Google, Intel, Microsoft: Daring To Think Beyond Recession

The tech giants are using their considerable resources to continue to build during this downturn, making their eventual position all that much stronger.
Posted February 10, 2009
By

Rob Enderle

Rob Enderle


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With all of the doom and gloom out there I thought it would be interesting to put up a counterpoint on how three of the most powerful companies in tech are taking this opportunity to invest in their own future in vastly different ways.

For Intel it is accelerating down a technology path that will result in much faster, efficient, and more profitable processors, and for Microsoft is about opening the doors and doing what companies rarely do, licensing out the crown jewels. Google is thinking way out of the box and investing in the Electrical Grid, which could not only provide huge savings for consumers but give them an uncatchable lead in the advertising space they dominate.

All three paths are incredibly difficult in these hard times yet will be critical to ensuring each firm’s future in the market.

Google and the Grid

The idea of being able to monitor appliances in homes is not a new one. But Google's announcement effectively helps make promised result a near term reality. The promise is that a power utility or a consumer could turn off appliances remotely during times of low power or when not needed and reduce dramatically the peak load on the electrical grid, dramatically reducing the need for more power plants and potentially reducing significantly the cost of power to consumers.

The problem is that the companies who build the appliances have to absorb most of the related costs and someone else currently gets all of the benefits. Typically this would mean that the government would have to provide subsidies but the US government is already spending vastly more than it is taking in. And while power is a priority, power management doesn't appear to be yet.

Given that most appliances are built offshore, the promise of selling more of them to implement the technology isn't that compelling to the government.

In the mean time we also have a large number of competing technologies, which typically means there won't be a standard to deploy for years, if not decades. Enter Google, which is throwing its considerable power behind the effort.

The search giant believes that things like this can be made profitable and once the appliances are implemented the end result would be an unprecedented amount of long term data on the age and condition of appliances in homes, what people are buying where, and highly region-specific information on usage patterns (when folks watch TVs, when they do laundry, when they do dishes, etc.).

This information will result in the ability to target ads in a way that simply couldn't be matched and make Google billions.

Who says you can't make money saving the world?

Intel Invests in Its Future

While a lot of companies are cutting back on capital spending, Intel is going full steam ahead with its next generation of technology, code named Westmere. It’s coming out with of a number of brand new FABs that are under construction. The end result will be a technology base that could be as much as two generations ahead of its nearest competitor, and user benefits that will include improved performance, battery life, and integrated graphics.

The 32nm (nanometer) technology came much faster than expected; 45nm is the state of the art and making the jump is far from trivial. We didn’t think Intel, or anyone else, would get this working for a long time in the future. The benefits to this smaller die size include performance, cost, and power efficiency. Intel plans to introduce these parts by year-end 2009.

Coupled with its market-leading flash drives and alliance with Citrix, it’s driving significant change into their chosen market. To do this they are countering the worldwide trend to slow down and conserve cash. Breaking this trend isn't easy. Some might even call it heroic.

This is like a runner who, watching the rest of the race slow because a food stop was missed, speeds up and is so far ahead when the next refreshment stop is reached becomes uncatchable. It's a risky, gutsy move, but one that should help assure Intel's future dominance in their chosen segment and allow them to accelerate into the next decade with a powerful advantage.


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Tags: Google, search, Microsoft, consumer, Intel


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