams, resulting in feature sets, such as pop-up blockers and tabbed windows that improve navigation speed, and the creation of an ad hoc standards base for interoperability on most popular websites.
While IE struggled with security vulnerabilities and a frozen feature set, Outlook struggled with spam and its antitrust-driven separation from browser integration. Though Microsoft poured virtually all of its Office 2003 R&D into Outlook functionality, the company continued to give short shrift to Outlook’s XML underpinnings. The Office 2003 versions of Word, Excel and PowerPoint have the common XML object model (and resulting API) promised developers for “the next version” of every Office release since Office 97, but not Outlook.
That’s too bad, because a little thing called weblogs—and its kissin’ cousin RSS—came along in the meantime. And with this new generation of content came billions of little XML fragments swirling around the network. Not only are blogs and RSS feeds new containers for content, but they are also more efficient vehicles for pointing at information in a timely, event-driven fashion.
Early adopters of RSS aggregators are spending a greater percentage of their time retrieving RSS feeds instead of browsing websites, and shifting their attention from the onslaught of unwanted corporate spam and e-mail newsletters to the consensual contract of the RSS publisher/subscriber relationship.
As adoption of RSS and blogs as enterprise communication tools emerges, a new software category is also emerging. Standalone RSS aggregators on the client, such as NetNewsWire on the Mac and Outlook plug-in NewsGator on x86 machines, let you manage micro-content using e-mail-like, three-paned user interfaces. Like salesforce.com, server-based services such as Bloglines and Feedster are hosted on IE, Mozilla's FireFox, and Safari, requiring no client install and easy upgrading to new services.
Ironically, Microsoft’s dominant browser share is now a millstone around the company’s neck. With Longhorn held hostage behind backwards-looking security updates to Windows XP, Bill Gates seems hamstrung in following through on his interest in RSS. While Robert Scoble and hundreds of Microsoft bloggers have created a transparency impossible to imagine a few years ago, the new-found openness only underlines the fact that Gates and company are caught between a rock and a hard place in refocusing Office away from its proprietary data types and toward Google’s new suite spot.
In moving toward this software-as-a-service platform, Google has some interesting partners-in-waiting—-the carriers and their partners (Sun, Motorola, Nokia), the increasingly Web-focused broadband players (TiVo, SBC, Dish Network) who are circumventing cable and record companies with direct-from-Web downloads to personal video recorders, and micro-content creators (exercise left to the reader.) Add together this loosely-coupled group of companies and their aggregated market caps, and today’s price per share for Google starts to look like a bargain.
