By 2004 the Internet (or more correctly "The Web") has become a very important part of everyday life, at least for those of us in developed countries. This explosion of connectivity would never have been possible without the PC, which has become indispensible for practically every business and home. It seems that computers are everywhere. Have we reached saturation point? Is there any money to be made for businesses just starting up in the computing industry? Or has every angle been explored on ruthlessly exploited?
To a casual observer it would seem that Microsoft has acheived one of its original goals: "A personal computer on every desk and in every home". It seems to have a farly convincing monopoly on the desktop. Indeed Microsoft is a very successful company, and has worked very hard to get where it is today. Most people who own a PC have one or another of the Microsoft Operating Systems on it and possibly many applications written by Microsoft too.
But Microsoft also has a bad reputation. At corporate level it often appears as a bully. Its business practices in the past left a lot to be desired. It quite often attacks a particular market, usually quite brutally, releasing a product for little or no cost, just to put a competitor out of business. It also releases software which is tied quite tightly into it's operating systems. Why is that a bad idea? Why shouldn't they get some benefit from the special knowledge and work they have put into the OS. They are after all in business to make money, and to make as much as much as possible for their shareholders.
Unfortunately this kind of attitude makes enemies, and can cause ill-feeling in the industry and eventually in your user base. And Microsoft does have a lot of enemies. Bad feeling leaks out, in comments here and there, articles, and eventually it goes round and round and eventually a spiral of distrust and hatred is formed. Not good news for Microsoft. But to be fair they have often not helped this process, some of their products in the past have just not been up to standard, with particular regards to security. Mention Microsoft in some techies circles and sniggers and insults are often traded.
So Microsoft has become a dominant supplier for Operating Systems for home and office desktop use. They have made huge inroads into the server markets, replacing many smaller UNIX based systems. They have entered pretty much every sector of IT and have either made money out of it or squashed all credible competition. But they have done so at the expense of many other companies. And I would argue that their "dominance" is far from total, and that we have not reached "saturation point" for IT. I think we are only at the beginning.
Where is there to go with all of this? Well, Google is a good model of how you can make money even though Microsoft apparently has the market pretty well sewn up. Google is the best search engine on the Internet. Period. Its great idea, which makes it powerful, is that it ranks pages or results depending on how many times a particular pages has been referenced or linked to. The more links, the higher the page rank, and the higher up the page you appear in the results. And the entry and results pages are free of clutter, most of the time no adverts at all, sometimes a few carefully targetted text ads. Very clean, just the stuff you ask for. Google sells ads and targets them precisely to people who are looking for something. They make lots of money.
So soon other companies want Google to search their own websites for them. To find documents in an intranet etc. No problem, Google comes up with a box which does exactly that. Very successful. But Google doesnt stop there, now they acquire the entire newsgroup archives going back 20 years, and give you the ability to search it, plus all the current archives. This is good news for techies, all techies now love Google. It is very good marketing, plus you get to sell more adverts. And all the while Google is ploughing all of this money its making back into its infrastructure, expanding its hardware. By this time it is amassing a huge number of servers, all built from off-the-shelf components, with an Open Source OS to run it all. That clean screen with its simple text box to enter a search and a few lines of links hides a HUGE network of servers with a lot of storage. The users though dont have to think about it, and Google doesnt talk about it. The Google philsophy - give the user what they ask for and no more. Keep the complexity away from the user.
Google then adds Froogle, a search engine for sites that are selling stuff. All the time Google are adding extra functionality without making thinks more complex and still while selling more ad space. The one day Google drops a bombshell. They are giving away a free web-based email account. Nothing new there, everyone has done that. The difference - it has 1GB of free storage. 1GB! Gmail has 1 Gigabyte for each user. Hotmail at the time offered only 2MB for each user, and at the time of writing - at least for my account - hasn't increased it. Plus the fact the Gmail offers a unique - simple - way of managing email that the other suppliers cannot match, along with the sophisticated search that one expects from Google. All paid for by adverts which accompany the emails - unobtrusively but to some people it is seen as a threat to privacy. The only dark side we have seen so far!
Now rumours are doing the rounds that Google is developing an operating system, or maybe just a browser. We have gone in a fairly short time from a company that just did search to a company that is being viewed as the next big competitor for Microsoft. They did it by stealth, by making money in solid core areas, by using advertising, and without being EVIL. They are making money in new and interesting ways, and they are doing it without annoying industry or customers. And also without obviously encroaching on Microsoft's core businesses (although if they realease a browser that may well change..)
So where does that leave us if we want to repeat any of this, to make money from IT? How do we make money now? I would argue that there are areas that computers have not gone yet, or if they have they are small and relatively underpowered at present. We are thinking devices that are smaller than PC's - like PDA's, personal servers, control systems for houses, even web enabled fridges and cookers. And by web enabled I mean they have web servers on them, you connect to them to do stuff, take control, get information. Web services everywhere. That is one area where there is still money to be made. And advertising space to be sold! And to do it you must learn from the mistakes and sucesses of the past, from both Microsoft and Google. Learn from the past and apply it to the now.
posted by Pete Gilbert @ 11:20 am
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