Why Google Drive Has Become Microsoft’s Worst Nightmare

As a writer, there's one piece of software that I simply can't live without -- Google (NASDAQ: GOOGL  ) Docs.

The first time I used Google Docs six years ago, Microsoft's (NASDAQ: MSFT  ) Office software immediately appeared outdated by comparison. Google's cloud-based documents suddenly made emailing documents to myself or carrying around a USB flash drive embarrassing habits from a bygone era.

Screenshot from my Google Drive.

More importantly, Office users like myself would never have to lose hours of hard work due to software or hardware crashes again. And best of all, Google's revolutionary piece of software, which now forms the core of its cloud-based suite Google Drive, has always been free -- which has always made it a more attractive choice compared to Microsoft's Office suite.

Google rolls out new cloud-based features

Last week, Google updated its Drive app to support multiple account sign-ins and enhanced its integration into the rest of Google's cloud-based ecosystem -- which includes GMail, Google Plus, YouTube, Google Maps, and Chrome. These two updates now allow users with multiple accounts -- for example, work and personal ones -- to seamlessly switch between the two.

Google also added new functions for users to print their files via Google Cloud Print and AirPrint, and improved its support for Apple (NASDAQ: AAPL  ) iOS 7 devices. Google also added some new "quick action buttons" on Gmail, allowing users to do some common tasks -- such as confirming subscriptions or replying to event invitations -- directly without opening the body of the email. In addition, attachments are now directly sent to Drive, eliminating the need to download them.

These enhancements boost the effectiveness of Google's ecosystem, making it a software suite that individuals and businesses are becoming increasingly dependent on.

Therefore, let's take a moment to reflect on how Google has entrenched itself as an indispensable part of our daily lives.

It all goes back to Microsoft

Back in 1995, Microsoft CEO Bill Gates rightly believed that the Internet would become an inseparable part of personal computing, and merged the company's web browser, Internet Explorer, with its operating system, Windows 95.

However, Microsoft's intentions didn't become clear until the release of Internet Explorer 4 in 1997, when it introduced the "Active Desktop," which combined the web browser with desktop folders -- effectively making it an extension of the operating system.

Windows 95's Active Desktop. Source: Microsoft.

This was considered an anti-competitive move by other web browser companies, such as Netscape. Therefore, the Department of Justice shattered Microsoft's dreams of creating the ultimate browser-based operating system in 1999, when it ruled that Microsoft had violated antitrust laws on various hardware and software fronts. As a result, Microsoft had to separate Internet Explorer from Windows and make concessions to rivals such as Apple, Lotus, Java, and Netscape, among others.

Google flips Microsoft's business model upside down

That story should sound awfully familiar to users of Google's cloud-based ecosystem. Just like Microsoft, Google had a mission to create an operating system that was inseparable from the Internet. However, Google didn't get in trouble with the DOJ or its industry peers -- mainly because it distributed everything for free.

The main difference between the two companies is that while Google built its ecosystem around its core search engine, Microsoft attempted to add features to its operating system, which was already dominating PC sales at the time.

Here's a timeline on how Google expanded from a simple search engine into the cloud-based ecosystem on which many of us are dependent on today.

Year

Notable event(s)

1998

Google's search engine goes online.

2004

Google controls 85% of all online search queries.

2005

Google Maps is launched.

2006

Google acquires YouTube, launches Calendar and Translate.

2007

Gmail becomes available to the public. Google Docs is released.

2008

Google Chrome is released. Android 1.0 is released for mobile devices.

2009

Chromium OS, the predecessor to Chrome OS, is released.

2010

Google launches its first social network, Google+.

2011

The first Chromebooks (laptops with Chrome OS installed) arrive.

2012

Google Drive replaces Google Docs, adding cloud-based file storage and synchronization features, along with search engine integration of shared files.

Source: Google.

To put it simply, Google's strategy was the exact opposite of Microsoft's.

