Google vs. Microsoft: Competitive Strategies and Innovation Culture

Introduction: Two Tech Giants in Competition

Both Microsoft and Google have emerged as catalysts of remarkable growth in the high-technology industry. Each company has a unique, finely tuned set of strategies for managing the innovation process, including the steps each relies on for creating new services. Both have also demonstrated remarkable success at delivering disruptive innovations in their core markets and across global consumer markets. This track record of success is no accident; there is a fierce level of intensity and competitiveness both within each company's culture and across their vast global ecosystems of suppliers, customers, and shareholders.

Both companies are working to dominate the lucrative online advertising business, a model showing the potential to become a multibillion-dollar industry over time (Finkle, 2012). Both have invested heavily in contextual search as well as in-car navigation systems, and in Google's case, a fully automated driverless car (Finkle, 2012). Both are also solidly positioned to lead the next generation of cloud computing — Microsoft with its Azure platform and Google with its AppEngine series of online platforms (Cusumano & Gawer, 2002).

The cultural strengths of Google emanate from the highly competitive academic environment of Stanford University, where the two founders graduated less than two decades ago. The culture at Stanford, and now at Google, places a high value on solving complex, challenging theoretical problems with elegant yet powerful algorithms (Dollinger, 2006). Google is also highly selective in hiring, concentrating on choosing only the most qualified candidates. This creates a culture of continual intellectual challenge and a strong focus on shared intelligence and knowledge (Badawy, 2008). It also produces a galvanizing effect in teams composed of some of the world's smartest people in a given field.

Contrary to this approach of unified effort through a shared intelligence base, Microsoft is a more fragmented organization that thrives on internal competition and the continual effort to outperform other groups with more innovative and elegant algorithms and programming (Love, 2006). The goal of this analysis is to show how the cultures of Google and Microsoft continually benefit from competition with each other. A projection is also offered regarding how each company will continue to change and grow rapidly under its current corporate culture. As with any forward-looking analysis, assumptions must be made, and they are included here.