This has been a week of announcements of evolving new business models from major technology players. The pace of technology change is gaining momentum over past few years but more importantly the technology consumption models are changing are greater pace. Social Media / Networking, Cloud Computing and Mobile / Tablet devices are leading the charge in the consumerisation of IT. And the major technology players are either taking leadership role or busy planning catch-up game.
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| Image Copyrights – Microsoft |
Microsoft with dwindling revenues and under increasing pressure from Cloud leaders such as Amazon (EC2) and Google (mail and docs in cloud) has finally launched it’s much awaited MS Office Cloud offering titled Office 365. As Reuters reports, The world’s largest software company is heaving its two-decade old set of applications including Outlook email, Excel spreadsheets and SharePoint collaboration tools into an online format so that customers can use them on a variety of devices from wherever they can get an Internet connection. Is it a direct response to popular Google docs? Probably yes. Will it work? There is a good chance in my opinion. After all this is the world’s most successful and most widely used office software by a long distance. However the key question which will have to answered is why would Office 365 be attractive to those who already have MS Office licences, and there are a very large majority of us who fall in this category.
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| Image copyrights – Google |
The other evolutionary business model which is worth taking note of is Google’s (yet another) attempt to break the Facebook Social Network monopoly. Despite of its huge success in search, docs, email, android etc. Google still remains fascinated by the ultimate prize in emerging online collaborate over Social Media, offcourse the domain where Facebook is a clear and undisputed leader. Is it an attempt to tempt away generation Y away from Facebook? Well whatever the objectives may be they seem to be succeeding at the moment with oversubscribed early trials and beta.
So why do these moves matter? What is evolutionary about them? The answer is that the above two developments demonstrate that even well-known and highly successful brands such as Microsoft and Google are not hesitating in making fundamental shift to their business models and operating models. For Microsoft to move away from cash cow licencing model to PAYG Cloud based Office, it is a significant shift in their strategy. But they are almost pushed to this position by Amazon EC2 success and Google Docs adoption. And they are responding with credible, real and innovative offering.
As for Google, Social Networking remains a rare failure in its otherwise very successful forays in search, docs, android etc. Google makes its revenue and profits from advertising. Irrespective of runaway success of Android, it is clear that Google will remain focused on Search driven Advert revenues. And this very traffic / revenue sweet spot is under threat from Facebook as more of us replace product or service search from Google to recommendations from friends on Facebook. Google had to ensure that it kept hold of its loyal search users and offered them comparable social platform on the lines of Facebook. It remains to be tested but my guess is that Google wants to evolve from its Search driven model to Network based recommendation model. It will not change overnight, it may take months and years but Google understands that it has to evolve even if it means to shift focus away from its runaway successful Search product.
Microsoft and Google are doing what all proactive, successful companies do. Sense, Adopt and Evolve, even if its means breaking away from successful existing models.
