The Cloud Wars

This week, two major announce­ment have kicked off what I would call the cloud war: The announce­ment that Google will get into the OS busi­ness and the announce­ment that Google is launch­ing its Google apps suite out of beta. Next week, at its World­wide Part­ner Con­fer­ence, Microsoft will stake its posi­tion when it comes to that new play­ing field.

A bit of history

In order to under­stand the impor­tance of the cur­rent shift, one needs to study a bit of his­tory. Since the dawn of the per­sonal com­puter era, appli­ca­tions have been writ­ten and run­ning largely on the user’s desk­top. In the mid-90s, Sun Microsys­tems co-founder John Gage started claim­ing that “the net­work is the com­puter.” Marc Andreessen, co-founder of Netscape, the lead­ing browser com­pany at the time, was claim­ing that Netscape would “reduce Win­dows to a set of poorly debugged device drivers.”

How­ever, due to lim­i­ta­tion in terms of band­width and com­puter power, this vision didn’t come to be until well into our cur­rent decade. Today, indi­vid­u­als still mostly use Win­dows, even if most use it pri­mar­ily to launch their web browser.

In more recent times, the avail­abil­ity of always-on, higher speed inter­net access, has allowed com­pa­nies like Google to start offer­ing more pow­er­ful web­sites, which took on fea­tures of full-fledged soft­ware appli­ca­tions. Lever­ag­ing tech­nol­ogy that first saw the light of day in the 1990s (Flash was born in 1995 and XML­http, which pow­ers AJAX appli­ca­tions was cre­ated by Microsoft in 1999), those appli­ca­tions started offer­ing com­pelling com­peti­tors to exist­ing products.

One the leader in that rev­o­lu­tion has been Google. First with the release of Gmail and then with the release of Google Apps, the com­pany has been work­ing on offer­ing online ver­sion of tools like email, word pro­cess­ing, spread­sheets, and pre­sen­ta­tion soft­ware. Lever­ag­ing its estab­lish power in the adver­tis­ing space, Google has fig­ured that, by offer­ing doc­u­ment and email man­age­ment fea­tures to its users for free, it could cre­ate extra adver­tis­ing inven­tory that it could then resell.

So Gmail, Google Docs, and Google Apps were born. Since they were con­sumer focused prod­ucts, pre­sent­ing them as prod­ucts “in progress”, com­plete with a beta stamp and an advertising-based model. Jeff Jarvis war­rants that such act was not only bourne out of humil­ity but also as a  call to col­lab­o­rate. This week, how­ever, the com­pany decided to shed the beta logo for most of its applications.

With its direct lan­guage to IT man­ager and its mes­sage emerg­ing from the enter­prise group, Google is mak­ing it clear that this announce­ment is not tar­geted at the con­sumer space. In a sign of grow­ing busi­ness matu­rity (most soft­ware com­pany attempt to appeal to the enter­prise space as they get older and need to develop more pre­dictable finan­cial ground­ings), the com­pany is now try­ing to appeal to the enter­prise space, aim­ing its offer­ings towards a space that has tra­di­tion­ally been con­trolled by Microsoft (with its Office Suite) and, to a lesser extent, IBM (with its Lotus divi­sion offerings).

Poorly debugged device drivers?

But Google real­izes that much of what it does is depen­dent on the con­tin­ued good­will of the dif­fer­ent oper­at­ing sys­tem providers and browser sup­pli­ers. Were it not for web browsers or oper­at­ing sys­tems, Google could not exist. Last year, the com­pany started reduc­ing that depen­dency by intro­duc­ing its own web browser, named Chrome. Chrome was actu­ally quite inter­est­ing in terms of browser devel­op­ment as it was the first browser to treat each win­dow ses­sion as a sep­a­rate appli­ca­tion, ensur­ing that if one web page failed, the other tabs would not. This could be seen as some­thing not com­pletely unlike the way an oper­at­ing sys­tem (or ker­nel, etc) doles out mem­ory and CPU power to each of the appli­ca­tions it deals with and orches­trate who gets what.

The unstated strate­gic goal of the Chrome browser is to help reduce the dom­i­nance of Inter­net Explorer in the online space while pro­vid­ing Google with more of a say in terms of where web stan­dards were head­ing (I’m sure some peo­ple will try to debate that point but, if Chrome is not intended as an Inter­net Explorer com­peti­tor, why is the only “offi­cial” ver­sion of the browser a Win­dows one, with no such offer­ing on OSX or Linux?)

