In my previous blog posting, I highlighted the fact that Google's advertising-based revenue model does not justify its market cap. Clearly, the folks at Google are wise to this and are looking for other growth opportunities, and have Microsoft right in the crosshairs. Microsoft offers archaic technology relative to web technologies and there is a lot of revenue ripe for the plucking.
Google has just done another build vs. buy acquisiion (ie, acquisition that did not cost that much) by buying JotSpot. JotSpot is a YAW2 (yet another Web 2.0) company with no viable business model but some interesting features around a structured Wiki that help people easily build intranet features such as holiday calendars and expense management.
Google Office currently offers mail, calendaring, word processing, spreadsheets, and search. It has now added an extensible wiki comparable to SharePoint. Missing are PowerPoint, Access, and Project equivalents but these will be pretty cheap for Google to pick up (DabbleDB, Coghead, Backbase, etc.).
Google Office is not going to target enterprises, at least initially. However, it is clear at this point that Google is going to own at least the "S" in SMB. Small businesses with <50 people no longer need to buy a thing from Microsoft except for Windows XP at an OEM price. What they give up in some individual features will be more than made up with the collaboration and data backup features of using hosted applications in addition to the cost savings of not buying licenses to bloated software and not maintaining software on desktops.
- Peter Yared
- Peter Yared is the CTO/CIO of CBS Interactive, a top ten Internet destination, and was previously the founder and CEO of four enterprise infrastructure companies that were acquired by Sun, VMware, Webtrends and TigerLogic. Peter's software has powered brands from Fidelity to Home Depot to Lady Gaga. At Sun, Peter was the CTO of the Application Server Division and the CTO of the Liberty federated identity consortium. Peter is the inventor of several patents on core Internet infrastructure including federated single sign on and dynamic data requests. Peter began programming games and utilities at age 10, and started his career developing systems for government agencies. Peter regularly writes about technology trends for CNET and has also written for the Wall Street Journal, BusinessWeek, VentureBeat and AdWeek.
Many thanks to Bob Pulgino, Dave Prue, Steve Zocchi and Jean-Louis Gassée for mentoring me over the years.