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Why Google Is Bill Gates' Nightmare

The search engine company is about to get the capital to reinvent personal computing and leave Microsoft in the dust.

By Jay Currie, 18 Aug 2004, TheTyee.ca

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The Google IPO is ready for launch. Granted, the Internet software giant has scaled down expectations some, lowering the predicted price of shares from as high as $135 to as low a $85. And 7 million fewer shares will be sold, down to 19.6 million.

Still, that ain't chump change. Google now will have the capital and the profits needed to take on the Microsoft empire. The battleground is right here, the Internet.

Battles of old

Owning the desktop was the cyber goal of the 1990s. Microsoft won. Windows, awful as the early versions were, simply rolled over competing operating systems like the Marines through Najef. In Windows' wake Word, Excel, the horrors of Power Point and the various, bug ridden versions of Internet Explorer infested PC's worldwide.

Nothing, it seemed, was big enough to take on Microsoft. Apple was relegated to the computing Galapagos where it grew into strange, highly adapted forms with its own processors and software which did not provide the blue screen of death. Apple products dropped out of the main evolutionary path of the PC.

Linux began a direct assault on the shrine of DOS/Windows. The holy of holies, the operating system was strafed, undermined and generally laughed at by the adorable Penguin brigade. Linux is touted as open source, which it is, and free which it is sort of. The problem being that you have to hire your own geek or have a handy twelve year old, to actually get the thing to run on a PC. Linux developers traded off user friendliness against stability. No question, Linux is damned stable and about as user friendly as a porcupine. Redmond was annoyed at losing some of its internet server business and having to compete against "free" in the corporate sector; but the Linux threat barely registered at the consumer end of the market.

Gmail portends revolution

Microsoft's biggest weakness is that it did not quite "get" the internet. For a while there it looked like Netscape would "own" the browser market. But Microsoft roared back and held 95% of the browser market by early 2004. However, a shift may be happening. The Guardian reports that, for the first time since 1997, Microsoft's share slipped slightly: from 95% to 94%. It's unlikely Bill Gates is losing too much sleep at this point.

What may be keeping the folks at Redmond awake is the combination of factors which may make browsers the de facto operating and application systems of the future. Owning the dominant operating system for PCs has given Microsoft the whip hand in the first twenty years of personal computing. But what if the operating system ceases to matter much?

Gmail, the Google email appliance, gives its users one gigabyte of storage space. More than they are likely use for all their purely text email. Bought in bulk, hard drive space now costs literally pennies a gigabyte and the Adwords driven revenue model is likely to cover the hard costs of the service. For the moment Gmail users cannot access that Gig directly, it is only for email.

What broadband makes possible

Now, imagine that Google includes full featured word processing. (At the moment I can't even figure out how to do italics; but that will certainly change.) And a printer interface. And a spreadsheet. And instant messaging. And a 5 Gig "working disk" which a user can "see" and use to store whatever data the user wants to. (Over at Google subsidiary Blogger.com, blogs have unlimited diskspace and a very reasonable word processor…hmmmm.)

Five years ago, while providing this sort of suite and storage would have been possible over the net, it would have been expensive and a bit pointless because the average connection speed topped out at 56K. Editing a letter would take forever. Now, with the relentless march of broadband, text and relatively small graphics, can be accessed remotely without much lag.

It is not too difficult to imagine Google offering such a suite and giving users a remote virtual hard drive to store their material all as part of their Gmail service. It is also not difficult to imagine Google optimizing its offer for non-IE, open source, browsers. It would, of course, still work with IE.

Supported by the Net

In principle you would still have to have an operating system on your machine to keep your local drives and programs running; but that system would be increasingly irrelevant to the actual operation of your computer. Essentially you would turn your machine on, be connected to the net and use the Google provided programs throughout your working day.

Running a word processor or speadsheet over the net does not, in fact require much bandwidth if the documents are actually stored at the remote location while they are being worked on.

Microsoft led the way by using Explorer as a means not only to navigate the Internet but also the storage and programs on the user's own computer. However, IE has not been significantly upgraded since the arrival of Windows XP and has not really been optimized to take advantage of the increases in speed offered by broadband.

Hardware to become free?