Chrome is not only an attack on Microsoft’s browser dom­i­nance in the web space but also an attempt at ensur­ing that nei­ther Microsoft NOR Adobe get con­trol of the future of web appli­ca­tions. Google’s CEO Eric Schmidt knows how try­ing to fight Microsoft can dis­tract a com­pany from very real threats by other unex­pected con­tenders: he did come from Sun Microsys­tems and Nov­ell before join­ing Google and saw, first-hand, how those two com­pa­nies saw their focus on unseat­ing Microsoft’s dom­i­nance in their respec­tive areas blinded them to the threat that Linux came to be to both of them, ulti­mately doom­ing each of the com­pa­nies’ efforts with­out Microsoft hav­ing to do too much.

So, as a vet­eran of the OS wars, Schmidt is now being care­ful in bal­anc­ing its entry in the space. On one hand, he doesn’t want to offend exist­ing part­ners like Apple and the open source com­mu­nity. On the other hand, he needs to ensure that his company’s offer­ings are actu­ally going to appeal to hard­ware ven­dors. The OS will ulti­mately be lit­tle more than the min­i­mum required to make the Chrome browser run. That means it will include an IP stack, some basic dri­vers to inter­act with the key­board and screen (or a way for com­pa­nies to offer those) and a UI that will be a full screen ver­sion of the Chrome web browser.

The descrip­tion of the OS, as stated in the press release, describe it as such:

Google Chrome OS is being cre­ated for peo­ple who spend most of their time on the web… with­out wast­ing time wait­ing for their com­put­ers to boot and browsers to start up. They want their com­put­ers to always run as fast as when they first bought them. They want their data to be acces­si­ble to them wher­ever they are and not have to worry about los­ing their com­puter or for­get­ting to back up files… Even more impor­tantly, they don’t want to spend hours con­fig­ur­ing their com­put­ers to work with every new piece of hard­ware, or have to worry about con­stant soft­ware updates.

Put quite sim­ply, this is a web browser with the basics to make it run online and offline (the offline com­po­nents prob­a­bly being based on Google Gears (already built into the Chrome browser) or some HTML 5 offline approach). Users will not really store much on their com­puter but every­thing will be sit­ting on Google’s servers, acces­si­ble from any­where. Oper­at­ing sys­tem upgrades will hap­pen auto­mat­i­cally in the back­ground and every­thing will run in the browser. For those peo­ple expect­ing to run Fire­fox (or any other appli­ca­tion) on this thing, sorry… it won’t happen.

Google’s view is that every­thing will run online and all data will be stored online. In tech­ni­cal terms, this is called send­ing infor­ma­tion into “the cloud.”

How­ever, there’s the ques­tion of how to plug com­po­nents in there. I sus­pect that Google will lean heav­ily on its part­ners to release any device related dri­vers through the equiv­a­lent of an online appli­ca­tion store, sim­i­lar to the app store on the iphone, where Google con­trols the expe­ri­ence in terms of what gets installed on the user’s desk­top and can recall or upgrade an install if needs be. The idea being that the hard­ware device does not need much power as most every­thing is com­ing from the web.

Devel­op­ers will not be allowed to develop any­thing that runs on the machine itself:

For appli­ca­tion devel­op­ers, the web is the plat­form. All web-based appli­ca­tions will auto­mat­i­cally work and new appli­ca­tions can be writ­ten using your favorite web tech­nolo­gies. And of course, these apps will run not only on Google Chrome OS, but on any standards-based browser

With these few words, Google is tak­ing the same approach as Apple first did when itin­tro­duced the iPhone: don’t look to us to pro­vide you with any SDK, the web is the plat­form. Build your appli­ca­tion using HTML 5 and all will be OK. This basi­cally means that right now, Google either has no inten­tion to pro­vide an SDK or will keep it acces­si­ble only to select part­ners who want to inte­grate with their OS. They will first pro­vide access to the device mak­ers and then, over time, will cre­ate an SDK and an app store that they may even be will­ing to share with part­ners by white-labeling that store to sweeten the deal for any part­ner will­ing to install the OS.

The rea­son I sus­pect this would be part of the strat­egy is that pric­ing will not be a heavy decid­ing fac­tor in whether part­ners will adopt the new OS and Google des­per­ately needs the new OS to be imple­mented as widely as possible.

