Google's Office add-on
June 06, 2006
Google Spreadsheets, released in beta today, is being touted in both the print and online media as a challenger to the ubiquitous Microsoft Excel - part of Google's mythical "Office killer" suite of online applications. The New York Times headline runs "Google Takes Aim at Excel." CNET says, "Google Spreadsheets turns up heat on Excel." John Battelle is more blunt, summing up the move as Google's way of saying "FU, MSFT."
This view, while understandable, strikes me as being a complete misreading of Google's intent. What, after all, is the single most important feature of Google Spreadsheets? The single most important feature - by far - is its compatibility with Excel. You can export an Excel file into Spreadsheets and import Spreadsheets data into Excel. Spreadsheets is not an alternative to Excel so much as an extension or an add-on to the program, one that, in essence, provides a simple web interface to the Microsoft application. To put it into terms I've been using recently, Spreadsheets is a complement to Excel. It actually makes Excel more useful - and hence more valuable. Let me repeat that: Spreadsheets makes Excel more valuable.
So why would Google put out a product that makes its arch-rival's product more valuable? Because Google doesn't want to compete with Office. It sees Office as part of the existing landscape, and it wants to build a new layer of functionality on top of that landscape. No one is going to stop buying Office because Google Spreadsheets exists. But what people may well do is use Spreadsheets for sharing Excel and other data online - rather than just emailing Excel files around, as they used to. If Google Spreadsheets competes with a Microsoft product, it competes with a Microsoft product that doesn't yet exist: Excel Live, Microsoft's own web interface for Excel data.
Google, as it has itself said repeatedly, is not interested in fighting old wars. Microsoft won the war for spreadsheet applications. Google's fighting a new war, a war that's barely begun. It's the war for web services. And it knows that, for the foreseeable future, these services will not displace desktop applications but extend them. Google is happy to make Excel more valuable as long as it also encourages greater use of the Internet and, in particular, attracts more traffic to its own sites. In a way, Spreadsheets is not only an Excel complement; it also turns Excel into a complement to Google's own services and the lucrative ads that those services carry.
This is very interesting. Microsoft has not release a public Excel service, but Office 12, when it comes out, will have Excel Server built in. Excel Server does have the functionality you describe: set up a spreadsheet that everyone can use via web services. I've seen a few pretty cool demos. With their interface, you can view the spreadsheet in a local version of Excel, in a browser, or make the functionality of the spreadsheet available via web service calls.
I haven't heard them promote its use *outside* of an enterprise, but since the calls are all via web services, I'm sure it could be done.
It will be interesting to see how they react to Google's announcement.
Posted by: Dan Ciruli at June 6, 2006 01:02 PM
I think, you're right in that Google doesn't intend it to be an Excel killer. I wouldn't be shocked though, if users do bring it into the work place, and replace Excel with it. I (and many others) do this with GMail now.
And, yes, I *am* going to stop buying Office for personal use, because the online alternatives are adequate for my personal needs. I'll satisfice.
Posted by: Kingsley Joseph at June 6, 2006 01:06 PM
I hate to say this, Nick, because I've kind of gotten used to disagreeing with you and I don't like to give up on a good thing, but I think you're dead right. Spreadsheets isn't an Excel-killer just as Writely isn't a Word killer and Gmail isn't an Outlook killer -- if anything, Writely and Spreadsheets extend those products by adding collaboration and other features to them. Hmmm. Embrace and extend. Wonder where I've heard that strategy before?
Posted by: mathewi at June 6, 2006 02:21 PM
Posted by: rajAT at June 6, 2006 02:33 PM
It is interesting, however, that Google "ignored" the new excel format - which will be easier to integrate as web service.
Posted by: Rogel at June 6, 2006 03:38 PM
I agree that Spreadsheets is more of an extension and less of an Excel killer with one caviat - at the ENTERPRISE level. I do not think Google’s intent is to target the enterprise.
I do however believe they are putting together a powerful suite of PERSONAL products that can and will replace traditional Microsoft tools such as outlook (gmail), word (writely), excel (spreadsheets). I would wager that you will see a PowerPoint "enhancement" coming soon.
