Microsoft’s Google Fear

Knowledge@Wharton tries to answer the question: Why is Microsoft afraid of Google?

“What Google wants to do is strategically decrease people’s reliance on Microsoft. It’s as simple as that,” says Wharton management professor Raphael Amit.

Thomas Y. Lee, professor of operations and information management, sees Google’s challenge to Microsoft in broader terms. “I don’t know that I would say Google is a threat to the operating system, per se, but it is a threat to Microsoft’s business model. Microsoft has software [such as Office] that they use to leverage the operating system.”

Lee says Google benefits from two key strengths. The company gives free rein to talented people to innovate and it encourages program developers to use Google as the basis for products of their own. “Google has hired really, really smart people. Some of the smartest graduates coming out of the top computer science programs are going to Google. When you put that many smart people in one place, neat things happen. Google also has not been threatened by people working off their products. Look at all the product extensions that are tied to Google Maps.”

Balaji Padmanabhan, professor of operations and information management at Wharton, agrees with Whitehouse that “there is a move toward PCs that don’t have a lot of software installed on them, where most applications can run off a network.”

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Rajesh Jain

An Entrepreneur based in Mumbai, India.