Analyst Opinion – It can be entertaining to watch companies that have learned to manage expectations. They set low bars, generally fail at what they attempt, and yet the folks in charge of the programs often get bonuses and rewards as if they had successfully executed. I believe the Windows Vista mess was mainly caused by Microsoft’s behavior. Similar behavior effectively killed a long line of companies starting with DEC and running all the way to Sun. Google’s new Chrome OS looks to be another example of people more interested in pretending to be doing something, rather than actually doing it well.
Google’s Chrome OS is largely a copy of what others have done in the past. It looks like an interesting strategic move, but it is being ineptly executed and the metric for success internally appears to simply get the product out the door. This was very similar to the initial release of Windows Vista and we all know how that turned out. Let’s have a closer look at Google Gcrap 1.0.
Opportunity
A blind man could see that the opportunity for the Google Chrome OS is huge. The Windows market stalled on Windows XP, Apple has been gaining share, and the migration from Windows XP to Windows 7 could be ugly. All someone has to do is have something compelling in the market as an alternative during the Windows 7 launch and taking share should be as easy as 1-2-3. When I say something compelling, I mean a product that embraces the Windows XP installed base and promises to save those users from future painful migrations while allowing them to enjoy most of what they enjoy now.
Snow Leopard comes the closest of any Apple OS to doing this and it will hit the market 30 days before Windows 7 does, showcasing a combination of market savvy and technical execution. The problem with Snow Leopard is that it isn’t hardware independent and the related hardware is very expensive during a year when folks don’t have a lot of extra money. This will cut down on how much share Apple will take sharply. But it is clear that Apple will take share.
Google Chrome Late and Lame
The initial strategy that Google appeared to be executing was in three phases. The first was with Google Apps and once a large number of people were on Apps, the second with Google Chrome would have eliminated the hard tie to Windows (you would run Apps and other Google Applications in the Chrome browser). The third, Chrome OS, would eliminate the Windows requirement and promises huge market share gain for Google. The problem is Google Apps didn’t do that well, the Chrome browser wasn’t very exciting either, and now the Google Chrome OS is announced before the foundation moves have been made – essentially alerting Microsoft and giving them a year to think up a response.
If Google wanted to run against Windows 7, which is the ideal target as Windows 7 is no Vista and once users move to it, they are unlikely to move again. Google needs to be in market this year. There are several products that are virtually identical to what Google is planning on building, suggesting they could have simply bought one. The best is Phoenix Hyperspace , a product that was designed to emulate the Apple experience. It would have worked well with Google Apps and had a fast and compliant browser. Designed by the firm most famous for selling BIOS, they could have acquired the company cheaply and gotten a suite of products that would have strengthened their much needed OEM relationships for the coming fight with Microsoft. With Hyperspace, they could have had a product in the market now and be ramping during the time when Microsoft is weakest and before Apple’s own program started. Granted, initially they would only be on netbooks – not ARM based Smartbooks (which aren’t ready yet anyway) – but they would have hit the market at the ideal time for their now accelerated strategy.
Instead, Google is going to reinvent the wheel a year after Windows 7 (and about the time Windows 7 SP1 is due) window opened and that typically doesn’t end well.
Google’s disaster
This circumstance has revealed three critical weaknesses in Google. They don’t fundamentally understand either marketing or PR, which goes to the core of why Apps and the Chrome Browser have failed and why Chrome OS is likely to fail. They apparently have “not invented here” as a policy, which is why they are building and not buying an OS, and they are awash with executives who are avoiding doing their jobs and have developed an expertise in managing expectations instead (inside Google, I’m sure, both Apps and the Chrome browser are seen as brilliant successes.)
This isn’t to say that Microsoft doesn’t have many of the same problems. You and I could probably go down a list of things like Mira, Origami, IE, MSN, and even Windows, which have been either killed or badly hurt by some or all of these behaviors. But Microsoft is the dominant vendor and it takes a lot to kill a vendor once it is dominant. Google is a challenging vendor and in the one place where they are dominant, search, Microsoft has suddenly begun to take share largely by hitting Google with an excellent marketing campaign.
The idea that simply building a product will get people to move to it, which appears to be the core of Google’s strategy on everything, is common to an engineering driven company where no one has studied or understands human behavior. It is the polar opposite of Apple who has taken share from Microsoft. This is ironic given that Google’s primary revenue source is advertising. But it is clear that Google simply doesn’t understand to advertise itself. If every company advertised like Google, Google would be broke.
“Not Invented Here” is why HP doesn’t have a more compelling competitor to the iPhone, it is partially why Palm didn’t have the iPod, and it probably goes to the core of why the PS3 was such a disaster for Sony. It is not an uncommon problem and you wonder why Google didn’t just take over Firefox or buy Opera, or in this latest case, buy Phoenix to get what they wanted in a working product quickly.
Finally, I think the real company killer is staff that knows how to game Google’s management system rather than doing their jobs. Google is bleeding key people, cutting benefits to contain costs, because the folks that are left are increasingly not getting the job done. And a death spiral is likely next on the list for this company as a result. They only have to look at DEC, Netscape, and Sun to see how much fun one of those is. Granted the people who caused it will be long gone by this time and living the good life. But the remaining Google investors and employees won’t be thinking kind thoughts of them.
For instance, where is Android really? Right now, in terms of interest, it follows Apple, RIM and Palm. 4th place like a bullet is hardly a winning proposition, but I’ll bet there are folks in Google getting bonuses for it.
Wrapping up: Google may be the next Netscape
Google has been an amazing success story and, to assure their success, they could learn something from Apple that has executed sharply in most areas this decade. However, they seem to be learning from Netscape and the result will be painful for a lot of people unless this is corrected. See Netscape as an example of the things that are company killers which include an inability to market, an unwillingness to consider existing work outside the company, and executives who are more interested in building empires, income, and getting higher titles than making their company more successful.
Google could have made a difference, and it still can, but is currently on a path that suggests they may have some very tough years ahead, unless their folks roll up their sleeves and get the job done.
Rob Enderle is one of the last Inquiry Analysts. Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them. Currently he provides his services to most of the major technology and media companies.
The opinions expressed in this commentary are solely those of the writer.