Many have said that cost was a large part of their strat­egy but I sus­pect it can­not be: Con­sumers have already been trained to con­sider the oper­at­ing sys­tem as a free­bie or low cost tool. On the win­dows side, con­sumers see the OS as some­thing that comes with their machine, not some­thing they buy sep­a­rately. This effec­tively brings the price to 0. Even Mac users, who gen­er­ally tend to be more will­ing to pay for prod­ucts offered by Apple, were grous­ing at pric­ing on OSX, forc­ing the com­pany to take a deeply dis­counted approach when offer­ing the next ver­sion of its oper­at­ing sys­tem for about the price of din­ner and a movie. And pric­ing has proven to be a con­trar­ian indi­ca­tor in the net­book mar­ket, as con­sumers decided to pay extra for the Win­dows XP ver­sion of devices that also offered the same hard­ware at a lower price point with Linux.

Inter­est­ing timing

Hav­ing estab­lished that the com­pany is look­ing to get more con­trol of its end to end expe­ri­ence, one big ques­tion is why do it now? Why not do this, for exam­ple, at their devel­oper con­fer­ence, as they did for Google Wave? Why announce some­thing that will not be avail­able in the near term?

My sus­pi­cion here is that part of the rea­son for this vapor­wave release is that Microsoft is about to unveil a series of cloud focused ini­tia­tives at its World­Wide Part­ner Con­fer­ence next week: those offer­ings will include a major push for their cloud plat­form, Microsoft Azure, along with announce­ments regard­ing the Gazelle project (their own browser as an OS offer­ing), and Office 2010, a sub­stan­tially revamped ver­sion of the pop­u­lar suite that will move col­lab­o­ra­tion and syn­chro­niza­tion front and cen­ter. At its core, the revamped Office suite will not only include the exist­ing com­po­nents and fea­tures of older ver­sion but its guts will have been rebuilt with some DNA acquired as part of the acqui­si­tion of Ray Ozzie’s Groove Net­works and its offerings.

I sus­pect that Groove and Ozzie have Google shak­ing in its boots. Much of Google’s strate­gic mes­sage is that it is more col­lab­o­ra­tion friendly than Office and, by leav­ing one’s doc­u­ments on Google’s servers, one doesn’t have to worry so much about revi­sions and ver­sion­ing. With Office 2010, Microsoft is fix­ing these prob­lems and telling cor­po­ra­tions that while Google’s mes­sage is nice, your pro­pri­etary infor­ma­tion will be sit­ting on Google’s server. How about get­ting the same type of func­tion­al­ity but keep the doc­u­ments on your own servers. Because most cor­po­rate IT depart­ment tend to be para­noid when it comes to their cor­po­rate data, the Microsoft mes­sage will res­onate better.

So Google is not start­ing to posi­tion itself in the con­sumer mar­ket, hop­ing that appli­ca­tions which can run in the con­sumer world will even­tu­ally help tear down the cor­po­rate walls (to date, few cor­po­ra­tions have adopted Google Apps and, if Microsoft offers a com­pet­i­tive prod­uct, I sus­pect it could remain that way for at least a decade). Hav­ing to do some­thing, they have now decided to attack a core tenet of the Microsoft empire: its win­dows OS division.

The bat­tle lines are now drawing:

• Google is assert­ing that the world runs solely within a browser and all appli­ca­tion logic is in the cloud; Microsoft will assert that sub­stan­tial amounts of com­plex tasks require the power of the desk­top and the cloud is there pri­mar­ily as a tool for col­lab­o­ra­tion and synchronization.
• Google is assert­ing that desk­top PCs are merely thin clients; Microsoft is assert­ing that desk­tops are still the cen­ter of the com­put­ing experience.
• Google is assert­ing that the net is safe enough a place to leave all your infor­ma­tion; Microsoft is assert­ing its not.
• Google is assert­ing that devel­op­ers don’t want to run appli­ca­tions natively on a machine; Microsoft is assert­ing that the tight­est inte­gra­tion hap­pens at the OS level.

Each com­pany is pre­sent­ing a dif­fer­ent vision of the cloud. I can’t say which is right as both offer­ing com­pelling advan­tages and sub­stan­tial flaws but I can high­light one impor­tant fea­ture: in the future the soft­ware you are run­ning will be con­nected to the inter­net most of the time and still be able to work when offline. And in that future, I sus­pect that the notion of soft­ware as a prod­uct you buy will prob­a­bly dis­ap­pear, with soft­ware as a rental model becom­ing the emerg­ing approach. And I also believe that this is the begin­ning of the cloud OS wars.

Update: As expected, Microsoft sends out its reply.

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