One of the smartest technology quotes I ever heard came from Bill Joy, one of the founders of Sun. He said innovation happens elsewhere. The problem companies like Microsoft have is that theyre so big that they stop paying attention to those elsewheres, forced instead to focus inwards, Dortch said.
Thus, instead of being an early mover in the cloud, Microsoft had to spend its time and resources maintaining and updating Office, Windows and a slew of other existing applications. Of course, this doesnt mean you can count them out when it comes to new technologies.
First-movers are rarely the winners in the tech innovation game, but when the competition comes from other deep-pocketed companies like Google, it could put Microsoft at a disadvantage.
(Microsoft did not respond to requests for an interview in time to get their point of view into this story.)
Another anchor weighing down Microsoft is its outdated licensing model. Businesses are tired of being locked into the expensive, shrink-wrap, per-CPU licensing model.
Theres a lot of pent up hope in the enterprise that new software purchasing or renting models will arise. Google is considered an instrument of change, Dortch said.
And its not just Google. Salesforce.coms AppExchange, Apples App Store, and, yes, Googles App Marketplace all provide function-specific apps and add-ons that are not only easy to pay for, but also easy to dump if you dont like them.
In fact, many analysts believe that Googles success will come with SMBs that arent locked into the Microsoft world. That may be true, but plenty of newer companies are deciding to hitch their wagons to Microsoft.
Leaf.ly, a company founded a few short weeks ago, looked at Google, Amazon and Microsoft and decided to go with Microsoft. Leaf.ly has sets its sites on being the Yelp of medical marijuana, and you would think that a progressive company like Leaf.ly would be hesitant to embrace a status-quo provider.
But that is exactly what Leaf.ly did. They selected Windows Azure and a cloud-based version of SQL to host and manage their website.
Google is appealing cost-wise, but we saw benchmarks that show it choking at very large scale, Scott Vickers, co-founder and engineer with Leaf.ly. For a brand new company, thats a pretty optimistic reason to choose Microsoft. More importantly, though, Microsoft had launched a program that appeals to startups like Leaf.ly.
Leaf.ly was accepted into Microsofts BizSpark program, a program that drives down costs and delivers other benefits like community support and access to software they probably couldnt afford otherwise.
BizSpark is just one of Microsofts efforts to push back against challengers like Google. The fact that startups like Leaf.ly are being won over by such programs shows that it would be foolish think Microsoft isnt a strong contender.
Here Google has an even bigger advantage over Microsoft than in the cloud. While Windows Mobile has been confined to a small corner of the market, Android has been threatening the likes of Apple and BlackBerry.
Smartphones are a major part of the story, Sheth of Google said. But its not just smartphones, but other post-PC devices, such as netbooks and tablets. Whats the least common denominator for all of these devices? The browser.
While Explorer may be the browser of choice for most people, well ahead of Chrome, Googles worldview is predicated on the browser. And Google believes, to update an old saying, that all browsers lead to Google.