The problem with Microsoft and Google revenue

The two giants are dominating their historical markets. Microsoft Windows and Office dominate the operating system and desktop applications market, while Google dominates the searches market.

1)Let’s have a look to their revenue
Microsoft's revenue split between client software (Windows), server software (SQL, .Net), business apps (Office for 90% of the amount), online (Live) and entertainment (Xbox).
But 2/3 of Microsoft’s revenue comes from Windows and Office.

As for Google’s revenue, it is very simple: nearly all of Google's revenue comes from advertisements that appear on search result pages and on partner sites

2) What is the problem?
Core revenue of both companies could be reduced by successful community initiatives:
- open source operating system (Linux),
- open source (Open Office) or rich web based desktop application (Ajaxwrite),
- search engines based on Wikis (Wikiasari)

Each point of market share taken by community initiatives, will weaken the two giants and reduce their revenue.

3) What does this tell us?
The traditional barriers to entry in the software industry has dramatically changed. With the expansion of communities … it is possible for focused networks to challenge some established companies. Here is the paradox.

Although it is difficult for a private help company to challenge Microsoft or Google (to challenge them would cost millions of dollars), it is possible for communities, where passionate people work for FREE (or for glory), to challenge established companies on some markets. Microsoft spent billions and paid 10 000 people to develop Microsoft Vista. A well managed community (Linux) is doing (almost) the same. For free.

Take it as granted: communities can challenge established companies, it is just a question of time. Especially if communities develop better MS like or Google like apps.

Nevertheless, they will only challenge those companies on some segments.

And here lies the interesting part. Communities cannot challenge established companies on:
- hardware (Xbox),
- business solutions (MS Dynamics ERP),
- localization service (Microsoft Local or Google earth),
- hosting terra data (Gdrive)
- …

So I’m betting that the two giants will always re-organize themselves and shift their business if needed.

Open Office the open source desktop application
Linux the open source operating system
Wikia the open search project
Ajaxwrite the ajax desktop application

A bigger gap generation?

With all the goodies being showed during CES, we can clearly see trends for our very close future:

- you have to BELONG to a community
- you have to PARTICIPATE to the community
- it's cool to be an ARTIST now (and to make money!)
- younger generations will really BENEFIT from this new digital power

The trends will really modify communication and marketing targeting younger generations.

On the other hand, having a world ruled by 10-15 year old artists scares me a little bit. I do not really want yu-gi-oh! fans rule creation.

But just have a look on Google top VIP research for 2006 in France and be scared, there are only actors or singers: 50 Cent (singer), Wentworth Miller (actor), Zinédine Zidane (soccer), Cristiano Ronaldo (soccer) ,Ronaldinho (soccer), Diam's (singer), Eva Longoria (actress), Kamini (singer), Rihanna (singer), ParisHilton (Paris Hilton)

About Sony Mylo

Sony’s new device for kids (and grown-ups) is astonishing. Here a link on their Website: Sony Mylo

This WIFI device enables to talk, IM, surf, access personal spaces, share photos, video, music…

The main strength is the use of open hot-spot, meaning that you can talk, access multimedia content and share content freely (provided that you use the Google or Yahoo software included).

Comment 1: mobile voice is going to be free very very soon
Comment 2: the mylo likes (because every handset maker is developing its one) will enable marketers to develop community marketing
Comment 3: by the way, marketers are going to your younger and younger J

A good view of what our kids are going to ask for Xmas soon, if they can wait until next Xmas!!!!