As I expected, Henry Blodget has a interesting and on the money take on the new Google Spreadsheet. Along with Gmail and Writely, Google Spreadsheet makes the core of a free, online alternative to Microsoft Office. It’s a high profile and expensive game of Risk, where the game board is comprised of groups of computer users.
Henry begins with the potentially good part of Google’s play:
“First, if Google’s long-term ambition is to bring Microsoft down, this is, in fact, the way to do it. Google Spreadsheet and Google Word, as described, resemble classic disruptive technologies: cheaper, more convenient, no-frills solutions aimed at products with fat product margins whose complexity and usefulness have overshot the mainstream.”
He then expresses two very good concerns. First, he says, and I heartily agree, that power users who use Excel for their businesses (and their job security) are not going to dump Excel in favor of a stripped down, online alternative. Second, he wonders, as I did back during the Writely acquisition, what is the business plan here? A million users times free is still free.
It’s likely all about the almighty ad dollar, but Henry and I agree on that strategy as well:
“[N]o serious spreadsheet and word-processing user I know of is ever going to stop working on documents to click nearby ads (The “PPC ads in apps” concept is absurd).”
Microsoft is camped out on the side of the game board with all of the business and corporate users. It is heavily fortified and will be virtually impossible to displace. That was my strategy back in my Risk playing days: fortify a strategic area and let the other players fight it out for the less valuable real estate.
The reason this game is unwinnable for Google comes down to two things: the free part and the online part.
When something is free, people ask themselves two questions:
How do I know this free thing will always be available?
How do I know they won’t start charging me once I go to all the trouble to adopt and use it?
These are good questions.
When something is partially or fully online, people also have two questions:
How do I know my data is safe and won’t get lost, thereby causing me to lose my job?
How do I know all the hackers I read about in the paper won’t intercept my data and give or sell it to my competitors?
For these reasons, corporate America will not, in our lifetime, adopt online word processing or spreadsheet applications to any significant degree.
All of this means that Google is making a play for what Henry calls the “casual Microsoft Office user.” I would say it’s more accurately the casual Microsoft Works user. There are a lot of people who will adopt these free applications for personal use, but big business will not. Never. Ever.
So my specific question is how does Google think this is going to make, as opposed to cost, money?
And my general question is when and why did spending a fortune trying to hurt Microsoft by giving away free stuff become Google’s strategic business plan?