The key link, and one which is presently missing from the browsers which compete with IE, is the seamless integration of local and remote hard drives and the programs they contain. Essentially, for the remote application idea to work well, a browser would have to "see" all of the storage media to which a given computer has access and the programs stored on those drives.

"Bill Gates and I agree,"  Sun Microsystems COO Jonathan Schwatz told Reuters, "that within four to five years hardware will be free."  Hardware would be given away free in exchange for a commitment to use particular software which would cost something. However, matching the Adsense revenue model with a basic suite of programs would mean that the software was effectively free as well.

Ben Hammersley's Guardian article suggests this sort of remote computing would be fine for the routine tasks like word processing but would not be suited to graphics or video where files are large and processing requirements are significant. Likely he is right for the moment. However, while graphic designers will want their own high powered boxes, the rest of us who have simpler requirements, may well be able to use online services. If the advertising revenue model were used the remote software would be effectively free, (imagine a company which offered to print photographs from digital files - they would sure want to be on the page where you accessed Adobe Red Eye Corrector).

Google browsing for a browser?

Google - in either its search or its news mode - is fast becoming the "home page" for millions of web users. However, Google does not actually control the browser which brings the user to the page.

With the flotation of the Google IPO and the experience Google has gained owning Blogger and inventing G-mail, Google has the option of entering the browser market either by building a better browser or cutting a deal with Mozilla the open source foundation which took over the Netscape/AOL browser and is fast becoming the browser of choice for the computer literate.

A Google browser, perhaps a flavour of the delightful Firefox, could be cross promoted with Blogger/Gmail and the Google search engine. That power of cross promotion, which is not quite a match for the MS monopoly, could put a Google endorsed browser into contention to begin to pick up significant market share. It wouldn't hurt that Firefox is standards compliant and about half again as fast as the latest flavour of IE.

Content will be king

For the consumer all of this is good news. When the competition really heats up free may not be good enough. Inducements, up to and including cash for using a particular system as well as free software and hardware, all make sense if the objective is to bring viewers to content. The consumer's time and attention becomes the thing which Google and its competitors are going to need to make their advertising revenue models work.

For content providers - like The Tyee - the news is even better. While there are millions of websites there are very few that have quality content consistently. For Google and its competitors, owning the advertising on the top sites in particular markets is critical. While the current Adwords model pay a small amount per click, as competition intensifies there will be increasing incentives to "own" the space on popular websites.

Quickly, and the web moves very quickly indeed, the seemingly impregnable Microsoft empire is looking vunerable to challenge. Google man may be the next stage in the evolution of Homo Sapiens which people have been speculating about for years. Late nights in Redmond I suspect.

Jay Currie is a Galiano writer whose writing and blog is at www.reviewing.blogspot.com.

  [Tyee]

19 Comments:

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  • Tha Geek (not verified)

    7 years ago

    'No one will need more than 637Kb of memory for a personal computer' - Bill Gates

    Expect to find Bill's other quote about free hardware listed under the memory quote in the near future

    "Redmond was annoyed at losing some of its internet server business and having to compete against “free” in the corporate sector"

    Acutally that should read all of it's internet server business, or at the very least most. Oh yes, and shouldn't that read losing not "loosing"?

    Overall an interesting article with many predictions which I personally don't agree with. Hardware will not become free in the immediate future (I'll predict at least 50 years of paid for hardware), besides it's nearly free already with the price of a computer coming at under $300 in Vancouver. A few reasons are that hardware development has not and will not slow down for a long time (read up on Moore's Law), and we need faster and more capable computers not computers which are less capable. As computers begin to replace other appliances in our lives, televisions, telephones, magazines and newspapers they will need to be more powerful. Furthermore as services like telephony and banking are integrated into home computing security will become a more important issue, extra security requires a more powerful computer algorithms are resource intensive. Never mind other technologies which the general public is desperate for such as: handwriting and voice recognition that works, and (all the way back from the early 90's popularity) virtual reality.

    I would argue that it's more likely that software (especially Operating Systems) will become free, or close to being free. Disagree? Look at the growing popularity of Linux, as well look at how Microsoft has been bending over backwards to cut costs on it's OS when large customers threaten to move to open source.

    I think if you look at the past of information technology and you see things like IBM switching it's business model you get a more accurate picture of what might happen. I see Microsoft as eventually offering a personal version of windows at a very nominal cost and then selling you web services in the form of monthly charges, this would also cut down on software piracy.

