Google's Love For Small Businesses

bariswheel writes "The Fearless Frog is at it again: In his latest post, Cringely aims to slap some sense into Microsoft, Apple, and IBM altogether. From the article: 'What counts is that for Microsoft the platform is the PC while for Google the platform is the Internet and nobody can hope to control the Internet -- not Microsoft OR Google. Google is making a ton of money from people [small/medium sized businesses] who never were even in business before. This is not only a fundamental change in how advertising is done; it is a fundamental change in how BUSINESS is done.'"

old ways...

...If Microsoft's business theory is antiquated, then Apple's- - which is for the most part derived from Microsoft's -- ought to be antiquated, too.

So what's antiquated about making a product and selling it? Sure it's been done for a 1000s of years but that doesn't mean it's outdated... people will be doing exactly the same in the next 1000 years

Re:Well, both use one product to support another

You do not have the whole market to be a monopoly, standard oil for example had 64% marketshare when it was broken up for something monopoly related. ( http://en.wikipedia.org/wiki/Monopoly#Monopolistic _competition [wikipedia.org] )

And there are things stopping others from selling products in markets which ms has a monopoly in, ms abusing it's monopoly, which they have been convicted of.

Re:Google is approaching a monopoly.

Way to ignore context, nothing was said implying that there shouldn't be companies getting squashed, only that google should not have the ability to arbitrairily squash whatever company it wants to, nobody's saying "this company went broke, google must have caused that", but "if google can do such and such then in could make bystanders(not competitors) go broke".

What do you mean by "make money" anyway? "Acquire money, in return for work"? I got news for you, not all people are like that. Some don't want to accquire money. And some don't want to do anything in return for getting money, and that can just as well apply to corporations. **cough**sco**cough**

If we didn't have pro free market legislation, google would not have gotten where it is today, microsoft or some company allied with it would have taken the market or at least a significant chunk of it by any dirty trick it could use.

Re:Well, both use one product to support another

I see many distros of linux being sold in many computer stores (and pre-installed on machines). Just because Microsoft is the most popular at this time, doesn't make them a monopoly. Nothing is stopping you from creating an OS and selling it.

I believe that both the US Government and the EU would disagree with you about Microsoft not being a monopoly.

Re:old ways...

Look around. Making a product is SO 1950. Sure, it's a necessary evil, but that's why we get all those countries in the far east to do it for us. Now SELLING a product, THAT's where the action is!

I personally think we'd all be better off if everybody would do a little less selling and a little more making. Okay, a lot less and a lot more.

Re:old ways...

That's why I said so 1950.

I'm fine with services too -- some people need them. I don't, usually. You can even think of them as a product. The problem is, instead of trying to build the best widget or offer the best service, almost everybody seems to be intent on making something that's just good enough and then differentiate themselves through marketing.

So I end up paying not only for a mediocre product but for the marketing as well. Marketing has a negative value to me (it uses my time and annoys me) so it actually detracts from the product, yet in many cases I have no alternatives to paying positive cash for it.

Marketing vs. Advertising

You are making a very mistaked assumption. What you are calling "marketing" is actually "advertising". And advertising is only a tiny fraction of marketing.

Without marketing, you would have no product (or service). At all.

And yes, the kind of advertisement we have these days also annoys me. And yes, I too think they spend too much money on it.

Re:old ways...

Almost everybody who actually has a product to sell (that includes service) makes it in a far off land.

Better watch out... one of these days those far off lands are going to realize that they hold all the cards.

Re:old ways...

Now SELLING a product, THAT's where the action is!

Advanced as you think you are I can see you're still stuck in the old ways of the 20th century. The action is in SELLING, not seling a product. Products costs millions to develop and cheap as it is to manufacture them overseas it still costs money. No, SELLING WITHOUT A PRODUCT is where the in crowd knows the action is.

Re:old ways...

You have indeed surpassed me. I request to study under your tutelage. I aspire to the ultimate zen, profit with no product nor service nor any other material trapping.

Re:old ways...

Actually, the new thing is to "productize" something that was always free previously.

In the old days, they sold you a door bell. If the door bell were invented now, they would sell it cheap or give it away free, and then charge you 25 cents per jingle for your "Visitor Alert Service." (Or if you're a high-volume guest-receiver, you can opt for our "Unlimited Rings Plan" for just $14.99 per month flat fee!)

Re:old ways...

Legally, there's some truth to that. Since you can't buy software, only a license to use it---a revocable, often non-transferrable license---it seems quite accurate to describe it as a service rather than as a product. Not that it -should- be a service mind you, but that's the way it behaves these days.

Since buying a piece of $350 software from a company that screwed me pretty hard (refusing to let me move it to a new machine without buying and using a *^%^%* dongle---a rule that was -not- in any contract I agreed to when I bought the product---and in theory, not allowing me to sell the product to anyone else), I now read licensing agreements and will never as long as I live buy any software from that particular company again. They know who they are (as do the folks on every audio recording message board on which I regularly post).

That said, the very fact that I feel like I have to read multi-page agreements from top to bottom to keep from getting utterly screwed over by greedy companies is a pretty sure sign that government intervention in the software industry is desperately needed. As long as software licenses can violate the right of first sale and other basic consumer rights, commercial software is not a product, it's a service at best, a screw job at worst, and a wonderful reason to support FLOSS on the whole.

Not that all software companies behave like children, mind you, and one would hope that eventually the free market would destroy the ones that do... but that doesn't help the innocent people who get screwed in the process. :-)

Re:old ways...

So what's antiquated about making a product and selling it?

Did you even read the article? Neither Microsoft nor Apple are merely in the business of making products and selling them. They make platforms that they dominate. Every other MP3 player company was just making products; Apple is up to something different.

