Sunday, June 2, 2013

The Rise of Google?

Interesting article about the rise of Google, and the underlying trends and business models that Google appears to be counting on.

From Datamation:
"How to Understand the Rise of Google"by Mike Elgan

The article has an excellent summary:
Two or three years ago, people might have said that Apple was on the rise and Google was in decline. Today, people say Google is on the rise and Apple is in decline.

Pundits and press are generally confused about why this is true. They say it’s because Apple used to make better stuff, but now Google does. But that’s wrong.

The best way to understand the main difference between these two Silicon Valley giants is to divide the consumer electronics world into products and services.

Apple and Google both make products and services. Products include hardware and software, and services include things like, say, iTunes or Gmail. But that’s where the similarity ends.

Apple is a product company. Their services exist to support their products.

Google is a services company. Their products exist to support their services.

The shifting fortunes of these two companies is less about which company is succeeding and failing and more about which model is succeeding or failing.

Right now, the product model is on the ropes, and the services model is on the rise.

The author did a little experiment.
As an experiment, I have put away my MacBook Pro, iPad and iPhone for the month of May and am instead using only Google hardware. In addition, I’m using only Google software and Google services.

This experiment has been amazingly easy so far. It has been easy in part because I was already a heavy user of core Google services like Google+, Gmail, Contacts, Calendar, YouTube, Chrome, Maps, Search and others. Since beginning my Google experiment, I’ve become an even heavier user of Docs, Now, Keep, Drive and others.

And it’s taught me something devastating about the difference between Apple and Google: I could live without Apple. But I would not be willing to live without Google.

I can get great products from multiple sources—Apple, Google, Samsung, HTC and a world of software startups. But I can get the best services only from Google.

 Conclusion:
By the end of Google I/O, I believe the new direction for consumer technology will be clear. With the commoditization of products, the new focus of differentiation is on services.

In other words, the world is shifting in Google’s direction. When consumers choose products, they will increasingly choose them based on how well they connect to the services that really matter.

People might choose Android not because Android phones are better products, but because they do a better job of connecting to services. Likewise, people might choose Apple for the same reason—because they judge that Apple products do a better job connecting them to services.

It’s all about services. And that’s the house that Google built.