...knocking Microsoft Office off the desktop. Instead, a more probable scenario is that it will drive down the cost of Office.
This is not least because any move towards replacing email and applications technology is likely to take a decade or more. As Austin pointed out: "Companies have a lot of sunk costs and individuals have career investments [in them]." Yet he expressed a belief that "Google's opportunity is through the user community" and, as such, poses an undoubted threat to Microsoft.
"Google is trying to push down to the device. It doesn't want to compete directly with Microsoft or to kill Office, but it's going to push logic down to the device. It's why Google is building Android, [an operating system] for mobile applications. The goal is to ensure an optimum way to deliver information services from the cloud," said Austin.
Google's provision of cloud-based services or hosted applications applies to both consumers and enterprises and, as time goes on, will also include a range of vertical market offerings. First on the agenda is healthcare, followed by accounting services for the low end of the market using Google Checkout, but others are also expected to emerge over the next three to four years.
Visions of a mobile future
As for the growing importance of mobile, Eric Schmidt, Google's chairman and chief executive, signalled this at his Nasa 50th anniversary lecture on 17 January, 2008. He said that, in 10 years' time: "Devices will be 100 times more powerful than they are now and there'll be ubiquitous wireless broadband and [mobile] phones for all. How we can take advantage of that is an interesting question."
Interestingly, Microsoft has a similar vision of the future. The software giant believes mobile devices will become the new PC in as little as five to eight years. But the fact these devices are likely to be much more powerful than they are today, with multiple CPUs included on a single chip, generates a problem.
"Microsoft is asking: 'How can we take our model, which was always built on a single CPU, and re-architect our software so it works in a signal box with hundreds of compute engines?' So Microsoft is coming at this issue from the bottom up and Google from the top down," Austin explained.
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The fact there is still no dominant software platform in the mobile world means it will undoubtedly become a key battleground for the two players. The situation will only be exacerbated by the fact that, as such devices become more ubiquitous, they are also likely to become more important in terms of advertising — an area that, again, both companies are keen to control.
Austin said there is more to it than simply a battle for control of the mobile space. Instead he posited that this situation is more "a battle of visions and business models, and then it becomes a battle of two camps of very smart people, each anchored in their own history".
On the Microsoft side of the fence, the vision was, and still is, that of democratising software and making it so cheap that everyone buys it from one vendor, which can then raise the price. "Microsoft has done a wonderful job of advancing the PC-centric, device-centric view of the world. Its vision was to democratise micro-computers due to economies of scale, commoditise hardware and provide competition to draw down the price to the greater glory of Microsoft — all of which it has achieved," Austin said.
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