The Google way
Google is a relatively late comer to both the smartphone market and the software/productivity world. Despite this apparent handicap, the company has found ways to control global smartphone market share and is changing the way in which productivity software is accessed and used. IDC estimates that Android commands 68.3% of global smartphone market share. This has been accomplished largely through both multimanufacturer competition and ownership of the “cheap” smartphone segment.
On the software side, Google’s use of cloud computing has not only gained traction, it is arguably a significant motivation for the release of Microsoft 360 — the cloud version of Microsoft’s productivity solutions. Google came late to both of these games, but is making progress because of the skill with which it executes. The takeaway is that despite a “sticky” customer, there is always room for growth and capturing competitors’ fans.
Compatibility magic
Apple has clearly figured out that customers tend to find an ecosystem that works and stick with it because doing so is just easier. When a user relies on two devices, the phenomenon is even more pronounced; in the context of a family or household, this factor grows again. It is, therefore, a secret weapon in a very real sense.
Where Microsoft can take this model and intensify it even further is within the business world. Businesses that are reliant of Microsoft for productivity solutions are not only the foundation of the enterprise side of the company’s revenues, but they are a solution to the stickiness equation. If a user is resistant to changing systems because he or she has one or two devices that would have to be updated at once, various businesses many have tens, hundreds, or thousands for which this could be true. If the Microsoft Surface Pro — due out on Feb. 9 — can hold its own, the cost savings to business of maintaining legacy systems may easily dwarf the savings to an individual of needing to update music files from iTunes. (And maybe Microsoft will offer a free utility that can make this painless?)
The message is that Microsoft is sitting on a bigger and better version of one of Apple’s keys to success. I believe that Ballmer has been cagey about an iOS Office release because he wants to see how the Surface Pro is received. If initial reactions are good, be prepared for a coming war. I like Microsoft’s chances — maybe not to win, but to grow even more important.
The article How Microsoft May Counter Apple’s Secret Weapon originally appeared on Fool.com and is written by Doug Ehrman.
Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft.
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