Even as Microsoft won a victory recently against its new and increasingly agile young competitor Google in the case of Kai-Fu Lee, Google continues to nibble at the margins of Microsoft's more existential questions - the need for its software in the first place in an age when Web development architecture has taken the "Web 2.0" route offered by schemes like AJAX.
On the Lee case, Microsoft has said it wants the case to be decided in the state of Washington, where a judge ruled last month that the hiring can proceed, with the stipulation Kai-Fu Lee cannot recruit from Microsoft. Google is attempting to keep the case in California where non-compete agreements are said to be viewed with less rigidity.
Microsoft initially filed suit in Seattle's King County Superior Court in July, claiming Kai-Fu Lee violated that agreement when the search giant hired him. Google then countersued Microsoft in California, in an attempt to have the noncompete clause declared invalid.
The battle for Kai-Fu Lee, a former vice president with the software giant, underlines a growing animosity between the two companies, with Microsoft CEO Steve Ballmer allegedly pitching such a fit after losing one executive in 2004 that he threatened to "kill Google" over the continued poaching of Redmond's top brass, even flinging furniture and dropping more F-bombs than I've heard tell in awhile.
Well, Microsoft won its latest round in the fight that has at last made explicit the smoldering rivalry between the two otherwise mostly indirect competitors.
But announcements between Google and Sun have indicated Google's interest in helping partners like Sun compete head to head with Microsoft in the office suite market with the recent release by Sun of OpenOffice.org 2.0 - a significant upgrade to the prior version which, if reviews are to be believed, is a virtual replacement (for free under the open source GPL) for MS-Office. According to Jonathan Schwartz, Sun's president:
“OpenOffice.org is on a path toward being the most popular office suite the world has ever seen; providing users with safety, choice, and an opportunity to participate in one of the broadest community efforts the Internet has ever seen. As a member of that community, I’d like to offer my heartiest congratulations.”
For sure, it gives Sun a new lease on life after a very tough few years after being the dot in the dot-com crash. McNealy was in full effect with his "network is the computer" mantra, so much exemplified by Google's strategy. If you can call it that: Eric Schmidt, who used to work for Sun and is now Google's CEO (after jumping ship a few years ago from the sinking Novell) even mentioned how he delights in the absence of a strategy... well, I guess. No matter how underwhelming the actual announcement, it creates powerful symbolism in the marketplace where Microsoft has left an opening.
Still, OpenOffice.org has Microsoft running scared from OpenDocument - a revolutionary file format that could at last end the Word/Excel/PowerPoint tyranny even more than PDF has done. Which is why, perhaps, Microsoft licensed PDF support for next year's release of the the updated MS-Office suite. But their enthusiasm for SaaS (Software as a Service) is palpable amid McNealy’s remarks about Windows being the last, sad representative of the old client/server computing world and is ”so last millennium.”
Microsoft's reaction to the announcement took the move in stride, but the evidence lies in nothing less than Google's patents that they've got Microsoft squarely sighted in, as it "builds a patent fence" around search and takes on Yahoo first, then leveraging cutting edge user interface design technologies present in Google Maps (which could challenge PowerPoint) and Gmail (the RTF technology already offering about 70 percent of the functionality behind Word). Deployed on the "Googleplex" platform Google has created as its supercomputer-like infrastructure, calling into question Microsoft's very necessity isn't far around the corner.
Of course, Microsoft has seen such threats before - when Netscape challenged the idea that an OS was even necessary and applications could be run in Sun's Java within the browser. We all know how that ended... despite continuing market share battles with Mozilla Foundation's open source alternative to Internet Explorer (which I use myself), in Firefox.
But Redmond won't go down for the count easily. They've just reorganized decisively to take on such threats. And, while Microsoft might not have invented the idea of "embrace and extend"; they do seem to have perfected it.
