We're back to John Hagel's unbundling of corporations into infrastructure providers, customer relations and product innovation. Google still doesn't quite know what it wants to be. Its success is based on big infrastructure, but its culture is one of product innovation.
An open internal market encourages that ... but there are some people who want to work in infrastructure or customer services, they might be happier going back to Microsoft. OTOH, as they go to M$ they'll help make it less innovative.
Google could find itself wrenched between two imperatives ... if it goes infrastructure, it will see the innovators slowly evaporate. If it holds on to the innovators it will see service reliability decrease ... allowing attack from elsewhere.
One solution might be to partition itself into different kinds of companies with different cultures. Another is to split entirely. Google outsourcing infrastructure to Microsoft would be ... well, a turnaround. (Not that I'm predicting it.)
Maybe that was an exaggeration, but there's a grain of truth. 2008 is the year M$ is obviously in one long, wrenching car-crash.
They are innovating nothing, *leading* in nothing ... Apple owns the major device-swarm platforms (iPod, iPhone). Sure M$ have their own ... but these are simply "me too" efforts ... always following the trends that Apple sets. They might as well be Toshiba or HTC for all the memetic advance they're making.
Apple own the local user experience; and now Apple are hoovering up developers, and with the launch of Adobe's Flex, the Mac may become the standard environment for the cross-platform desktop application developer. (Don't forget you get Ruby on Rails bundled too.) And all the Unix goodness. The Mac is increasingly a luxury brand for important people and those who think they need to keep up with them.
Google have made massive incursions into everything this year, from Application Engine to OpenSocial to their FriendConnect to Android to GData to iGoogle to the revamped Orkut ... they have all bases covered.
Suddenly (and really, it's come up quite fast and unexpectedly), it really is too late.
They're no longer a playa who seem to be slipping up a bit. They're *gone*. A has-been. We expect nothing from them. No innovation. Smart people don't want to go work there to help them. Gaping Void's sly, edgy icon is empty. M$ can't change the world any more ... it's already changing too quickly under the seismic influence of Google and Apple and Nintendo. All they can do is try to tag along or watch helplessly from the side-lines ... until it is time to go home.
Or maybe the last desperate attempt at a stand by the Windows / Desktop faction inside M$ ... "we will get it right, next time, honest"?
But they won't. And it doesn't matter. The world has moved on and desktop operating systems are nothing but a strategic red-herring.
The only question, how can M$ elegantly get out of the desktop game? They can't simply abandon it. Open sourcing it is the right thing, long term, but probably too great a cognitive dissonance for now.
So how to keep conveying commitment to windows. How to "do the right thing" support-wise for users. And yet, start to withdraw, gracefully?