Saturday, October 1, 2011

Google vs. Apple

Two giants are emerging with rapid growth. Google and Apple are defining the structure of consumer computing. Google (revenue $33 billion, market capitalization of $166 billion) and Apple (revenue $100 billion, market capitalization of $353 billion) differ from firms engaged primarily in enterprise computing such as IBM (revenue $104 billion, market capitalization of $209 billion) and Oracle (revenue $36 billion, market capitalization of $145 billion). Microsoft (revenue $70 billion, market capitalization $208 billions) straddles between enterprise and consumer sectors.

The distinctions between consumer computing and enterprise computing are vanishing as office personnel are becoming increasingly mobile. Over half of office work does not take place any more by employees sitting at their desks. Business is now done by employees moving and changing locations. This is why people that move must rely on devices that are available wherever a person is located. Personal computing now means the access to the Internet and to application from any anywhere. Apple with iOS and integrated portable devices are confronting Google devices that are managed by the Android software that support a variety of vendors.

In the next few years it will be Google or Apple that will shape how organizations start thinking about ways how to manage their computing. IBM, Oracle and Microsoft will continue operating in their respective market segments. These firms have not emerged as pacemakers of IT architectures. HP, the one time leader, is now sitting on the sidelines.

Google and Apple are fundamentally different. For Google, the Web is the center of the universe though this firm does not own the Web. It only manages access to it primarily for marketing purposes. Its ownership of applications is marginal. They do not own wireless phones or appliances. Google can be categorized as an un-integrated firm with the exception of operating a well-organized network of special purpose data centers. Other than the hardware and software of its data centers, Google outsources everything.1

For Apple your device is the center of everything. It owns a formidable collection of phones and appliances and owns or controls its logistics pipeline as well as its applications. Apple controls its integration from microprocessors all the way to dedicated cloud data centers.
Google makes money by making access to the Web easy using open source browsers plus its own proprietary Chrome and then derives profits from advertising revenues. Apple sells proprietary hardware with proprietary applications and its own proprietary browser (Safari) and gets profits from selling premium priced devices plus selling Apple-approved applications.

Google’s entire strategy is based on the future, and not the Internet as it is today. Google is betting that the world will have low-cost, ubiquitous Internet soon, including fiber connections in offices and homes and super-fast mobile wireless broadband in every nook and cranny of the planet. Google’s apps are connection-dependent in the Internet. All of the data is stored on Google’s servers in the cloud or on servers on the edge. Google controls only the browser and a limited set of applications.

Apple’s approach is not to use the cloud as the computer-in-the-sky that runs everything. Apple doesn’t want or need everything to happen in the cloud. Instead, it views the cloud as the conductor that makes sure all of applications are synchronized. Apple controls the security at every point of the network as well as its network. The Apple Cloud is the hub that is controlled and synchronized only by Apple. Users manage their data and prefer to store personal data on Apple devices that are easily upgraded.

Summary


DoD implication: A GIG that is based on access via secure servers on the edge will be the lowest cost and most flexible solution, but more risky. However, Google cannot be adapted to the GIG with its limited applications and a high diversity in smart phones.

Apple’s view is more relevant because it is far more integrated. It offers a more secure set of technologies. Unfortunately, neither Google nor Apple is as yet structured to support enterprise level systems. This leaves it to the established enterprise providers – Microsoft and IBM to compete for DoD’s enterprise clouds until such time when either Google or Apple will offer products that extend from personal to enterprise uses.

From the standpoint of the individual, Apple offers by far the lowest cost of ownership on account of its overall ease of use. Apple provides an overall integration of every component that is required to run the user end of IT operations.

All other vendors manage only a part of the total set it takes to run IT. Whether the monolithic and proprietary approach pursued by Apple may prevail is not clear, though rising security requirements seem to favor such an approach. In the next ten years the dollars and the preferences of satisfying the personal computing needs will most likely give to Apple the revenue and the profit edge.

  1  http://www.zdnet.com/blog/btl/philosophical-differences-the-google-cloud-vs-the-apple-cloud/50245


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