Wednesday, May 19, 2004

The Perfect Storm: How evolving technologies, market changes, and a rising star could kill Windows

This is such a long posting I have created a very short summary to help people determine if they want to read the full posting.

Executive Summary:
Google has the opportunity to utilize evolving technologies (Linux, ubiquitous connectivity, increasing storage capacity, etc.) and market conditions (delays of Longhorn, overshoot of market needs by Windows, etc.) to dethrone Windows.

Full Posting:
Windows’ dominance on the desktop has withstood attacks from the likes of Sun, Apple, Netscape and the venerable IBM. It takes more than just one company or technology to kill Windows; IBM couldn’t do it with OS2, Sun with the networked computer or Netscape with the browser. I believe it will take "the perfect storm" of market conditions, technology changes, and a branded technology company to bring down Windows. I also believe that these pieces are sliding into place today and we are about to witness one hell of a battle for the future of computing.

The last great threat to Windows occurred close to a decade ago when Netscape threatened to reduce Windows to "a partially debugged set of device drivers" according to Marc Andreesen who helped to create Netscape. The idea was simple; the web browser would become the new platform for which all applications should be written. Microsoft made sure that the browser would not become the next generation platform by creating Internet Explorer and tying it to Windows which helped it to gain market share. Once the market tipped to IE, Microsoft had killed any chance of the browser becoming the next generation platform because they made a decision internally to protect the Windows franchise. (For a compelling read about the Netscape / Microsoft battle you should read Breaking Windows by David Bank).

The account above is a rather simplistic look at why Netscape lost the battle. One could argue that Windows 95 was a poor operating system who was in direct competition for platform dominance with Netscape’s browser. Netscape had a window of opportunity (from the Netscape launch until the Windows 98 launch) to out innovate Microsoft and win the battle. The problem was that Microsoft launched their own browser that by all accounts caught up and surpassed Netscape’s in functionality by version 4.0. This inability to win at the browser war closed the window of opportunity.

While Microsoft has proven resilient in defending Windows against competitors, today’s market is different. Today, Microsoft’s biggest competition on the OS is its previous versions. Back in 1995 every computer user in the world couldn’t wait for the next version of Windows since the benefits of upgrading were huge. Today, we have seen corporations and home reluctant to upgrade since they don’t perceive much of a benefit in moving from Windows 2000 to XP. This is an important event since it signals that Windows has overshot the market need for certain attributes. For example, while Windows 2000 isn’t stable enough for everybody, it is stable enough for most users so they don’t see a need to upgrade to the more stable Windows XP, this shows that stability is no longer an attribute driving adoption of new versions of XP and that they have probably overshot the market need for stability with Windows XP. (Note: There are certain attributes like security where Windows is incredibly far behind the market need and therefore they can use security to drive adoption of XP when service pack 2 is released… assuming it fixes all the security issues it claims it will)

While Windows is overshooting the market, Linux is just now starting to meet market needs. While the OS has become more consumer friendly with interfaces like Gnome evolving over time, applications like Open Office (the open source office suite) have started to become real alternatives for users looking for a free alternative to Office. In short, the Linux ecosystem is starting to mature at the exact time Windows is overshooting the market. (while not the first to propose the concept of overshoot or disruption, Clayton Christensen’s book Innovators Dilemma is the must read book on the topic simply because everyone else has read it.)

One of the key issues with the browser becoming the platform back in 1995 was the assumption that we would be connected to the internet at all times. Today the dream of ubiquitous connectivity is much closer to reality than a dream. Verizon is rolling out their broadband wireless technology in markets across the country and it offers DSL like speeds even while driving in car.
These emerging technologies (Linux / wireless broadband) and market changes (Window’s overshoot) represent a unique opportunity for a well respected consumer software company to overthrow Windows as the standard computing platform. It is clear to me that the company best positioned to topple Windows is Google. Google could overthrow Windows in a number of ways: launch a Google branded Linux OS, push the Sun vision that the network is the computer and build the scalable computing and storage network necessary to power the network, or do both at the same time.

Launching a Google branded Linux OS is clearly an important strategic option that Google should be evaluating if not working on already. With Microsoft’s Longhorn rumored to eliminate the browser and integrate search capabilities into the OS, Google must determine how they want to react. Today it was reported that Google would launch a search application for the Windows desktop, but this in my opinion is not a viable long term strategy to fend off Longhorn. I believe that Google knows this and the desktop application they are building will be a part of a Google Linux OS they release and that they want to gather data about usage from users and make switching costs to their OS lower since users will be familiar with a small portion of the OS. (Heck, with Google creating the OS maybe search will be the primary interface). While I have been talking about a Google OS for a long time (my friends think I am nuts for even suggesting it) we know that it is atleast being talked about in Mountain View. Jeffrey D. Ullman, a computer science professor at Stanford University and a member of Google's four-person technology-advisory council, has publicly urged the company to get into the Linux desktop business. In a recent story for BusinessWeek Ullman is quoted as saying: "If Google doesn't reach the desktop, Microsoft will eventually take Google's business, just like it took Netscape's."

Betting that the network will be the computer seems more in line with Google’s current capabilities of creating massive distributed computing networks, but a riskier play. Gmail, Google’s entry into the email market, is a great example of an application that could help shift computing online when ubiquitous connectivity exists. While the complimentary applications necessary to make the network the computer don’t exist today, they certainly could develop quickly if the market was to tip in this direction.

Opportunities to create a dominant computing platform seem to come along once every couple of decades. This is the opportunity of a lifetime for the employees of Google to utilize the rise of Linux, the imminent explosion of wireless broadband access and market overshoot by Microsoft to take the market by storm. I only hope that the folks at the Googleplex recognize the short amount of time between now and the release of Longhorn and that they take advantage of this opportunity to mix the right technologies and market trends to create the perfect storm to knock Windows off the desktop.

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