Microsoft v Google 2

Does Google have an advantage that we don’t pay them directly for anything? All their services appear ‘free’

Even with the recent price cuts on Vista we still give our money to Microsoft directly. (views on the cuts? proves its rubbish? normal marketing? (its normal to discount old stock approaching its best before date, or to make way for a new product), brave? desperate? irrelevant?)

With Google we pay inflated prices for a whole bunch of random stuff so companies can cover their ad-words spend. Some IT vendors are spending 30% of their revenue on adwords, if we found and bought their products without that advertising we could pay that much less, and they would still make the same profit.

There is also the new v old thing, and I think Google PR is a bit more in-tune with todays world. Of course they also have the advantage of not yet being done for monopolist behaviour.

In many ways I prefer the visibility of giving a known amount of money in return for a known product or level of service. That whole, ‘its free’ (because we’ll sell an undefined amount of data about your preferences to an undefined (possibly unlimited) group of people) is a bit too open ended for me. What do you think?

As a matter of interest XLAnalyst was(/is) ‘researchware’ – free to use in return for submitting some anonymous metrics. Of the thousands of people that have downloaded it, only a handful (10-20 max) ever submitted the data back. Seems people like free, but don’t like to share a sliver of info in payment, and won’t if its optional.

cheers

Simon

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5 Responses to “Microsoft v Google 2”

  1. Stephane Rodriguez Says:

    “Some IT vendors are spending 30% of their revenue on adwords”

    Where do you got that figure?
    I used adwords for a while, and the figure was more around 3%. I stopped using adwords once I figured out that this needed continuous babysitting (in addition of those 3% commissions).

    I don’t think you pay much if you have found a niche.

    And by the way, if you have found a niche, clever Google SEO would bring substantial targeted traffic by direct Google results than adwords advertising. And of course, if you don’t use adwords, no need for adwords babysitting anymore.

    This is not the norm, but this is at least what I see.

    “As a matter of interest XLAnalyst was(/is) ‘researchware’ – free to use in return for submitting some anonymous metrics. Seems people like free, but don’t like to share a sliver of info in payment, and won’t if its optional.”

    Anything related or desktop or internet is expected to be free for the consumer market. It’s the norm.
    Microsoft giving products away for free does not help. (last one is Visual Studio 2005 pro, and I expect Office 2007 to be given away for free if OOXML fails at ISO)

    As for XLAnalyst (which I haven’t tried), what about an online version? Feedback problem solved!

  2. Simon Says:

    30% – off the BOS forum on JOS. its through choice, as it was still producing more revenue than it cost. The poster was looking for further click opportunities.
    Babysitting – absolutely, pretty much a full time job from what I hear.
    SEO yep google Excel Development and you’ll get Codematic in the top 10.
    consumer = free, agreed, but a few on BOS seem to be making a living with consumer products (although they seem to spend all their time managing adwords and not coding).

  3. Stephane Rodriguez Says:

    “a few on BOS seem to be making a living with consumer products”

    Be warned though, the cost of support is almost certainly going to put you out of business. If you have an exceptional consumer product where the cost is support is marginal, I would say that is an exception. On JOS, there are a few vocal people that are exceptions, and in most cases they don’t back the claims with verifiable information.

  4. Stephane Rodriguez Says:

    Btw, from what I read on JOS, most of the time, those posting about substantial revenue are not in the consumer market.

    I make a living on enterprise software.

  5. Harlan Grove Says:

    FTHOI, the consumer-side software packages I’ve paid for in the last 10 years, other than upgrades for software I’d bought before that, are PkZip, TextPad, Beyond Compare, Office 2000, Lotus SmartSuite 9.7, Partition Magic, and a contribution to the GNU Octave project. There’s also several Linux packages starting with a boxed Red Hat 6, but that’s irrelevant to Windows users, the main consumer market. I’m also not including the games software I’ve bought for my children.

    I may not be representative, but I suspect there’s still a portion of the consumer PC market that’s willing to pay for software IF it’s reasonably priced. And what’s now available as FOSS only puts downward pressure on what reasonably priced means.

    That being the case, software licensing as a revenue generator doesn’t face a rosy future. [My more pedantic self would say that consumers have woken up to classical microeconomics – price should equal marginal cost, and that’s uncomfortably close to zero for software.] Microsoft already charges for post-installation telephone support (IMO it’s overpriced), but it won’t come close to replacing licensing revenues.

    Google’s business model seems to me to be a more viable business model for the consumer software industry. Maybe there could be others, but if I could think of one, . . .

    The dinosaurs didn’t die off within days of the big meteor striking earth. It took a while. The Internet is the new meteor, and dinosaurs like Microsoft, which make the bulk of their money through software licensing, will be around for a while. But their long-term predominance is unlikely.

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