  • Peter Tupper (not verified)

    7 years ago

    Netscape (remember them?) used to talk about applications delivered over the Net. There was a time when Netscape looked like it was ready to take on Microsoft. But we all know what happened to them....

    Hi-speed will definitely become cheaper and more available, so apps-via-network is certainly a possibility. However, I think people think of their computer, and the storage and applications on it, as theirs. They don't like to give up the soverignty of their hard drive.

    I think it will be a few more tech generations before people are totally at home with the idea of non-localized computing (i.e. your data is stored on some distributed network, and you bring in various apps to work on it.)

  • Jay Currie (not verified)

    7 years ago

    Peter, I am inclined to agree with you on the current status of non-localized computing simply because the current network speeds are still not up to the job. However, not only will broadband become cheaper, the "pipe" itself is likely to get bigger. The soverignty of one's hard drive already is vanishing with apps like blogs and photosharing. As well, anyone with a website is likely to be serviing it from someone else's hard drive. But the change will be gradual.

    Geek, brand new screaming fast hardware is unlikely to be absolutely free for a while. However, three year old hardware is now becoming an industrial waste problem and the Celeron 366 - please don't die laughing - which I write on should, by rights be at the bottom of a landfill. Moore's law creates a massive computing overcapacity for the average, non-game playing, user. While I would love to have a 3Ghz P4, I don't really need one.

    Working handwriting and voice recognition software would be grand but not essential. Or at least not for most users. But I agree that with VoIP and banking security will be critical.

    What I think will be fascinating is the interplay between the larger player's business models. And the one thing which I am really encouraged by is that there is every chance the end users will benefit. A lot.

  • Tha Geek (not verified)

    7 years ago

    Hey Jay I would never laugh at your Celeron, in fact my main system is way off the bleeding edge as well (Athlon XP 1700+, overclocked of course, Ge-Force 4 Mx400, all very far off the current equipment). Personally I see the integration of television and computers as being a major need, I have many clients who want just that. Why have a DVD player, a Tivo, An LCD without cable, and a television and computer in the same room. There needs to be some integration and this requires substantially more horsepower, even a P4 3.0 might fall flat on it's face. As well newer and advanced processors will lead to better operating systems, your Celeron probably won't run Windows XP very well but that is definitley the most superior Microsoft product available. I think there are a lot of possibilities that we can't even dream of, hopefully the move to 64-Bit processing is going to kickstart some major software development.

    Also I know that voice and handwriting software is not necessary but it would help many people, I think that the mouse and keyboard is such an arcane interface and I meet very few users who know what the right mouse button does!

    Thanks for responding to our comments, it's something I wish more of the authors on this site would do.

  • billy pilgrim (not verified)

    7 years ago

    content will be king? i remember when convergence was the future, it cost me a few dollars. right now i think anti-trust, the sec and a man called spitzer are mr gates biggest concerns. with a genuine competitor, maybe mr gates will have an easier time skirting around the anti-trust laws.

  • bk (not verified)

    7 years ago

    Tha Geek wrote: Acutally that should read all of it's internet server business, or at the very least most. Oh yes, and shouldn't that read losing not "loosing"? Actually, Geek, you spelled "actually" incorrectly. And, no, it should not read "it's," which is a contraction for "it is." "Its," the neutral, third-person, possessive pronoun is the correct word here. I'll give you a point for catching "losing/loosing" but really, there's nothing I find more irritating than someone who really doesn't know the rules trying to show off and correct a writer's grammar. You'll have to at least research the basics before attempting such a venture. Okay, I win. I'm the real geek here, sigh. Interesting article, Jay.

  • Tha Geek (not verified)

    7 years ago

    Well Jay I don't think that spelling and grammar matter so much in the comments section, but when your a contributing author it's a different story.

    Anyway I just read that Google will start off at $85 a share. Oh boy what a deal! I can't wait to buy as many as possible, how long until that price is at the $20-$30 range?

  • Rob, Q (not verified)

    7 years ago

    Thanks, Jay, I enjoyed your article. It made me think. I agree that the MS empire is being challenged, but it's not Google that will ultimately bring it down, it's the products that arise from the culture of free sharing growing across the Internet that're gonna do it. Granted, Google is in a position to do so now, and they can keep doing so if they continue to tap into this undercurrent. Indeed, Google is free, and the options you describe as potential drivers for Google's success include the idea of free. But, no company can put a trademark on that.

