By Tom Foremski, Silicon Valley Watcher.comThe best strategy for Microsoft (and others) to fight off the innovation powerhouse of Google is to wrap metal and plastic around its software and online content/services.Hardware is now cheap enough that the cell phone approach to the PC industry makes sense. Microsoft has the hardware experience and capabilities to create a MSFT PC that is tied into its "Live" platform for the consumer market.This creates the walled garden--fusing hardware with software with services--that resists competition no matter how innovative. That's what Apple Computer did with the marriage of iPod/iTunes, and it created a position of dominance in a market that has many "innovative" MP3 players and online music stores.Add to that a walled garden of pipes--from one or more of the telcos--and you have a very defensible fortress position. Prop it up further with MSFT's billions in cash, and you have a massive fortress that will bleed Google dry trying to scale it.[BTW, AOL did the wrong thing, again, by becoming open. It should have stayed closed and offered a trusted environment safe from phishing and spam and scammers. The AOL-Time Warner deal makes sense in today's environment...]A MSFT PC could be based on its Xbox platform, and it doesn't necessarily need a big, expensive Intel microprocessor, it can be put together with a combination of specialist hardware and commodity parts. It would be aimed at the consumer and small business and schools markets. It would also have MSFT's DRM technology embedded, and it would easily handle the vast majority of PC tasks used by the vast majority of people. MSFT has very good versions of all the stuff you need: media player, games player, word processor, spreadsheets, cell phone software, etc. All for $35 per month for basic service, $50 with the cable TV package. Better yet, sign-up for the entire MSFT Digital Life Freedom Package that includes cell phone, TV/music service, phone, software, a multitude of online services, PC, and portable music player for just $99 per month. Having its software online (but with enough on the client side to work when there is no internet connection), also solves Microsoft's huge software piracy problem. There will be special editions of the MSFT PC too--school, work, etc. Enterprises won't buy these packages, but consumers will. A MSFT PC can seem very "open" at the start--but that gate can be gradually closed.Now you understand why Google is buying up dark fiber, why it has hired chip engineers, and why it is investing in WIMAX--all to vault over the walled gardens being formed right, left and center--almost wherever you look. It is goodbye to open standards, open source, and open competition.In that scenario, Google looks like the underdog to me. It doesn't have enough capital to take on a MSFT strategy such as the one described above. A Google tie up with IBM, the open standards knight in shining amour, is the only way it can take on Redmond's attempt to fence the open platforms of the PC and internet.imho.Please see related stories: Goodbye PC, welcome back proprietary devicesThe trend is to use tightly bundled hardware, software and services to control access to content. May 2, 2005 05:50 PM