This paper examines the competitive landscape of cloud computing, focusing on how Google and Microsoft approach the market from fundamentally different organizational and cultural starting points. The analysis evaluates each company's implementation challenges, internal system compatibility, and strategic adaptations required for cloud success. Google's "Rule of 20%" innovation culture and early investment in platforms such as AppEngine and Python are contrasted with Microsoft's difficult transition from single-user operating systems and productivity software toward a multi-tenant, enterprise cloud platform built on .NET. The paper concludes that Microsoft faces considerably greater obstacles and must cultivate a culture of innovation to remain competitive.
Google, Microsoft, Yahoo, and other technology leaders are competing for a share of the rapidly growing and highly profitable cloud computing market (Moore & Hebeler, 2009). Each of these competitors brings a unique set of strengths and innate organizational capabilities to this competition. The intent of this analysis is to evaluate the implementation difficulties, changes required within their organizations, compatibility with existing systems, and anticipated business changes necessary for each company to succeed.
Google has the advantage of having built a culture that thrives on innovation and prides itself on the "Rule of 20%," meaning engineers have the opportunity to spend one-fifth of their time developing new products (Chesbrough, 2011). This has propelled the company's internal systems, implementation plans, and approaches to system compatibility far beyond most competitors in the cloud arena (Upson, 2011). Fully 57% of total Google revenues today are derived from products and services initially developed through the "Rule of 20%," including the Google App Engine, which forms the foundation of their cloud computing initiatives (Anthes, 2010).
Google has also been pioneering the development of rapid development platforms and programming languages, including Python, now one of the most popular platforms globally for web-based software development (Golden, 2009). Google's culture, internal systems, and approach to building public cloud computing platforms continue to set a very rapid pace, second only to Amazon and its Web Services business unit, which according to many estimates is responsible for 80% of all cloud hosting today (Chesbrough, 2011).
Microsoft has traditionally derived the majority of its revenue from its operating systems and Microsoft Office products, with only a small percentage generated by development tools and platforms. The Microsoft .NET platform, which began as an initiative to create a next-generation operating system, is today the basis of their cloud computing platform and strategy (Upson, 2011). Microsoft's transition from being a provider of personal productivity applications and PC-based operating systems has been a difficult one. Its internal systems, implementation planning programs, and approach to defining system compatibility have all been oriented toward single-user operating systems rather than the virtualization or multi-tenancy that characterizes cloud platforms.
The transition continues to involve attempting to build an enterprise cloud computing application development platform using .NET while leveraging its sizable corporate customer base accumulated through years of operating system sales (Golden, 2009). As a result, Microsoft has had to redefine its application development, delivery, support, and service programs to ensure a more flexible and rapid development cycle.
Between Google and Microsoft, the latter will face the greater challenges in building a stronger and more stable cloud computing business over time. Google's culture thrives on innovation and will continue to benefit from exceptional insights generated through the "Rule of 20%" concept. The alignment of internal systems with that culture ensures that Google's growth in cloud computing will continue at a rapid pace. Microsoft will need to concentrate on fostering the same level of innovation and creativity in order to survive and keep pace with competitors in the cloud computing market.
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Golden, B. (2009). Cloud computing: "Be prepared." EDUCAUSE Review, 44(4), 64.
Moore, D., & Hebeler, J. (2009, February). Computing in the clouds. Dr. Dobb's Journal, 34(2), 16–21.
Upson, S. (2011). Cloud computing. IEEE Spectrum, 48(1), 43.
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