    For me, and many others, free is the only way to go. I read this article using a Mozilla Firefox browser, supported with a Linux OS on an Apache HTTP Server. I “donate” small amounts of money to open source softwares, like Apache, Linux, spyware and anti-virus scanners, Open Office, etc. and try to contribute with bug fixes, or at least with detailed bug reporting. The only thing I truly "pay" for is a reliable e-mail account with a huge storage capacity.

    Frankly, free has benefited me immensely. It has given me knowledge power. Free forces me to learn a lot about computers and the Internet. And the more I learn, the more unnecessary Microsoft's costly point-and-click solutions become. This is interesting because Microsoft's success to date is due to the fact that they are philosophically opposed to the idea of free.

    Anyway, I agree with Tha Geek, even though he can't spell - ha, ha, ha. Software will ultimately have to be free. Interactive communal software / information usage on the Internet is being embraced by the younger generations, and I would strongly hope that it is common when my two little kids are at the age when computers become tools to them. Following this thought through, it seems to me that the only things that might cost them something in real dollars are those which are difficult to physically share, such as monitors and keyboards, etc. And I sure hope they're not Microsoft products.

  • Doug (not verified)

    7 years ago

    Jay, I can see how Google might move into the application-service-provider space, using GMail as a springboard to the provision of other apps, and I can also imagine a free service, supported by adverts, but I don't see how Google is particularly situated to 'reinvent personal computing', any more than Sun Micro (remember 'the network is the computer....'?), MSN/Microsoft (.Net and apps-by-subscription), or anyone else prepared to move into the ASP space, say, using Java and Web Services.

    Broadband, (virtually) limitless storage, and a free, advert-supported service are only part of the equation. It also requires killer apps; where are Google's?

    Granted they have the best search/indexing techniques; they have massive amounts of storage in their Web-mail; they provide a remote Blogging service a la Radio Userland or Typepad; and they offer some Web Services APIs to make use of their indexing algorithms. But I think it's a bit of a leap to say that they're poised to lead a revolution that takes us away from the desktop as we know it.

  • shirin (not verified)

    7 years ago

    Jay took the words right out of my mouth regarding the industrial waste making toxic mountains of archaic hardware which is giving many landfill and environmental handlers a headache (literally - from all the heavy metals seeping into our land and water systems). I can guarantee that product stewardship will come far sooner than free hardware. Software will be the thing that will more sooner than not lose market value - since, as it is already - the high rate of piracy makes it virtually free for anyone who is smart enough to have a "geek" as a friend. We, the consumers, may think we are the winners, but as dependency of our every move - from schedules, to bank accounts, to contact with friends becomes entwined with the "web" of life - we see who really holds the power.

  • Ron (not verified)

    7 years ago

    There's some interesting "google is creepy" material here at: http://www.google-watch.org/ I am not sufficiently versed in -- well, in anything, but especially in computalk -- to discuss this but maybe some of yous guys is.

  • Tha Geek (not verified)

    7 years ago

    Wow interesting link Ron, I haven't read it all yet but I will. If anyone is interested they should also check out this link:

    http://www.tomshardware.com/business/20040802/index.html

    An article about hacking using google and some of the secret commands, maybe by now the Black Hat security website even has the complete lecture as download.

  • Jay Currie (not verified)

    7 years ago

    Great comments!

    In many ways I think the difference between Google and MS is generational. The folks at Redmond see millions of individual computers, at the Googleplex they see a network with millions of different nodes and needs.

    From that difference in generational vision I suspect the killer apps will arise. And part of their killer status will be that they will be free or very nearly free.

