• Dissecting Google's Nexus One Strategy

     

    Two days back Google announced the release of their Android 2.1 based mobile phone, NexusOne, with much fanfare. In spite of the fact that CES is just around the corner, this announcement got the tech blogosphere and mainstream media go wild. The reactions from the pundits ranged from why is Google getting into handset business to why is Google not giving away the phone for free. In this post, I am going to intentionally approach Google’s strategy from a completely different angle, with a possibility for getting dismissed as a conspiracy theory. It is my argument that these pundits are not understanding Google’s strategy at all. Let me explain why.

    In 2008, when I wrote a post about Google, I highlighted two important points about them. 

    There are two types of companies in the world, companies with products and companies with a vision. Google belongs to the latter category and there are only a handful of companies in that category, with Microsoft being one of them. Bill Gates had a clear vision for his company: he wanted to put a PC on every desk. This vision drove Microsoft’s operating system products and they did manage to put a PC on every other desk (well, not literally). Similarly, Google also started with a vision, to organize all of the world’s information.

    and

    The case with Google is different. They are still focused on their initial mission to organize all of the world’s information. Everything they do, whether it is Google Apps or Google Books or their Chrome browser or even their investment on research related to alternative energy sources, is linked to their original vision. They just want more and more information on their servers. That is the bottom line and that is why Google still considers Search to be their core business. 

    This will the basis of my argument in this post too. Google is still in the business of organizing all of the world’s information. However, to have a successful with their vision, they need to take care of many factors. Some of them include

    • The application to handle all the information, browser

    • OS to control complete user experience

    • Last mile network to users home

    • Internet

    • Mobile OS

    • Mobile network

    and so on. Even though there are other factors, the above mentioned ones are relevant to my argument. Let me now try to explain how these factors affect Google’s strategies to achieve their goal and, then, point out how Nexus One strategy is one among them.

    When Google started off with their mission to organize all of the world’s information, their first concern was about the web browser. With the complete dominance of Internet Explorer, Google was fully aware of the fact that it is very easy for Microsoft to bump them out of the marketplace. They supported Mozilla in their quest to break the dominance of IE. Firefox is an open source browser and Google cannot exert much pressure on them and make them dance to their tunes. So, they plotted their own browser to have a better control over the user experience. They released the browser under an open source license to keep their “do no evil” mantra intact and also to keep the regulators at bay.

    As long as Microsoft controlled the consumer and enterprise desktop market, there is always a danger of Microsoft continuing with their dominance over productivity applications. They can easily offer a better user experience with their S+S strategy. If Google has to reach their goal of organizing all of the world’s information, they have to get the data of every single user into their servers. The best way to do it and, also, change the traditional desktop mindset of users is by taking control of the operating system itself. It is no easy task to break the backbone of Microsoft in the OS market but it is important to loosen the hold of Microsoft in the user experience side. With Chrome OS, Google is trying to go behind the consumer market now.

    Thankfully for Google, AOL’s walled garden approach died before Google was even launched and the world wide web was neutral and based on open standards. This made the task easy for Google and they didn’t have to worry about ISPs controlling the last mile to users’ computers. Probably, this could be why Google never talked about the last mile ISP marketplace and internet itself. Google knew that the internet should be neutral without a class system for their vision to be successful and, hence, their support for net neutrality initiatives.

    As more and more users rely on mobile phones for their web access, it became crucial for Google to get a hold here. Initially, they relied on Apple to reach the consumers. But I am sure it was never their long term strategy. With Apple’s thirst for a maniacal control of their platform and their own plans for a cloudy future, it was just a matter of time before Google found their own way. Google could not rely on the competition of proprietary mobile operating systems for their strategy. The best option for Google is to have an open platform without any of their competitors exerting control over the platform. Android was a result of this thinking and the need to control the user experience in the mobile space. Now, Android is already on ebook readers and other entertainment devices. This gives Google an opportunity to reach the entertainment market controlled by Apple, Microsoft, Sony, etc., in their quest to organize world’s information.

    One of the biggest obstructions for Google in their march towards their stated vision is the control exerted by the mobile network operators. Even though Google was lucky not to face the AOL walled garden, it is different with the mobile operators, especially in the United States. The monopoly like power exerted by these mobile operators is one of the reasons for a slow adoption of mobile in the US (compared to some other countries in the world). Google has been at the forefront of the efforts to thwart the hold mobile operators have on their users. By “participating” in the 700 MHz spectrum auction, Google forced the hands of FCC to impose open standards. Couple of days back, Google asked FCC to designate Google as one of potentially several administrators of a white spaces geolocation database. However, these efforts by Google may only yield a slower change and the lack of speed in this change could be potentially damaging to Google in the long run. One way to accelerate the process of “opening” up the mobile network space in US is by removing the operators’ hold on their customers’s experience in the mobile web. It involves ensuring the access for open handset devices. It is also important to educate the US customers about the advantages of using operator neutral open devices. Such actions will loosen the hold mobile operators have on their customers. Once this hold is loosened up, Google can easily gain better control over the mobile platforms. In my opinion, NexusOne is an attempt by Google to warn the telecom operators to open up their devices. If the telecom operators refuse to budge, Google could, then, nudge them out by reaching to users directly. If the mobile operators fall in line, Google will just let them continue with their operations and just focus on organizing all of the world’s information. This, probably, is the reason why Google has not subsidized the phone. They may end up doing it if it becomes a necessity.

