Google’s coming out with a web-based spreadsheet and Tom Foremski is not amused:
[Is] it okay for Google to compete with many smaller companies, using its massive scale, integrating the applications into its platform - and not even bother to try and monetize those applications? And it is not even in its mission?
It is certainly not illegal to do this, and the cost of buying a small company and releasing the software for free is tiny for a company the size of Google. But, it puts people out of work, and puts companies out of business, and Google shareholders don’t get any benefit. Wall Street doesn’t raise the valuation of GOOG because it now has a web based spreadsheet.
Paul Kedrosky is none too happy about it either:
You know, this sort of thing from Google is beginning to bug me. Google reminds of an over-eager puppy: Just happily waving its tail around, and then sh***-ing in markets. It did it with Google Analytics, and now it’s doing it with Google Spreadsheet. Where Microsoft used to ruin markets by taking all the revenues to itself, Google takes a nuclear winter approach wherein it ruins markets by freezing them and then cutting revenues to zero.
These arguments arrive from the same mindset as Foremski’s bad competitor musings in which he talks about companies “behaving stupidly and ruining the market from everyone.”
But what about the benefits to the public? Unless a monopoly is formed (you could argue that Google has the makings of one), most computer users are better off with more choices, especially when some of those choices are free and accessible online.
Markets themselves don’t get ruined, absent severe societal problems. Markets aren’t static structures that can be reduced to rubble by the wrecking balls and bulldozers of a few companies. Markets are processes that shift and adjust over time. Individual competitors, business models, conventional ways of doing things–those are the things that can get destroyed. Even when Microsoft and Google are long gone, there will be a market for ways of managing and analyzing quantitative information.
This discussion reminds me a little of the one around venture capitalists that happened back in January, wherein I proposed that venture capitalists are doomed. It’s right out of Econ 101: competition drives out profits. The consumer benefits from lower-priced goods. Now, I don’t want to be naive and think there’s no disadvantage to what Google’s doing. As Kedrosky and Foremski point out, there are drawbacks: Google may not keep supporting these free services if it succeeds in killing off money-charging competitors. People do get put out of work when cash cows die. I don’t agree that Wall Street won’t consider this in its valuation of Google, because it only adds to the air of inevitability around Google’s eventual victory over everyone else. And that brings us back to the possibility of a monopoly, which is indeed a concern. Call me a bad mix of Democrat and Republican, but I think the market will work pretty well and when it doesn’t, the government anti-trust division will step in.
And I can’t wait to try the spreadsheet!
13 Comments
Less than 1% of spreadsheet users will switch from some other spreadsheet to Google’s. There are no smaller companies involved with this. OpenOffice already provides a spreadsheet that’s for free. Mr. Foremski should know this, unless ZD has really lowered its standards for writers for the organization.
There is nothing at all tangible about Google’s desktop tools. If it weren’t for a very small world that generates a lot of noise, disproportionate to it’s size, it would go the way of most Google announcements.
There have been exactly two successful Google releases in the last two years: maps and gmail.
its not like me to give GOOG a free pass but if it was some tiny company nobody ever heard of before they would be lauded to the skies for releasing a free online spreadsheet service, so i am not entirely sure where foremski and pedrosky are coming from. the lock is in the packaging mechanism, and for now Google ain’t there yet. Free, these days, is a feature, and we all have to live with that. Would i call foul if Gartner started open sourcing its content? No.
10 Years from now chances are that google will capture office market , it’s not aiming for US MS Office market , it slowly pushing one by one all services to Internatioal market. just like myspace orkut is very popular social networking site in Asia. I’m not a big supporter of Google but google will certainly has a chance !!!..
The business strategy these days is protect your own cash cow and commoditise those of others.
It can only end in one way…
Tom - if that’s the only strategy and everybody’s successful, then I guess the cash cows die. We’ll all be put out of work and have to get jobs as nurse’s aides to the elderly–can’t really commoditize that! At least we will be able to blog when we have time off, though. Thanks for the comment; nice to see you here.
Prakash - I could see Google chipping away at Microsoft’s office hegemony, starting with casual spreadsheet users like myself who don’t need the full power of Excel and international users, like you mention.
James, wouldn’t that be interesting if Gartner did open-source their content. I’m thinking that’s not gonna’ happen, at least not until they’re pushed into a desperate corner and they can’t think of anything else to do.
Shelley: right, OpenOffice already has a free spreadsheet, but I guess since it’s not pushed by the current godzilla of the web it’s not so threatening. To me, what’s exciting about Google’s offering is that it’s a service rather than a desktop app. I prefer online services to desktop apps for the most part, but that’s because I use tools like graphics manipulation or spreadsheets very lightly. I think that’s the market Google can get, along with parts of the international one, like prakash mentioned. How much of Microsoft’s office business is that? I don’t know.
I think your central point is a good one, Anne. Let a thousand spreadsheets and online Office apps bloom, I say (although Shelley has a point too about how unsuccessful many Google services are — things like Froogle and Orkut and Reader totally suck in most cases).
I think Google wants to compete not with Microsoft’s Office as it is now, but as it might be in the future, when Internet access is more ubiquitous (which it almost certainly will be) and people are even more comfortable living online. As someone said of Wayne Gretzy, he was better because he didn’t skate to where the puck was, he skated to where it was going to be.
Regarding the commoditization of nurses aides, try doing a search on ‘robot nurse’.
For the time being I believe Google will only attract the casual user and as such will be of little competition to any of the smaller free spreadsheets much less Microsoft Office.
I don’t know of any business or professional user that would trust their critical, confidential, or personal data to a Internet based spreadsheet. I certainly would not.
Michael: so much for my career plans
Mathew, I was thinking along those lines, too especially when I saw Nick Carr arguing that Google wanted to sponge off of Microsoft, not destroy them. Yeah, today it might not be full-featured enough to suck off a large part of Excel users, but what about in the future, when no one wants to hassle with desktop software anymore? Google as Gretsky, yes.
Earl: given Google always labels these offerings as beta and gives no assurances or guarantees about data security, backup, or availability, you’re probably right. However, I think that ultimately much of our data will in fact move online, even business data. But we’ll need to have strong assurances about our data as well as recourse in case something happens.