Google purchased or created services that it knew the public would depend on, then tied them all together into a single ecosystem that could be accessed with a single login -- the Gmail account. It offered all of these services for free, knowing that they would all eventually funnel back into its main source of revenue -- its search engine.

Today, Google has two operating systems -- Chrome OS for personal computers and Android for mobile devices -- which seamlessly tie a user's Google services together across multiple devices, all for free.

Microsoft, on the other hand, initially charged customers to install Windows, charged them again for installing Office, and then allowed third-party companies to charge them again to install additional software in its operating system. In addition, it offered Windows and Office in tiered pricing versions, each with additional "premium" features.

Unfortunately for Microsoft, that business model only worked when there wasn't a viable alternative. Microsoft didn't have to worry too much in the 1990s, when its main competitors -- Apple and Linux -- only occupied small niche markets.

However, Google's popularity as a search engine gave it credibility, and over the past five years, Chrome and Android have become viable alternatives to Microsoft operating systems -- especially on lower-powered laptops, hybrid devices, and tablets.

Is Google really a major threat to Microsoft?

Even though Chrome OS hasn't risen to topple Windows yet, take a look at this chart.

OS market share as of October 2013. Source: Netmarketshare.com

Judging from the 81% of computer users who still use Windows XP, Windows Vista, and Windows 7, it's safe to say that customers aren't keen on paying for new operating systems -- which means more customers might install Chrome OS or another Linux distribution instead of Windows 8.

In terms of productivity software, Microsoft still has an overwhelming lead with over 90% of the market -- but that figure doesn't account for cloud-based alternatives like Google Docs. In fact, a survey from Gartner earlier this year showed that Google's market share in cloud-based productivity suites rose from 10% in 2007 to 50% in 2012.

That stunning figure doesn't bode well for Microsoft, which entered the cloud-based productivity software game extremely late in 2011 with Office 365, which still costs $20 per month.

In closing, the writing's on the wall, folks -- Microsoft still doesn't get the three main reasons we love Google's ecosystem -- it's seamless, it works, and it's free.

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Read/Post Comments (13) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 12, 2013, at 2:44 PM, Casso71 wrote:

    Nothing like an unbiased opinion....and this is nothing like it. Very poor lob-sided argument.

  • Report this Comment On November 12, 2013, at 2:49 PM, copyninja wrote:

    have you used skydrive lately? Microsoft provides free basic Office tools thats better than Google Drive. You don't even have to pay for them just like Google Drive.

  • Report this Comment On November 12, 2013, at 2:57 PM, GameBot wrote:

    TMF, need to rein in this type of story.

    The headline alone is shameful, and the story is just silly.

    Office web apps is free, allows you to move freely through the Microsoft world.

    Office 365, is dirt cheap and has 5 Desks and 5 mobile and is free to many millions...

    Office simply rules, bloggers and email monkeys are the only ones who think google apps replaces it.

  • Report this Comment On November 12, 2013, at 3:23 PM, aaa28 wrote:

    I don't know....I mean..as nice as google docs is, I find it to be absolutely no way a replacement for microsoft office. Try opening an excel document with like 10000 rows in microsoft excel and in google docs. MS works perfectly fine and google's starts freezing the browser.

  • Report this Comment On November 12, 2013, at 4:14 PM, CharlesClarke3rd wrote:

    An 8 year old with a hard drive. LOL. Google is dumb, and if you use Google, you are dumb.

  • Report this Comment On November 12, 2013, at 4:35 PM, Mcbeese wrote:

    Google Drive is terrible. I deleted all my files, manually emptied the trash, and it still told me that I had no capacity left. I messed with this for about 45 minutes and then assigned it a big FAIL and moved on to Microsoft SkyDrive. Very intuitive and I have never experienced the slightest glitch. The apps don't matter to me in either case. I use iWork (primarily) and OpenOffice when I need to.

  • Report this Comment On November 12, 2013, at 5:42 PM, aza400 wrote:

    From all the posts I am either dumb or from another planet. I have no problem with everything Google. No glitches no problems ect?? And why is the stock over 1000 if the applications are so poor?