Take all of those tools bundle them in Google Pack with its other applications including photo sharing and management, anti-virus, browser (firefox), etc. and you have a comprehensive personal suite of products that poses a significant challenge to Microsoft (again not on the enterprise side but on the personal side).
Once Google has all of these personal users using these free web based apps there will be a natural extension into the small and medium business market. That is where Microsoft will be in serious trouble because that is where Google will attack Microsoft on their traditional software model and revenue.
Anyone who doesn’t think this is happening just isn’t paying attention. Google is not altruistically building nice add-ons and extensions to help their rivals, they are building a Trojan horse through various core personal applications to win!
Posted by: Alex Bard at June 6, 2006 05:55 PM
I wouldn't be so quick to write this off as something that's not intended to compete with Excel... it may not right at this moment, directly, and yes, it's clear that Google is using a sort of web-based judo to avoid direct competition with Microsoft's core strengths, but when I hear about how easy a product makes itself in integrating with an existing product, I don't think about it in terms of parasitic extension. I think about it in terms of Microsoft and Netware.
"Huh?" you say? Simple; once upon a time, Netware dominated the LAN server market. Microsoft wanted in and created Windows NT to get there. And to engage that entrenched market, what they did was make it really, really easy to interface with. Services for Netware made it dead easy to drop a Windows NT server into a Netware environment. Similarly, their integration with Unix and Mac OS was well beyond what any of those systems were doing to talk to them. Microsoft made their product the easy choice, because it was the one you could drop in easily just about anywhere to talk with just about anything.
And the same thing happened with Word versus the rest of the word processing application market... Word, out of the box, opened up just about anything you would throw at it. Other products didn't; again, Microsoft made Word the easy choice to replace anything with, you could still open and use your old files.
So the first thing you do, if you do want to compete with a current, entrenched product, is you make your own really, really easy to use with it. Complementary, even.
I don't have a crystal ball either, of course, so I can't say that's their ultimate intent, but I think it's shortsighted to say it's not at this point. Or it may also just be that it's de rigeur to have Excel compatibility in competing applications--I can't think of any other spreadsheet alternatives that don't also have that capability built-in, and so this might mean nothing at all.
Posted by: Scott Wilson at June 6, 2006 08:21 PM
In the end, "don't be evil" will prove to be a better motto than "crush anyone who gets in our way."
Posted by: Zephram Stark at June 6, 2006 09:25 PM
By your logic in this post, Google Search (free) is making Microsoft Windows more valuable - yes it competes with MSN, but in the end, its having the largest marketshare in search business. I can also give the same logic for Google Desktop which is ending up making Windows more valuable - here there is no competing product from Microsoft.
I think its easy and nice to think in economic terms of complements and substitutes (see my post), but surely the marketplace is a hell more complicated.
Posted by: Nitn Goyal at June 6, 2006 11:11 PM
80+% of Excel users really need Excel Lite - they do not use pivot tables, graphs etc
so if that Excel Lite is available for free from Google, Zoho etc why would I pay MS?
It is somewhat similar Adobe not wanting MS to give away PDF for free...puts pressure on their other products too..
Posted by: vinnie mirchandani at June 7, 2006 01:27 AM
As a owner of 2 nano businesses, I eagerly await the multitude of tiny business applications that are washed ashore by the Web 2.0 wave. They are useful and when they are provided by a single vendor like Google, there is an implicit level of trust and reliability.
Currently, Gmail is hosting my email server and I am seeing if I should use Google Calendar to manage my website's events calendar.
Small businesses with no IT departments (like mine) will find Google's package of online applications most useful. In short, Google is competing with the former Great Plains division in Microsoft. And in emerging markets where the price for software will always be too steep unless it is $0.
Posted by: Allen Tan at June 7, 2006 02:42 AM
Google doesn't want to compete with Office. It sees Office as part of the existing landscape, and it wants to build a new layer of functionality on top of that landscape.
I could never understand why IBM didn't go in harder against Microsoft - I thought the way they effectively let MS destroy OS/2 was criminal. (Actually I still think that.) Eventually the penny dropped: they were leaving the Windows 'space' alone so that they could sell into it (hardware, middleware*, and let's not forget services), as well as selling paths out of it. I don't think IBM have got the implementation of this strategy right, for what it's worth, but the strategy does make sense.
