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Jason Stamper's Blog
Why Google attack is Microsoft's not-so-secret secret sauce
June 01, 2006
It's official - Microsoft is playing catch-up with Google, and putting its back into the task in the form of that massive increase in R&D spending in the area.
Microsoft chief executive Steve Ballmer yesterday spent an hour at the Sanford C Bernstein & Co Strategic Decisions Conference in New York seeking to reassure Wall Street that Microsoft's surprise $2bn increase in R&D spending, revealed a month ago, is justified. It needs to catch up with Google.
"We've got to make this transition, which our industry is making, from software as a product to software as a service," he said. "If you want to be a leading software company, you've got to be a leading software-as-a-service company."
This transition is "not optional", he said. "There was one big opportunity - advertising as a software business - where we weren't first," he added, with a nod to Google. "Being a little bit more generous on R&D, rather than a little less, I think is a smart thing."
My colleague Kevin Murphy goes into some depth on Ballmer's statements here. The only surprising thing about all this Google catch-up noise from Microsoft, in my view, is why it took them so long to truly realise the threat that on-demand, or hosted, or whatever else you want to call it, is a major threat to its business.
Comments
How long did it take MSFT to recognise the Netscape threat?
The more important point surely is whether arch box shifter Ballmer is the right person to take the company forward.
If that is your comparison, Dennis, then shouldn't Google be worried? Microsoft was late to the browser wars but once it took to the battle field it wasn't long before it had won...
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