Google's chief executive, appearing in Seattle yesterday, acknowledged Microsoft's push into the search business but said there's ample room for multiple competitors to thrive. He also downplayed the notion of Google as a threat to the Redmond company's dominant software franchises.
"It looks to me like this space is so large that there will be multiple winners," Schmidt told the audience at the Technology Alliance annual luncheon in downtown Seattle. "There's plenty of room for all the players."
Asked to identify Google's primary competition, Schmidt pointed first to Yahoo! -- saying it has "emerged as the major, major competitor in this space." He then noted that Microsoft has also launched its own Internet search engine but observed that the Redmond company is "just getting going" in the business.
Later in the day, addressing University of Washington computer science students, Schmidt gave a similar response but went further -- saying that Microsoft is "not a significant competitor yet" in the search business.
"Although I'm sure they'll try," he added, drawing a round of knowing laughter from the crowd.
Microsoft this year introduced its own internally developed MSN Search engine, replacing technology it had previously licensed from a Yahoo! subsidiary. MSN Search remains third in market share, but top Microsoft executives including Bill Gates and Steve Ballmer have said it's critical for the company to improve.
Google last year opened a development office in Kirkland, just down the road from the Microsoft campus, and yesterday Schmidt said the outpost has been growing rapidly. He said he envisions the company ultimately employing hundreds of people there. Some of the employees in Kirkland are former Microsoft software developers.
Some who listened to Schmidt yesterday said they weren't surprised to hear him downplay the notion of Microsoft as a major competitor.
Google is "very focused internally," making sure that it continues to innovate, and it's less focused on the competitive landscape, said Greg Linden, founder of Seattle-based Findory.com, a personalized news search site.
Microsoft's executives, in contrast, seem to be very focused on Google.
At a Wall Street Journal conference in California this week, Gates made it clear that he doesn't think Google's status as the tech industry's hot company will last forever -- reportedly saying that "the bubble is still floating" around the company.
But for now, Google's cachet shows no sign of waning. In one indication, the UW auditorium where Schmidt spoke yesterday was packed.
"There's kind of this novelty, this aura, around Google," said Ben Hindman, a 21-year-old UW computer engineering student who attended the event.
Nathan Evans, a 22-year-old computer science student, said it will be interesting to watch Google's policies and direction as the business evolves. Topics addressed by Schmidt yesterday ranged from China's emergence online to Google's thinking on the inclusion of subscription-based news content in search results.
In a variety of ways, Google's dominance of the search business has put it in a position to overshadow some of Microsoft's most widely used programs. With the rise of Internet search, the popularity of Google's site rivals Microsoft's Windows operating system as a focal point for many computer users.
More broadly, the Mountain View, Calif., company exemplifies the notion of the Internet as a platform on which software can be based. In the long run, that trend has the potential to reduce the significance of the PC operating system -- from which Microsoft still derives most of its profits.
In one example of its aggressiveness beyond Internet search, Google last year beat Microsoft to market with a desktop search program for finding information and files stored on hard drives on Windows-based computers.
Google also offers ancillary programs, such as its Gmail e-mail software and Picasa photo-management program, that compete directly with Microsoft products. And last week, Google unveiled a new program that lets users personalize their version of the Google home page with additional information and news -- making it more of an Internet portal, along the lines of Microsoft's MSN site.
Underscoring the ad hoc nature of Google's development process, Schmidt acknowledged that he didn't know the personalized page was being launched until others at the company told him about it on the day it was to be announced.
But in a brief conversation after his Technology Alliance speech, Schmidt said he doesn't envision Google posing a direct challenge to such widely used Microsoft products as Windows, Office or Internet Explorer.
"We don't try to do things which people already do well," he said. "We try to do different things. ... Why would we want to take our scarce resources and do something that someone else has already done? You never want to say never, but it doesn't make sense to me."
During his Technology Alliance speech, however, Schmidt said it wouldn't be right to think of Google as merely a Web search company.
He explained: "We prefer to think of ourselves as one of the players in the information business."
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