Google's biggest threat is no longer Microsoft. It is itself.
As the company harvests copious quantities of personal data, it becomes dramatically better at serving customer needs...
...and at freaking them out over privacy concerns.
In other words, Google gets stronger with every Google Doc created, every Google Voice call dialed, and every Gmail e-mail sent. It becomes stronger because data is the heart of the Web's biggest businesses, as Redmonk analyst Stephen O'Grady implies.
But in so doing Google also becomes more threatening to the very consumers it is trying to serve.
Google Dashboard is meant to change this by putting consumer data back in the hands of consumers. It's a move that follows on Google's earlier pledge to "open data" and its Data Liberation Front.
As CNET reports, Dashboard lets people review the personal data Google has stored for them, delete it, and alter future collection policies. It's a great way for Google to mollify concerned users, putting control back in their hands.
Still, it's almost certainly never going to be used by the vast majority of Google users. Ever.
Why? Because for all our hand-wringing over privacy--and for good reason--the reality is that most of us, most of the time, really don't care. Or, rather, if accessing useful services or getting work done more efficiently requires some privacy concessions, we gladly concede.
It's not that we don't value our privacy. It's just that in many contexts, we value other things as much or more. We weigh the risks versus the benefits, and often the benefits trump the privacy risks.
It's the same thing with file formats. For years we've been agonizing over Microsoft's lock-in of customers through proprietary file formats (.pst, .doc, etc.). Now Microsoft is opening up the specifications for file formats like .pst (Outlook file format), and yet it will almost certainly change little to nothing in what products most people use most of the time.
People don't use Microsoft Office because they're forced to. They do so because it's convenient. (Yes, an argument can be made that it's convenient because Microsoft has forced network effects through lock-in.)
This, incidentally, is exactly the reason that Wednesday night I declared a ban on Microsoft Office in our family in favor of Google Docs--and didn't opt for OpenOffice (which we also use). I got sick of having to recover documents and perform other IT tasks related to a locally installed office suite, open source or proprietary. And I find it easier to let Google handle the back-end IT operations.
I wasn't trying to evade lock-in. I was trying to increase personal happiness.
Am I concerned about Google snooping on the documents we write and store in Google Docs? Let's just say I worry more about my time fixing Office than whether Google gleans any information from my 12-year old's seventh-grade essay.
Dashboard leaves Google in the prime position of being able to honestly say that it doesn't control user data, while still delivering increasingly beneficial services based on that data. It will not change the way that the vast majority of consumers use Google, but it just might change the way they think about Google.
A very smart move by Google, one that all data-driven businesses should emulate.
Follow me on Twitter @mjasay.
One of the hardest parts about launching a new product is knowing what prospective customers want to buy. Sure, some companies like Apple can impose their product visions on the public, but most vendors need to fulfill pre-existing product requirements, not create new ones. For everyone but Apple open source offers a great way to perform product management.
This is the sort of product marketing/management that most software vendors do. Focus groups, interviews, surveys, etc., form the basis of the product requirements documents (PRDs), which are then used to build products.
Open source may provide a better, more efficient way. As Stephen Walli puts it:
Open source software is a key economic driver from an engineering efficiency and software reuse perspective, but it also opens new opportunities and additional tools for product management to engage better with customers and improve both the top line and the bottom line.
By providing free access to one's product, coupled with the ability to modify it to suit one's needs, open source enables users to describe exactly what they'd buy from the original developer of the open-source project.
My employer, Alfresco, provides an example. The company was founded to provide an open-source alternative to incumbent vendors in the enterprise content management (ECM), Web content management (WCM), and records management (RM) markets. For years, our marketing has targeted buyers in these markets, pitching a low-cost, high-value alternative to proprietary ECM/WCM/RM.
Our customers didn't get the memo. While we were talking about ECM, many of the roughly 30,000 people downloading the product every month were using it as a foundation upon which to build their own applications, most of which would never be classified as ECM. They were creating their own category of infrastructure/middleware, using our technology.
The content application server was born, and we almost missed it, despite the fact that it was happening with our code. We were so busy marketing our vision that we almost missed listening to our users' vision(s). This new vision on an old way of using our product will significantly impact everything we do for years to come.
This is a major opportunity for open-source vendors. As Vinnie Mirchandani (@dealarchitect) suggests, "strategic apps are being custom built" by enterprise IT, not IT vendors. Increasingly, as Stan Rose, managing director, technology risk management, Bank of New York Mellon, told me a few years back, open source is the innovation platform upon which such strategic applications are built.
This is great news, because it means open-source companies, if they listen to their users, are well-positioned to build platforms that can become the lifeblood of enterprise IT. ReadWriteWeb rightly concludes that Twitter's "success has been credited to its ability to transform from a basic life streaming service into a platform," with an outsized, $1 billion valuation to match.
Few open-source companies wouldn't salivate to have the same valuation.
Redmonk's James Governor defines this platform opportunity in the context of "tools," but I think we're talking about the same thing. Open-source companies and communities have the potential to deliver an exceptional platform experience, one built on "tools" in Governor's sense of the word, provided they listen to their users to know what sort of "tools" to build.
There are billions to be made. It's just a matter of listening.
Enterprise IT sometimes behaves like the group of teenagers I counsel on a weekly basis as part of my church responsibilities: "Damn the future, let's live for the present!"
Very much like Apple on the consumer level, (commercial cloud providers) Google et al demand sacrifices in return for convenience. Perhaps--or make that likely--realizing that businesses will invariably sacrifice the future at the altar of the present. We'll give you the convenience and time to market now; just don't expect to leave later.
And it's hard to blame (enterprise IT) for that, honestly. They've got jobs to do and kids to feed, and their blind trust in the technology industry to police itself and not lock them in this time as they've been locked in so many times before is as Peanuts touching as it is naive. Whether Lucy will yank the football out from under them yet again depends, as far as I can tell, on open source.
Why open source? Because open source helps to keep vendors like Google and Amazon honest by offering open alternatives to closed clouds (e.g., Eucalyptus).
Also, it's very possible that cloud computing will be nudged open in important ways due to the furor raised over proprietary practices.
This isn't simply a matter of open-source advocates castigating companies for locking in customers. It's also a clever sales tactic that an increasing array of companies will use to win over customers leery of signing over their data to a proprietary cloud provider, seemingly once and for all.
As the cloud gains relevance, we'll see an increasing array of companies that deliver software as a service (SaaS), but provide an "eject" mechanism via open-source, on-premise offerings. SugarCRM does this now, and I think we'll begin to see this more and more often.
The reality is that the service will be compelling enough to keep customers from bolting. But offering the safety blanket is worthwhile, even if no one ever uses it (and, frankly, I doubt many will, because very few are capable or running their own cloud, and even fewer want to).
O'Grady concludes that "Whether open source takes a role front and center...remains to be seen, but is certain that it will--as it has to date--have a crucial role in shaping the cloud market to come." How significant that role is largely up to us.
Disclosure: I am an advisor to SugarCRM.
Follow me on Twitter @mjasay.
I hate to keep beating this drum, but I read Stephen O'Grady's report on Brad Smith's keynote at the Open Source Business Conference (OSBC) and thought it was worth highlighting. Stephen isn't prone to exaggeration or zealotry. So when he writes these words, it's worth considering:
Microsoft has a standing annual legal bill, we're told, of ~$100 million dollars to defend itself from patent related litigation. Unless the licensing revenue stream easily eclipses that amount, why is the current system worth defending? Why does Microsoft insist on speaking out in defense of a mechanism that appears, if anything, to negatively impact its shareholders? It seems like a flawed equation.
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