Thursday, June 20, 2024

Microsoft vs. Apple vs. Google: Inside the Battle Royale

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Technology in the next two years will likely be defined by big battles between major tech companies.

HP vs. Oracle vs. HP is one such battle. AMD vs. Intel vs. NVIDIA vs. Qualcomm is another. Yet the battle we’ll likely be the most focused on – because it involves personal devices – is the one between Microsoft, Google and Apple.

Each firm has its own unique advantages, disadvantages, and strategy. So I thought it’d be interesting to map out what these firms bring to the table and the likely outcome. All three vendors are essentially equal in liquid resources so I’ll discuss where they’re different in goals, weaknesses and strengths.


Goals: Apple’s goal is very focused on monetary success. They optimize on margins and intend to have the greatest profit in their segment. They are willing to sacrifice market share to achieve and maintain this goal and are singularly focused on it.

Advantages: This focus is their greatest advantage but they also are the least complex of these companies and have the most loyal customer base. Quality tends to lead the segment and they currently are the only vendor that executes a marketing driven strategy.

In other words, from cradle to grave the product is designed to be easy to sell and is thus consistent with their primary goal. Finally Apple has the strongest retail channel in their class with their own well regarded stores containing internal post-sales support, Genius Bars.

Disadvantages: Apple, as it currently exists, was designed to be uniquely managed by Steve Jobs. Jobs was an introverted, charismatic, micromanager. He touched most every critical part of the company, performed the roll of “super user” (operating like a permanent focus group with authority to have its needs met), and he had the unique power of a founding CEO.

He has left this job and Tim Cook, the CEO that replaced him, was selected because his skills offset Jobs – not because he was identical. Apple is already bleeding top people who are following Jobs out the door. It needs to be restructured to better match Tim Cook’s skills or needs to hire another top executive to full Jobs role. Neither is likely near term.

Apple lacks the partnership scope of either Google or Microsoft and is hardware-centric, which means it carries relatively high product costs. Finally, Tim Cook’s first major decision was to reinstate Apple’s charitable giving campaign. This will increase its costs but have no inherent competitive advantage and is likely to anger Steve Jobs, limiting his willingness (assuming he is still able) to help.


Goals: Google’s goals appear somewhat unfocused and in conflict. They are trying to hold dominance on Internet advertising revenue, cripple Microsoft and Apple, and prove they can contribute beneficially to the world at large. Profit, valuation, and company survival appear less important and subordinate goals.

Advantages: Google dominates Internet advertising and Internet search. They also have the leading mobile platform (in terms of market share) in smartphones. They operate under a largely free model which frees them, generally, from concerns surrounding revenue from most of their activities.

Their work environment is considered to be the best of the three companies, more comfortable than Microsoft, less frightening than Apple. They are still led by their founders, who are deeply respected by the rank and file employees. They have a large number of partners, which gives Google a combined strength second only to Microsoft.

Disadvantages: Google lacks tight focus and appears to have a very short attention span. This makes it nearly impossible to focus the company on any of its goals.

Google’s goals are also conflicting, causing them to underfund their various efforts and contributing to their very high number of failed initiatives and products. Their free model contributes to this underfunding because it makes each effort a cost, rather than a revenue center.

Their executive leadership and employees act inexperienced, often repeating basic mistakes made by their competitors, and the company has been bleeding talent while valuation has been relatively flat next to Apple.

The worst for Google is coming under review for anti-competitive behavior and reacting to government challenges, arrogantly mirroring Microsoft’s mistakes in the late ‘90s and likely resulting in significant future government oversight and fines.

Currently they are addressing a severe lack of an intellectual property defense. Building that defense resulted in their buying Motorola and putting their Android licensees at high risk (currently Samsung and HTC are rumored to be looking to buy an operating system).

Finally, Google is attempting to penetrate the enterprise with generally negative results in what appears to be a mirror of a similar attempt by Netscape, which contributed heavily to the destruction of that company. This is particularly ill-advised because of Microsoft’s entrenchment and home turf advantages.


Goals: Microsoft appears to be maximizing valuation and working to increase its position relative to competitors’, particularly Google.

Advantages: Microsoft maintains a dominant or leading position in PC operating systems, personal productivity applications, gaming systems, servers, corporate email, and browsers. Microsoft’s partner relationships are the strongest in the segment and they have the strongest penetration of embedded systems of these three vendors.

They are deeply entrenched in most businesses and homes, making them relatively difficult to displace. And their user interface, Metro, is arguably the most advanced.

Disadvantages: Their goals are in conflict and the company is both massive and complex, making it almost impossible to manage successfully. Valuations have been flat to declining and key employee retention has become a major problem for the company.

Executive leadership has focused excessively on cost reduction, which tends to contribute to a history of uncompleted and poorly marketed offerings. They have nearly lost their leadership position on browsers, are losing leadership on desktop operating systems, and have lost share on smartphones against gains by both Apple and Google due largely to this lack of focus and underfunding.

Over the last decade, Microsoft’s CEO has become increasingly isolated from the company and has had to fire a number of top executives for cause, possibly including attempted corporate coups against him.

Finally, their most costly battle, against Google – largely using their Bing service – appears ill-advised given its cost and Google’s home turf advantages.

Bottom Line: Who wins?

Apple is in by far the best shape due to the fact they are the most tightly focused and least complex of the companies. This makes them more agile.

However this agility is offset by a broken executive leadership due to Steve Jobs’ departure. And the company is measured not just on good results but on outstanding results, which they may shortly (within the next 12 months) be no longer able to achieve.

This will put pressure on the board to replace the executive leadership and Jobs, who will see the recent charitable giving decision by Cook as a personal affront, will likely move to replace Cook. This disruption and conflict will further weaken the company. Apple needs to either replace Steve Jobs’ unique skills or change the company so his skills are no longer needed. Otherwise they will face a long slide from their current position at the top.

Google is in the second best position, largely because their advertising revenue is not yet being challenged by Apple and Microsoft’s efforts are still not doing the firm significant damage.

However they face an increasing likelihood of regulation and their Android partners are becoming increasingly disloyal. They are consuming massive amounts of capital on what appears to be non-strategically aligned efforts. These efforts are contributing to their underfunding other efforts and search could, as a result, become vulnerable to the coming wave of targeted applications (Facebook etc.).

Finally, their inexperienced executive management is one mistake away from an avoidable catastrophe that could take them out of the fight. Google needs to focus and decide on one clear set of interlocking goals and begin showing some maturity by avoiding obvious mistakes and fully funding initiatives or its best days will be behind it.

Microsoft is the only company bleeding dominance in areas where they have it significantly. This suggests they need to move to a protect strategy and shift resources to either protect their core products or restore market share for them.

Most troubling are the smartphone and browser products which have been bleeding share badly and remain massively underfunded against this critical threat. However, tablets have started to cut sharply into Windows share as well and the loss of dominance in all three areas would be a critical strategic loss to the firm representing tens of billions of dollars in revenue and profits.

Both Windows 8 and IE 10 are very competitive, but the core issue is one of leadership, focus, and funding. And if that issue isn’t more effectively addressed Microsoft will continue to lose strategic battles to both Google and Apple.

Microsoft’s executive leadership needs to step up or step out before these dominant leadership positions are lost. Otherwise they may be lost for good and Microsoft will slip into a steep decline.

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