  • Sean Hurley (not verified)

    7 years ago

    I think you are a bit hard on Linux and give too much credit to 12-year-olds. I use Linux. Mandrake 10, exclusively on my home computer. It installs like a charm and when I plug in my USB camera, an icon appears on the desktop. I added a TV Capture card and had it working in a single reboot. Let's keep in mind Linux is only 10 years-old and is advancing by leaps and bounds. But to the main topic ... Microsoft faces two amin challenges. One is Google as a portal and as the first place many, if not most, Internet users go when they are looking for something. The second is Microsoft itself. Returning to the digital camera, think for a moment about those flash memory cards they use. Right now, you can buy one that will hold a gigabyte of memory. PC BIOS'es, that part of the computer that tells the system what devices are attached and how to use them, will now support booting from flash memory cards. Now let's rush ahead five years. Imagine walking into a hotel, entering a phone booth, removing your flash memory card, plugging it in and suddenly you have your operating system, applications and documents. You are connected to the Internet with access to your email, your office server and everything you require to work. It is coming. But it will depend upon an operating system that is hardware independent, that can identify and configure hardware on the fly, and offers a portable license. That, is Linux, the much maligned operating system, or BSD or Sun's new Java Desktop, also residing in Linux. I too have thougnt and believed the browser will become the desktop, the browser can only ever be an environment as is Windows or Gnome or KDE or a Mozilla/Gnome partnernship which is being discussed as detailed in the following article: http://news.com.com/2100-1032-5201325.html The world is changing and it will be open.

  • Ken Moren (not verified)

    7 years ago

    Hi Jay, You wrote: "Linux is touted as open source, which it is, and free which it is sort of. The problem being that you have to hire your own geek or have a handy twelve year old, to actually get the thing to run on a PC. Linux developers traded off user friendliness against stability. No question, Linux is damned stable and about as user friendly as a porcupine." I echo Sean's comment about you being too hard on Linux. Have you tried any of the recent versions? Get your hands on a "Knoppix" CD and boot off that. No need to even install it, it runs right from the CD, complete with apps & everything. As long as you have 128 MB RAM or better you're good to go... you don't even need a hard disk at all. It is very good at recognizing most PC hardware and configuring itself accordingly. It even recognized my TV card, which surprised me. Find it at: http://www.linuxiso.org/distro.php?distro=44

  • Sean Hurley (not verified)

    7 years ago

    I said five years, right?

    FLASH: Introducing GlobeTrotter! It's fast, it's light, it's slick and it's a complete Linux system on one mobile hard drive... You may already have a mobile phone, a laptop, a PDA, a calculator, a tablet PC and a portable paper shredder, but there's one thing you've been missing, and that's a light, inexpensive, yet powerful mobile Linux system. Mandrakesoft's new GlobeTrotter, based on the LaCie Mobile Hard Drive designed by FA Porsche, is a USB mobile hard drive loaded with a specially tuned version of your favorite Linux distribution, and it's the missing piece in today's range of mobile systems. GlobeTrotter gives you a complete Mandrakelinux system and 30 GB of user data on one beautifully designed and fast LaCie hard drive. Using it is child's play : plug it in whatever computer you have at hand, and turn it on. All your hardware is detected and configured automatically - just sit back for a minute, and get ready to experience GlobeTrotter. It has all you've learnt to love in a Mandrakelinux system : ease of use, stability, speed, fun, and the power you need to get real work done. If you wish to learn more about GlobeTrotter, please visit: http://www.mandrakesoft.com/products/globetrotter

  • Anonymous

    7 years ago

  • Sean Hurley (not verified)

    7 years ago

    I said five years, right?

    FLASH: Introducing GlobeTrotter! It's fast, it's light, it's slick and it's a complete Linux system on one mobile hard drive... You may already have a mobile phone, a laptop, a PDA, a calculator, a tablet PC and a portable paper shredder, but there's one thing you've been missing, and that's a light, inexpensive, yet powerful mobile Linux system. Mandrakesoft's new GlobeTrotter, based on the LaCie Mobile Hard Drive designed by FA Porsche, is a USB mobile hard drive loaded with a specially tuned version of your favorite Linux distribution, and it's the missing piece in today's range of mobile systems. GlobeTrotter gives you a complete Mandrakelinux system and 30 GB of user data on one beautifully designed and fast LaCie hard drive. Using it is child's play : plug it in whatever computer you have at hand, and turn it on. All your hardware is detected and configured automatically - just sit back for a minute, and get ready to experience GlobeTrotter. It has all you've learnt to love in a Mandrakelinux system : ease of use, stability, speed, fun, and the power you need to get real work done. If you wish to learn more about GlobeTrotter, please visit: http://www.mandrakesoft.com/products/globetrotter

  • anonymous (not verified)

    7 years ago

    http://www.archive.org/web/web.php

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