    As I pointed in my above mentioned post,

    Google takes an entirely different approach to putting their products into mainstream use. They don’t compete with other products head on but, rather, slowly change the consumer behavior towards Google products.

    This is how I see the release of NexusOne too. Google doesn’t want to compete with other companies offering handsets. Rather, they want to change the mindset of consumers towards having an open handset that will work with any network in any country. Once users get accustomed to this philosophy, it will be a cakewalk for Google to dominate the mobile web on their march towards achieving their vision of organizing all of the world’s information. What do you think?

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  • Video: Google's Vision Of Cloud Computing

     

    From time to time, we highlight the visions of different vendors in the cloud computing marketplace. In this video, Google offers their take on Cloud Computing.

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  • MySQL, Oracle And Cloud Computing

     

    Image via CrunchBase

    Ever since Oracle announced the acquisition of Sun Microsystems along with MySQL, all hell broke loose in the open source community. With EU questioning the deal, there is a war (of words) erupting inside the community with one side asking EU to block the deal or, at the very least, change the license to another open source license from GPL and the other side urging EU to allow the transaction to go through. Even though I have no love for Oracle, I think it is time to let the deal go through at least for the sake of Sun employees who are sitting there with their future unknown. At the same time, I am not unduly worried about the future of MySQL because I have complete confidence in the open source license of MySQL. Let me try to explain my position here in this post.

    For the sake of argument, let us consider the hypothetical scenario of Oracle killing off MySQL. This leaves us with the only option of going with one or more of the MySQL forks. Such a scenario is perfectly fine for most of us except a handful of people who are either packaging MySQL into a proprietary software or keen on building a business making money from a dual licensing scheme like the one that MySQL uses now. If you look at how MySQL is being used in the world, it is easy to see that only a small percentage of users are affected by Oracle killing MySQL. Now, if you factor in the odds of Oracle resorting to such an action and the associated PR impact, you are left with only 2-3 people getting affected. They are the ones who are planning to run a business using a dual licensing scheme on a MySQL fork. I can assure you that these 2-3 people are quite capable of taking care of themselves and we need not waste EU’s taxpayer money and our valuable time fighting for them. I want to emphasize once again that the only business model that will get affected in the case of Oracle killing MySQL is the dual licensing scheme. Everything else, including the hugely successful support services model, will continue to thrive.

    Now I am going to address the “Cloud Computing” part of the title. Richard Stallman and some of the free software evangelists dismiss Cloud Computing as an attempt to push vendor lock-in through the backdoor. There are others like Tim O’ Reilly who advocate the line that we should not worry about licensing and, instead, focus on ensuring open architectures and standards. On the other hand, I have argued many times in this blog about the importance of open source from a moral and strategic point of view. However, as noted by the industry observers including Matt Asay and Index Ventures general partner Bernard Dallé, cloud computing may turn out to be the best way to monetize the open source software in the coming decade.

    If you are wondering how this argument fits into the MySQL show, I would like to argue that cloud computing will ensure that (forks of) MySQL will continue to live and serve the needs of the users as before. Here is my line of argument but feel free to poke holes into it (it will help me tweak my understanding of the open source marketplace). Already big cloud infrastructure players are offering cloud based services relying on MySQL. Amazon has started offering MySQL like capabilities in the name of Amazon RDS (note the absence of the term MySQL in the name), Joyent is offering MySQL accelerator and Rackspace is partnering with FathomDB to offer their own MySQL offering. Of the above three examples, Amazon and Rackspace jumped into the game after the announcement of Oracle-Sun deal. These players are not there because they are trying to squeeze out as much revenue as possible before MySQL goes under the water. They are there for a long haul which implies that they will be forking MySQL or supporting one of the forks. Let us not forget that Rackspace has committed resources to Cassandra project because they have plans to offer an open cloud alternative to Amazon’s SimpleDB and Google’s datastore. I am pretty sure Rackspace will spend some of their resources on a MySQL fork to keep the project going. There is a good chance that Amazon might also support the project even though they have the ability to absorb many of the current MySQL employees and keep the development for their in-house usage (Thanks to GPL’s still existing SaaS loophole). In fact, these cloud vendors may even end up supporting a neutral MySQL fork and, then, use their in-house expertise to differentiate themselves from the competitors. With more and more cloud vendors offering some form of service based on MySQL, the longevity of MySQL increases. These vendors, in their own self interest, will ensure that a fork of MySQL live as long as people use relational databases.

    I think it is time for some sanity to prevail in the community and let Oracle absorb Sun and MySQL. The very nature of open source will ensure that users are never left in the lurch. MySQL and any other open source software absorbed by proprietary vendors in the future will survive irrespective of what the new owner does to the OS software they buy. Along with other factors, cloud computing will also help them survive.

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