Microsoft’s Nightmare (or Google’s?) has a solid article on the nightmare scenario that Microsoft may be facing as Google evolves from search engine to Internet application platform.
They cite Google’s investments in fiber cables and Wifi as well as Microsoft’s reorganization that brings together their Platforms division and MSN. The article rightly points out that Microsoft has seen this threat before. Netscape promised a “web platform” revolution way back when and Microsoft handily suppressed that revolt. This time around, the revolutionaries are much better funded and arguably more savvy than last.
This scenario has been expounded upon before and while I think there is merit to it, I think it’s far easier said than done (sort of like…Communism).

In order for Google to make this happen, they need intimiate control of the landing pad – the user’s desktop screen. To date, all of this AJAX-laden, Web 2.0 goodness is happening on a Microsoft screen near you (excluding the 5% or so on Macs and other platforms).
Google Talk. Google Desktop/Sidebar. Google Earth. Just about everything Google has put out that lives outside of your browser is running on Microsoft’s operating systems. Google is anxious to begin the march out of your browser’s four walls. Ultimately, the key question that arises is: if Microsoft & Google are about to go toe-to-toe, and Microsoft owns the platform (today), and Google is intent on breaking out of the browser and into your desktop/devices/etc., where will their applications land?
Put another way, can Google crush Microsoft in a battle that is effectively fought on Microsoft’s own platform? If history has any say, the answer is no. Microsoft is building out a whole new arena as we speak, and their intimiate understanding of that arena will not be shared with its competitors (just as it wasn’t shared with Netscape years ago).
Beyond relegating Google to another software vendor that plays on Microsoft’s turf, Microsoft has its own plans for leveraging services-based software on their OS. Technologies like XAML, effectively HTML for the desktop, highlight a clear plan to speak to your hardware – graphics, sound, input devices – in a far more intimiate way through pure XML. Rich user interfaces will be delivered as needed to the desktop, or your side bar, or your Start menu, or really anywhere. And they won’t just be Ajax. They will tap directly into the hardware capabilities that Vista will be enable right out of the box.
If its agreed that Google can’t win this battle inside of Microsoft’s own arena, then the only remaining option is to go outside – and that’s where things get really interesting. Is Google planning on delivering a thin Internet appliance that does just about nothing except run Google applications? Is it based on Linux? Is custom hardware involved? If so, who are they partnering with? Does Google really want to tie software to hardware (a la Apple)?
In the end, no matter how many fiber lines and Wifi networks Google gets its hands on, the real beach head is the last three feet that lands them in the user’s living room or office. Today, Microsoft owns that experience and it is far easier said than done to unseat them from that role.
All of this doesn’t even address how Google plans to make money. Just about everything they offer today is free. I seriously doubt that users are going to tolerate advertisements on their word processors or spreadsheets. If that’s the case, then at some point, Google’s going to have to break the bad news to a lot of people: start paying for our services. Microsoft broke the bad news long ago. They sell software. Do users really want to subscribe to a “Word Processing Service?”
In the end, I think these theories are appealing because various facts seem to fit so snugly in relation to one another. Reality and the devilish details within may tell a very different story. If the theories are correct, Google is about to go to war, and it may prove to be it’s Vietnam.
And let’s not forget…Yahoo!

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