Google Preinstalled on Dell
First the Mac moves to Intel, then Dell moves to AMD (partially). What next? Next is Google preinstalled on Dell. This small step for Google and Dell will have profound consequences for Microsoft and the PC industry.
For over a decade, the most powerful force behind the dominance of the MS Windows operating system has been preinstallations of Windows on virtually every PC sold. Microsoft's ability to coerce PC vendors to preinstall Windows was so strong that even mightly IBM could not preinstall it's own OS/2 operating system on it's own PCs (in the few exceptions, OS/2 was offered as a less-than-default choice next to Windows).
That was then and this is now. What's changed? What's changed is the platform. Back then, the platform was the operating system. You either ran Windows or MacOS. That choice largely dictated your computing environment. Today, there is still diversity in operating systems (Windows, MacOS, and Linux, to name the most popular). But for most people the operating system is not the platform. It is merely what the platform runs on.
Today, the platform is the Web browser. People use their Web browser to see the content of the Internet and to read email. For 90% of computer users that's 90% of what they do on their computer. The operating system underneath the browser is now an insignificant detail. What matters is which browser people use to access the Internet and which portals (i.e. search engine) they access it through. The desktop operating system revenue has largely been ceded to Microsoft (although that is changing) but the new revenue comes from the search advertising.
The brilliance of Dell and Google's agreement is that Google is NOT fighting Windows preinstalls. Instead, Google software will be preinstalled on top of Windows! In the past, such actions would be countered with retaliatory licensing by Microsoft. In the Microsoft antitrust hearing, IBM executives testified that IBM was the last PC vendor to obtain a Windows 95 license because Microsoft was using that as a bargaining chip against IBMs marketing of Lotus Notes and SmartSuite. Past Windows licensing practices made it cheaper for the PC vendor to preinstall Windows on every computer sold, even if the customer wanted a different operating system. I have to believe that Dell will lose some Microsoft incentive with its most recent move.
The article linked above mentions that the preinstallation of Google software on Dell computers will bring revenue to both companies. My best guess is that Dell will get a cut of Google ad revenue coming from Dell's preinstallations of Google software. This just may be enough to offset the lost incentives from Microsoft. Dell may break even, financially, with this deal. At the same time, Google gains an important foothold at Microsoft's expense, preventing Microsoft from using Windows preinstallations against Google on a large portion of computers sold.
So that's all good and well for Google and Dell, while being a blow to Microsoft. What does this mean for the computer user who buys the Dell preinstalled with Google software? Stay tuned....
For over a decade, the most powerful force behind the dominance of the MS Windows operating system has been preinstallations of Windows on virtually every PC sold. Microsoft's ability to coerce PC vendors to preinstall Windows was so strong that even mightly IBM could not preinstall it's own OS/2 operating system on it's own PCs (in the few exceptions, OS/2 was offered as a less-than-default choice next to Windows).
That was then and this is now. What's changed? What's changed is the platform. Back then, the platform was the operating system. You either ran Windows or MacOS. That choice largely dictated your computing environment. Today, there is still diversity in operating systems (Windows, MacOS, and Linux, to name the most popular). But for most people the operating system is not the platform. It is merely what the platform runs on.
Today, the platform is the Web browser. People use their Web browser to see the content of the Internet and to read email. For 90% of computer users that's 90% of what they do on their computer. The operating system underneath the browser is now an insignificant detail. What matters is which browser people use to access the Internet and which portals (i.e. search engine) they access it through. The desktop operating system revenue has largely been ceded to Microsoft (although that is changing) but the new revenue comes from the search advertising.
The brilliance of Dell and Google's agreement is that Google is NOT fighting Windows preinstalls. Instead, Google software will be preinstalled on top of Windows! In the past, such actions would be countered with retaliatory licensing by Microsoft. In the Microsoft antitrust hearing, IBM executives testified that IBM was the last PC vendor to obtain a Windows 95 license because Microsoft was using that as a bargaining chip against IBMs marketing of Lotus Notes and SmartSuite. Past Windows licensing practices made it cheaper for the PC vendor to preinstall Windows on every computer sold, even if the customer wanted a different operating system. I have to believe that Dell will lose some Microsoft incentive with its most recent move.
The article linked above mentions that the preinstallation of Google software on Dell computers will bring revenue to both companies. My best guess is that Dell will get a cut of Google ad revenue coming from Dell's preinstallations of Google software. This just may be enough to offset the lost incentives from Microsoft. Dell may break even, financially, with this deal. At the same time, Google gains an important foothold at Microsoft's expense, preventing Microsoft from using Windows preinstallations against Google on a large portion of computers sold.
So that's all good and well for Google and Dell, while being a blow to Microsoft. What does this mean for the computer user who buys the Dell preinstalled with Google software? Stay tuned....
posted by Bernie at 10:12 PM
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