Battles for standard dominance in the desktop

Microsoft Word is one of the most popular software for word processing. Launched in 1989 as a Windows application it holds today about 95% of the market share and Microsoft estimate that there are 500.000.000 copies in use. Early competitors lost their position during Windows ascension. The operating system open the way for Microsoft Office applications which gain competitive advantage over any other player and defined a dominant standard.

Microsoft word market-share battle between 1986 - 1997

1. Despite Microsoft behavior the leading position create a monopoly with positive consumption externalities for word processor market due to the large number of users that are now familiar with the dominant design. Initially based on the graphic concept of what-you-see-is-what-you-get, the user interface for word processor achieved a high level of maturity and the basic layout adopted widely.

OpenOffice Writer layout

2. Although the market is changing: New Office office suite, stand-alone application, open sources solutions and web base apps are others alternatives to Microsoft word processor. Users have a wide range of solutions and they can choose which suits best to their needs. Compare them here.

3. Still the battle for dominance enter in a new field: File format. After the International Organization for Standardization approved the Open Document Format (that was designed to permit files compatibility between different applications), Microsoft introduce its own file format (docx). Although this is also an XML based format which means that is open and licensed free. OpenOffice and some web based application such as Google docs adopted the Odf file format. 

4. Microsoft Word is very competitive with a strong position in the market. Although market forces are changing and new trends are emerging. For example:

• Consumers are becoming more independent from installed application since they are doing everything online: creating, sharing and storing their files online;
• Online application are reliable, available and easily convertible to any format (pdf, xml, doc, etc);
• And definitely with word processor one size does not fit all. From the school student to the most diverse professional, business and government institutions there are a lot of needs to be fulfilled. 

After all the monopoly cost seems the consumers are going to be the winners once "dust settle".

Articles source:
http://www.utdallas.edu/~liebowit/book/wordprocessor/word.html
http://www.businessweek.com/magazine/content/06_27/b3991412.htm
http://lowendmac.com/musings/08mm/rise-of-microsoft-monopoly.html

Google Core Business and Internet Innovation

google first webpage - 1998

Before 1999, the Internet was dominated by companies such as AOL and Yahoo who develop their business models as a one-point-stop where registered users could have access to a whole set of things including, e-mail, services, news and other features. Advertising and search was also part of the scheme.

Afterwards, Google emerged with a revolutionary web business concept based on search. The innovative idea that query search results must quickly deliver the most relevant answer to the user efficiently (measured in how fast they send people on their way), changed everything and opened a new path for innovation. Since then, and based on search, Google introduced a whole set of innovative web services and expand the technological platform widely.

"Google runs over one million servers in data centers around the world,^[13] and processes over one billion search requests^[14] and twenty petabytes of user-generated data every day.^[15][16][17] Google's rapid growth since its incorporation has triggered a chain of products, acquisitions and partnerships beyond the company's core search engine." source: wikipedia

Google grew so fast that they became Internet leaders in a few years. Their technology impacts everything,  everywhere, and for many businesses Google and all the web innovation that followed became disruptive to the traditional business model: news companies, publishers, copyright society, content providers, advertisers, regulatory agency and even governments (china) started complaining about Google. Fundamentally, because of the nature of the technology developed, they were dealing with multiple issues and negotiating with many counterparts.

However, Google developed a very strong competitive position with 85% of the search market share, reported by Netmarketshare in August 2010.

In the meantime a new web player quickly arose with a new core business concept: Social Networking. Born in 2004, Facebook crossed 500 million users this year and is competing with Google for leadership as the most popular website.

Apparently these two web giant companies have different core business strategies but it seems that the Social Networking concept is so strong that it is impacting Google's Strategy. Google's attempts to build a social network failed with Orkut, Friend Connect, Google Wave and Buzz.

But recently, Mr. Schmidt (CEO) told reporters that "Google Inc plans to gradually introduce social-networking features starting this fall. Expect to see social tools from Google, but do not expect a brand new social network. Instead, Google will add social components to its core products."

With the debut in the search engine market, Google grew and entered in many business sectors such as communication, advertising, mobile, and now they intend to compete in the social networking arena. Despite the need to keep innovating, I wonder if this strategy is correct.

link Sources:
http://en.wikipedia.org/wiki/Google
http://mostpopularwebsites.net/
http://www.reuters.com/article/idUSTRE68D5FK20100914
http://www.internetworldstats.com/emarketing.htm
New York Times Article

Boston lead the world as the 1st innovation city

 Boston - Massachusetts

In the global competitive economy cities plays a central role, fostering innovation when they are able to cultivate a fertile environment for creativity, business startups and high levels of city infrastructure.
A recent study from 2thinknow ranked Boston as the Top City of global innovation leading a list of 289 cities around the world. The score measured 3 factors (out of 10) in a range of 162 innovation indicators:

• Cultural Assets - 9
• Human infrastructure - 10
• Networked markets - 10

Leading with 29 points out of 30, the City of Boston is a central hub where individuals, firms, nonprofit organization and even governments can have benefits from the collaborative network that already exists or that can be built in the region such as technology clusters and spillovers of knowledge.

However Melissa Schilling* points out that geographical clustering could have some downsizing effects for installed companies because their proximity and competition can reduce pricing power with buyers and suppliers, competitors can gain access to proprietary knowledge and the huge concentration can lead to other externalities such as high cost, pollution, traffic, etc.

Yet, this is a great reward!

Sources:
*Author of Strategic Management of Technological Innovation, third edition. 2001
2thinknow
smartplanet article
Photowallpaper