The heavyweight clash: Microsoft vs Google

The heavyweight clash: Microsoft vs Google

Microsoft and Google have become rivals in the mobile space as enterprise makes a u-turn away from desktop PCs and onto handheld devices.

New technology has allowed the two companies to move further into mobile, and could mean a total change in the way businesses work in the future. Two weeks ago, Microsoft announced an alliance with Nokia that will allow users to access Microsoft Office desktop apps on their mobiles.

One week prior to this, Google launched a new campaign on the Google Apps homepage that called on businesses to: ‘Join the movement. Spread the word. Go Google.’

The ability to access an online ‘server’ through an applications provider such as Google is called ‘cloud computing’. Google and Amazon are the only big companies that do this currently, but with Microsoft now on board with its own mobile offering to come, competition could reach boiling point.

However, while Google claims 1.75 million businesses are using Google apps, a recent survey found that 92% of IT decision makers support Microsoft.

The two companies have totally different strategies. While Google makes money from advertising, Microsoft charges a licence fee for its documents, such as Excel, and Nokia will probably have to pay that licence fee, which it will pass on to the consumer.

Google is currently orientated towards the consumer, but is in a strong position to expand in enterprise.

CCS Insight analyst Geoff Blaber says: ‘Microsoft charges a licence fee. With Google, software such as mapping has become commoditised and is developed to make money from premium services.

‘Google is not monitising the customer, but the fact that it has so many customers means it could go in and find enterprise advertisers. Google becomes stickier to the end user.’

Direct challenge
At the time of the Microsoft/Nokia deal, it was clear the move was a direct challenge to RIM. Nokia is doing what it does best – producing strong, high-end handsets for the mass market. It also gives Nokia device management, which RIM is very strong on.

Blaber says: ‘Microsoft is under significant pressure from the different business models that Google has. It needs to protect its products, such as Office and Exchange.’

Industry experts believe that mobile working is growing, but few people are going to spend a huge amount of time working from a handset just yet. This is the new opportunity that Nokia is trying to target.

One manufacturer source says: ‘Everything is moving to mobile. If [Microsoft] is to continue to grow its core assets it needs to be accessible from everything, including a mobile.’

Another source adds: ‘Google is a threat. Its ambition will be to develop a continued range, strengthening its position. Look at Android and Google Maps. Microsoft should be very wary in that space. Microsoft has wide ambitions and Google will start to step on it.’

But Google has a far stronger position in search, while Microsoft is currently stronger on enterprise. The manufacturer source says: ‘Essentially, Google is trying to push people online – it is also trying to drag Microsoft into a price war.

Meanwhile, Microsoft has been very focused on business enterprise so far, and the mobile division is very new. Strategy Analytics analyst Andy Brown says: ‘Their previous ventures into mobile have not been a resounding success. It will be a learning process for them.’

He adds: ‘The one thing that is not clear is whether [Microsoft] want to make money. They are both doing things right – their approach to the developer industry has been good.’

Big value players

Brown says that Microsoft is working with big value players on the enterprise side but has yet to move actively into the mobile space. Office mobile will help pave the way for ‘cloud services’.

He says: ‘As far as Google goes – it is very interesting. They have made no secret that they are interested in enterprise, but they lack experience.

‘Google has its work cut out on the business side. We have seen smaller organisations looking at Google but there are issues of stability surrounding the cloud platforms.’

The question is, how serious is Google about enterprise software? Brown says: ‘It’s a different ball game, you need a large sales force and channels to offer customers – it’s a different type of proposition.’

Microsoft is on the right track. It has realised that Windows Mobile is not the answer to all its mobile problems and it needs to partner if it is to be successful.  

Meanwhile, Google is already established but needs to concentrate on optimising the ‘cloud’ model to be a true competitor in the space.

The future of mobile working it seems, will rest on the ability of Google and Microsoft to overcome these problems and offer companies a truly effective offering to businesses. With RIM’s current portfolio, the two internet giants – and Nokia – still have a long way to go.

Americans leading new frontier of mobile    
After shaking off a slightly downmarket image in mobile handset taste,
Americans have pulled away from brands such as Motorola.

Now there are new brands dominating the market – RIM’s BlackBerry, Apple, and soon, computing company Dell.

While the power has shifted to the US, European companies such as Nokia and Sony Ericsson are seeing their power diminished.

Strategy analytics’ head of wireless practice, Neil Mawston, says: ‘The US has become the world’s most important smartphone market and that trend looks set to continue.’

However, the UK has been caught in that fight, which has resulted in
what the industry has dubbed ‘smartphone wars’.  

More operators in the UK are also looking to the US model of exclusive devices, and manufacturers such as Nokia have started to bring out app stores.

Mawston says: ‘The US is now happening over here – things like app stores, QWERTY keyboards, and the touch-screen.’

He points out that although Nokia and Sony Ericsson are starting to fall away, in terms of volume and share RIM and Apple are still niche. He adds: ‘If you look at revenue share and profit share, the US is stronger.’

Written by Mobile Today
Mobile Today


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