Scoble has an interesting post about how Google is disruptive by not worrying about making money. His point is about the differences in the internal structures, but I find it interesting that the differences come down to one point - what they tell their developers.
Google makes its money primarily off it advertising business, deliver via search and integrating with external content. All other areas they are willing to lose money to build the brand - as Scoble put it: "Google tells its engineers to go and come up with cool services without thinking about monetization strategies they say theyll figure that out later."
Microsoft makes its money primarily off two products - Windows & Office. Last time I read, every other product loses money. Microsoft has stated that they are willing to lose money to build the brand and compete in new markets (*cough* xbox & msn, among others *cough*).
Both lose money on non-core products but want to build their brand. Both say they will make money on new products eventually. The only difference seems to be that Google tells its engineers build something cool, figuring out the money thing can be done later by others. Does this mean Microsoft puts stress on its engineers to produce financially successful products instead of awesome software. Otherwise why would Scoble characterize Google's methods as disruptive as up until this point the strategies are very similar. There may be complex reasons why Microsoft cannot allow its developers to ignore fiscal concerns (such as legal constraints due to previous anti-trust violations.) Even though, the overall message may be that Google and Microsoft are executing the same strategy but the attitude makes all the difference.
My company just built a Ruby on Rails interface on top of Small Business Account (Microsoft's answer to Quickbooks). SBA didn't include timers, widgets or a web interface. Before we settled on building a xml-rpc server to connect to SBA, we experimented with connecting directly to the SQL database. The database schema is horribly complex! The diagram we produced looks closer to the design of an intel chip than an accounting database. While the product is much better than Quickbooks, it appears to have been created by developers without passion. Freeing developers from worrying about fiscal worries helps them create great software.
Come on Bill, I remember when you thought it was being cool that mattered.
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