*Or what IBM calls middleware, which translates roughly as "we're not in the application software business, honest".
Posted by: Phil at June 7, 2006 06:18 AM
Nick, Long time reader, first time commenter. I think you got it right.
It is only a little surprising that the media jumps to the conclusion that anything Google does, beta or not, will instantly become the dominant thing.
In the case of low end, on-line spreadsheets there are lots of exisiting products that are better like, iRows, NumSum, WikiCalc, etc. On the free side there is OpenOffice and StarOffice.
In terms of collaboration, I worked for Ray Ozzie at Groove Networks, now part of Microsoft. We had real time, on-line sharing of Excel spreadsheets, Word documents, and Powerpoint slides. Expect to see that functionality become more prominent in the future.
Lastly, Ray Ozzie is now CTO of Microsoft. He has a few ideas. Windows Live and Office Live will provide lots of these types of services.
I wrote a blog on this subject today on Don Dodge on The Next Big Thing http://dondodge.typepad.com/the_next_big_thing/2006/06/google_competin.html
Posted by: Don Dodge at June 7, 2006 07:21 AM
>> I am reposting this, for some reason register, login sequence did not seem to work.
I think Google is on a warpath with Microsoft, not in a direct way but in in-direct way. If this cannot be categorized as disruptive technology, what can be?
Innovators Dilemma and its sequel; Innovators solution defines this phenomena. If I recall it correctly, it was defined as a technology/process that meets the needs of the people/business that are not served by mainstream players. Price or support could be some of the reasons. There is more to this than just this definition.
Putting the sequence of things together, Gmail - for mail, Writely for word, and Spreadsheets for Excel... hmm what’s next? Yes, powerpoint... I am sure this will be released, sometime.
I am very confident someday Google will have all these technologies matured for small business to adapt.
Larry and Sergey's 2004 filing with the Securities and Exchange Commission explaines what their motto, don't be evil means to them: "We aspire to make Google an institution that makes the world a better place. In pursuing this goal, we will always be mindful of our responsibilities to our shareholders, employees, customers and business partners. With our products, Google connects people and information all around the world for free." About their search engine results in particular, they write, "We do not accept payment for them or for inclusion or more frequent updating. We also display advertising, which we work hard to make relevant, and we label it clearly. This is similar to a well-run newspaper, where the advertisements are clear and the articles are not influenced by the advertisers’ payments. We believe it is important for everyone to have access to the best information and research, not only to the information people pay for you to see."
This absolute refusal to engage in any form of conflict of interest is the key to Google's success and something that cannot be replaced with hype. Money and convenience are factors, but when developers and users have options, they'll go with the company that doesn't leverage their systems and milk their market shares dry.
Posted by: Zephram Stark at June 7, 2006 10:40 AM
A post on SVN (http://37signals.com/svn/archives2/google_flares.php) Argues that these announcements from Google are just 'flares' designed to throw Microsoft off the scent.
Posted by: mstibbe at June 7, 2006 12:12 PM
You guys really don't get software product planning and positioning. As a veteran of the 1990's Office software wars (on the Borland side), I can attest that support for alternative files formats is a feature designed to steal marketshare from the competition. It eases migration from a competitor's product to another product. Borland, in fact, did this with a great success in their Quattro Pro spreadsheet, a new entrant that quickly stole huge marketshare from Lotus 123 thanks to the 123 compatibility features- esp. an option to import or export files from the Lotus format.
Just because Google hasn't laid out their vision for a web-based Office suite competing with MS Office, or identified the market segment it hopes to capture, doesn't mean that a solid strategy doesn't exist. Google may simply prefer to keep their cards hidden for now.
However, Nick has laid out a great defense for Google in the event of an IP lawsuit from Microsoft related to reading or writing the Excel format. Google can claim that their product is merely an Excel add-on that poses no threat to Office products. Who knows, a jury might fall for that?
Is it possible that Google might actually be more interested in creating solutions that benefit people than in trying to screw over Microsoft? Could their theory of delivering what people want instead of leveraging what gives them the most market share be a sound philosophy? Is a corporation acting purely in good faith too absurd of a concept for us to consider?
Posted by: Zephram Stark at June 12, 2006 12:12 PM
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