Google Office

What can I add to this discussion? I think this may be the most discussed blog story in a long time. Check out this list of links to the story on Buzztracker. That's 68 links from yesterday alone and Buzztracker only includes the "authoritative" blogs/feeds in their index. I can't even bring myself to wade into these links and start reading.

And this is really not a new story. We all could see this coming. Gmail, Gtalk, Gcal, Google Spreadsheet, Writely. You'd have to have your head in the sand not to see this coming. Clearly Microsoft has seen this coming, although Bill acted like he didn't at the D conference.

So what does this mean for VCs and entrepreneuers? I think it means that Google has selected its second area of focus and that is collaborative web-based productivity apps (the first being search of course).

As much as Google is an unusual company (and it is), it will begin to have to play by the rules that large companies play by, that being organizing, planning, process, heirarchy, and focus.

So if you fear competing with Google (I am not sold on the fact that you should be), then you don't want to be competing with them in paid search/contextual advertising or collaborative web-based productivity apps. The second category is particularly worrisome because its going to be war between Google and Microsoft and the small guys might get stepped on by some elephants.

Add to this the story of Kiko, a web-based calendaring app that was recently sold on eBay for roughtly $250k. Paul Graham, who provided the seed funding for Kiko, wrote the definitive essay on this subject and he says:

The killer, unforseen by the Kikos and by us, was Google Calendar's integration with Gmail.  The Kikos can't very well write their own Gmail to compete. While I don't think this case implies the party's over for web startups, it is significant in one respect.  It seems to be the first example of Google benefiting from the Microsoft Office effect. In the 80s and 90s, Microsoft gradually killed off the competitors of its individual applications by making them tightly integrated.  Obviously this works for web apps too.

So there is good news and bad news for VCs and entrepreneurs in this story of Google deciding to focus on the productivity market. The good news is that if you are competing with Google anywhere other than search/contextual and web-based productivity apps, you may find them focused elsewhere. The bad news is if you are in the productivity space, you might want to think about a new business plan.

Update: Nice post by Chris Anderson on how you might be able to embed productivity app data from Google's apps like you can embed videos from YouTube. I like that a lot.

Comments

[csven]

"I think it means that Google has selected its second area of focus and that is collaborative web-based productivity apps (the first being search of course)"

I think there's more. I'm still seeing a Google PLM in the future ( http://blog.rebang.com/?p=954 ). Marry the 3D (Google Earth) to the 2D support apps (Google Office) and you get a kind of PLM (ala UGS, PTC, Dassault, aso). It seems as if MS is heading that direction as well afaic ( http://blog.rebang.com/?p=891 ) and has been for years ( http://blog.rebang.com/?p=50 ).

If you're considering building a 3D interface - a Metaverse - then acquiring an app like SketchUp, letting people hook into your 3D app, and linking that thing to a kind of 3D Adsense (imagine the possibilities!) makes sense because then the whole thing has a means for funding its own growth. It's a little like Second Life, only more open, more tied to the 2D Net, more tied to real world businesses (and their real locations) and more mainstream.

[Dorrian]

I think Google recognizes the opportunity to blur the enterprise and personal lines of collaboration in a way that the web as a platform allows and in a way we have not seen before, particularly in scheduling and communication. This is different than a direct assault on Microsoft's enterprise stronghold. Start-ups probably have a good chance to participate (companies like Foldershare come to mind - bought by Microsoft) but, as you point out, they probably cannot win it. Indeed, what is scary to me is the sense that this may be a winner take all market opportunity, and only open standards and open data integration can save us from the "winner". In part, I wonder if that's why we've seen movement to this kind of thinking from Microsoft in the past year - some kind of funky hedge.

[Jean Biri]

"collaborative web-based productivity apps". Nice category description!

This is certainly one battle that will be interesting to follow as for the first time (if my memory serves me correctly), Microsoft has a worthy contender trying to take a portion of its lunch.

However, I can easily see how the desktop and web based productivity apps can co-exist just as wet and dry shaving do. It will come down to the consumers' preferences and they're the ultimate winners as they now have more than one choice.

[Vincent]

The interesting question here is: does Google have a chance against MS Office? After all, Sun released Star Office a few years ago; it was free (!), desktop-based and almost totally compatible with MS Office. Free against $300 should be very powerful. I certainly downloaded it. But eventually STAR Office did not make a dent in Microsoft's market share. Why? many reasons, but for me it was intuitiveness and familiarity with the UI: like many others, I have perfected my Excel and Powerpoint skills over time with every Office upgrade and can now almost handle my documents with my eyes closed. It's like a riding a bike, you don't think about it, you just do it. Overcoming any little interface change that will make people pause and think about the product is difficult. That's the power of defining the standard and it helps Microsoft tremendously. So in my mind, I just saw Google Office as an other vain attempt to rewrite the standard…until last week.
That’s when I downloaded the Beta 2 (!) version of Microsoft Office. After one week of using it, I just hate it so much I’m ready to change. This is a classic case of focusing on the container instead of the content. It sure is all pretty, but the most basic functionalities have been hidden so well, I spend my time trying to find them. I had to customize menus to display simple functions such as “Save as” and Open new document, and after one week I have not found the button to rotate an object in PowerPoint. Since I now have lost all my points of references, I’m ready to give a try to something else. Google, you can thank Microsoft for that.

[bobo]

I agree that Gmail was the Kiko-killer, but completely disagree that it was the integration that prompted people to switch. I'm assuming that by integration you mean the ability to add an event that was emailed to me via the link on the right of gmail. I have yet to use this, and actually I think I've yet to see it work correctly (it always wants to add events on the wrong day, with the wrong name, etc.).

I think the reason Google Calendar will win is simply because it's made by Google. People are more familiar with their interface, and there will be more plugins for it. I was looking for an online calendar and started using Kiko right around the time that GCal came out. The thing that made me start using Google was a firefox extension that someone wrote that let me "quick add" an event from any web page. That did it for me.

After I switched I started using Google's public calendars and creating multiple overlaying calendars of my own. Kiko might have these features (and for all I know they may have had the "quick add from outside Kiko" feature, but I didn't know about it and I didn't care.

I guess the thing was I'd expect these things from Google, whether they can from inside google (multiple calendars) or outside (the quick add extension). And that made me _want_ to like Google Calendar more, even though I had no problem with Kiko.

[bobo]

Oops, my first sentence in the prior comment should have read "I agree that GOOGLE CALENDAR was the Kiko-killer, but completely disagree that it was the integration WITH GMAIL that prompted people to switch."

[bobo]

And finally (last post, I promise), what's with calling this "Google Office"? Where are the Office-like utilities?

The media calling this "Google Office" is irresponsible at best. Yes, maybe it's a precursor to an office suite and they're sure to add Writely and Spreadsheets to it (or create a separate bundle). And yes, an office suite could include some of the tools here, and/or people in an office could use some of them.

But people in an office could also eat jam on their toast, and calling this "Google Office" is no more accurate than Smuckers coming out with a gift box of jams and jellies and calling it "Smuckers Office".