02
November
2005
|
21:06 PM
America/Los_Angeles

Microsoft cannot match Google's pace of innovation--but there is one strategy that can help it compete and I'll tell you what it is...

By Tom Foremski, Silicon Valley Watcher


There is one strategy for Microsoft, if it is to hold its own against Google, and the "Live" announcement this week is just one segment of it.


MSFT only has one main strategy open to it, because it cannot compete against Google on Google's terms.


Let me explain: Google is faster at innovation than any other organization of any size.


It is structured in such a way that self-organizing teams of innovators form naturally within Google, and they make it past various checks and balances on the way to becoming full fledged beta business projects.


The teams of innovators within Google compete against each other, but they leverage the power of the GOOG, the planet's most powerful and most scalable computer system.


In today's web 2.0 world (it's actually Web 0.2--we are still very early) it is all about knowledge capital, not money capital, because the infrastructure is already there. There is no need to build a data center or reinvent algorithms, etc, it is all part of the infrastructure--both in the public sphere and within Google.


The innovation coming out of Google is "technology enabled" but not "a technology." Gmail, Google Desktop, etc, are all applications we've seen in one form or another before, but they are different, they are search-enabled applications (SEA) and they are integrated, and they are created with simple but powerful software development tools such as PHP, Ruby on Rails, Perl, etc.


And the innovation comes from the marriage of business models around useful, simple SEA/services. And just like a startup seeking a market, Google's emerging business groups rely on market validation (usefulness to users) before continuing to the next stage.


Knowledge capital isn't just salary and benefits, it is about recruiting the best people. But it's not easy to get the best people, it takes more than money. MSFT has tons of money but Google has the better pitch.


It goes to universities and it says to graduates: come work with us because if you want to make big changes in the world, nobody has the same scale, the same ability to make a huge difference in the world than Google.


That's a powerful pitch. Microsoft cannot counter, as it has tried to, by suing Google over hiring away top staff.


And Microsoft cannot match Google's pace of innovation because that is a cultural issue--MSFT's legacy culture cannot change fast enough.


Microsoft has but one strategic choice, imho. And I'll tell you about it in my next post :-)


Please see:

It's not about the money or the stock options. . .thoughts on Microsoft lawsuit against Google for poaching staff


Schmidt reveals Google's Really Big Vision


The game changed, and nobody told Redmond