  • Report this Comment On November 12, 2013, at 6:38 PM, ChrisS3 wrote:

    Something important to point out is that Apple only commands a paltry 3% of the desktop market. I know it's hard for tech cripples to understand, but it's reality.

    Microsoft's problem is deep. Google is able to give away services because it's empire isn't built on sand, it's built on advertising. Microsoft recognized this several years ago and reconfigured MSN as Bing. Typical of anything non-Windows for Microsoft, Bing is failing miserably. In fact, word is that the next CEO will put it under. Like Youtube? Advertising based. Google search? Ad based. Drive, Docs? All ad based.

    And anyone believing that Office Web apps aka Skydrive is a competent and robust word processor has clearly never used it. I have used it and it's great for making small edits to your office based .docx documents. The downside? It's not robust. Try creating a macro in excel or using submenu functions in word. It doesn't work!

  • Report this Comment On November 12, 2013, at 9:13 PM, jbeyer wrote:

    Google + is Google's fourth social network after Orkut, Google Wave, and Google Buzz. Geez, do some research. Google drive is handy for simple stuff or using Fusion Tables for mapping data, but MS Skydrive with Office web apps is good too. Google scrapes your data to target ads to you. Google also drops support for things it doesn't feel like supporting for free.

  • Report this Comment On November 12, 2013, at 11:52 PM, pmarshal wrote:

    I've been waiting since Google Docs came out for a version that I find acceptable, and I'm still waiting. I am a loyal Android user with multiple phones and tablets (all with Google Docs pre-installed). My user experience has been underwhelming to say the least. The last 3 Windows laptops I have bought also came with GD and I found the desktop software to be extremely slow and unable to display many of my existing Excel spreadsheets. OK, so this is a compatibility issue, but since MS Office is the de facto standard, this is something of a big deal unless I care to discard years of previous work. No, I will continue to wait for a version of GD that I can actually use, regardless if it is free or not.

  • Report this Comment On November 13, 2013, at 12:06 AM, TMFSunLion wrote:

    Thanks for reading everyone.

    By the way, I'm well aware of Skydrive's web apps, and occasionally use them as well, but there's a simple reason that they don't measure up to Google Docs in my book -- connectivity and sharing.

    Using Google Docs comes naturally to users dependent on the Google ecosystem, like myself.

    Read this guy's article for a deeper comparison:

    http://www.makeuseof.com/tag/skydrive-vs-google-drive-which-...

  • Report this Comment On November 13, 2013, at 8:01 AM, Timmmmaaahh wrote:

    I think it's a matter of context. At home productivity applications are Google based for me, simply because I can sync everything with my phone/tablet flawlessly, it works as you'd expect it to work and it's free.

    At work it's a different story. I work for a multinational so it may come as no surprise that they have a big fat contract with M$, I'm bound to Microsoft's Office suite. But maybe that's not a bad thing because I work with advanced Macros (loaded with VBA) which I doubt would be at all compatible with Google's user-friendliness. Well, the fact that the 'drive.google.com' domain is blocked across our entire company may also have some influence why I'm not using Docs at work :)

    Another Microsoft aspect that bothers me is Outlook. Even though it's got some pretty awesome features, it doesn't match Google's email and calendar by far. Try setting up your company mail on multiple devices, it's always such a hassle. I had to install QOWA ($3,99!) to get it working on my android and when a PC crash occurs, all mails are gone if you didn't make a backup. Gmail is such a breeze, just enter your login details on any device and you're good to go. I love that 'don't worry, be happy' approach.

    I'm with the author, Google is slowly squeezing the life out of Microsoft and there is nothing Bill can do to stop it (unless they make all their software free?).

  • Report this Comment On November 14, 2013, at 12:57 AM, arvindkc wrote:

    This article would have made sense if the author used data showing adoption trends of google drive vs. MS office. Instead the author starts with a personal preference of using google drive and then extrapolates to that being MSFT's worst nightmare. I am a fan of google drive but not of poor writing and inferences.

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