Obsession with small business

For the life of me, I still do not get America's obsession with small business. Sure, smaller businesses are less powerful, but they're also problematic from an economic standpoint; most small business either don't hire very many employees, or do not pay for their health insurance, or even both.

I understand they're "living the american dream" and all that, but how much is that worth us as a society? It seems to me that people have just automatically assumed that larger businesses are bad (by associating them with some bad actors among the super-big actors) and that smaller business are somehow intrinsically "good," regardless of the costs to society a large number of small business vs. a smaller number of larger business incur.

Re:Obsession with small business

Walk into a small business and you find employees that actually know things; employees that usually are more integrated with the local community; employees that are happier.

Walk into any big corporation and you find a bunch of uptight, miserable people who hate their jobs; don't care whether the customer is happy, and generally feel powerless to effect positive change on any grand scale within their operation.

There are obviously exceptions. Companies like Whole Foods treat their employees right, but these corporations are very atypical. Walk into a Wal-Mart and see if any employee there really gives a crap whether you find what you're looking for.

The bigger they are, the harder they fall. It's also a fallacy that smaller companies don't employee more people. There are millions and millions of Americans working for small companies or self-employed. They are an intregal part of the workforce in the country.

Re:Obsession with small business

Walk into Microsoft and see employees who just dont care anymore and have no motivation or inspiration. Walk into Google and see employees (ex-Microsoft most likely) who are happier in their jobs.

Re:Obsession with small business

What it boils down to is management, not the size of the business.

Except that you can't be a crappy manager at a small business, and stay in business long.

Big businesses depend on economies of scale that don't exist in small businesses... there isn't ROOM for an incompetent boob in a three-man operation.

You get to three-hundred, and, "Well, Johnson may be a bullying misogynist, but at least he shows up for work."

You get to three-thousand, and Johnson's bullying misogyny is percieved as "leadership".

Re:Obsession with small business

The problem is that small businesses that are really really good at what they do start to grow, and a handful of them turn into those giant unfeeling corporations that we loathe. From personal experience, I think the slide into corporate oblivion starts when the first MBAs join the company. An MBA is literally training on how not to be a human being. Business schools rob students of their humanity, and teach them only to worship short term profits. There is nothing wrong with focusing on making a profit, thats the engine that drives our economy, but these MBA grads that are being manufactured don't appear to be able to think long term, either at the long term sustainability of a company, or the long term sustainability of humanity.

Re:Obsession with small business

An MBA is literally training on how not to be a human being. Business schools rob students of their humanity, and teach them only to worship short term profits

I don't know why I'm surprised that this got modded up, but you really need to get out some. Are some people with MBAs worthless know-nothings? Of course. As are some people with every certification or degree known to man. It doesn't impugn the value of that education.

More and more, Slashdot seems to be sliding towards the groupthink that "People who are interested in business are bad." You know what? You can be a dynamite engineer with a fantastic development group and a kick-ass product. But if your salesforce can't sell, your management can't keep the company focused, your CFO can't get the financials straight (including making good decisions regarding cash flows and investments to make sure that you, the kick-ass engineer, gets paid every month), your product doesn't mean shit. Because it will never see the market.

Exactly, Are you just a Cog, or a Human?

I work in a small bussiness.

People in town know me, and I know them. The people who run the other small bussinesses in town all know me, and I know them.

With a relatively small number of customers, I have to treat them right, or we'd be out of bussiness really really fast.

When I do treat the customer right, I know that they'll tell their friends... and I also know that the other small bussinesses in town will stear people my way, just like I send bussiness their way.

Occasionally, I'll get customers who are complete assholes. Over a certain level of assholeness, and they're not worth my time or trouble... and I make certain to send them off to some large corporate store so I can concentrate on the customers who actually respond to being treated well.

The customers I want, I treat like gold.

Now, take your typical corporate environment. The workers could give a fark about their customers, because almost none of the workers in a corporate environment have a direct stake in how well the bussiness does overall (beyond making sure that it doesn't go belly up).

Your typical corporate employee treats the customers at a certain minimum level of service, because he'll be fired if he doesn't.

So, EVERYONE who goes to do bussiness with the corporate places gets treated in a "lowest common denominator" sort of way. They're not quite treated as badly as garbage that blew in off the street, but they're never treated like the "good" customers that I treat like gold.

Everyone in the corporate places, employees and customers alike, gets treated as just another cog in a big machine.

So, if you spend your money at big corporate places, you're in effect voting with your dollars to be treated just slightly better than assholes get treated. But, if you spend your money at small bussinesses and act like a decent human being, then you'll be treated much better.

Every dollar you spend at Wallmart or Blockbuster, is a dollar that you're "voting" with, to be treated as a disposable nothing who gets the bare minimum of courtesy... and nothing else.

I guess if you're a complete asshole, then you'd come out ahead in that bargain ;) Otherwise, you can only lose by giving your patronage to the big corporate places.

Re:Obsession with small business

Not sure where the hell you are getting this from. Just so you know, large companies don't consist exclusively of retail stores. Most large companies treat their employees well and provide good benefits. Just ask anyone working at Microsoft, Google, IBM, or another large company. Of course, you rarely hear about the good employers in the media.

Small business is just that -- small. Most small businesses are too small to pay a decent wage and provide decent benefits. They rarely hire full-time employees and don't always treat their employees well. Have you seen gas station employeees or Burger King employees that were happy with their jobs? Burger King or McDonald's is a perfect example of a small business. Most of those restaurants are owned and operated by a small, local franchisee. I doubt any of their employees are particularly happy.

Re:Obsession with small business

small companies employ a lot of people, not in each company but when that is multiplied over a huge number then you end up with a pretty bug number. People being in work is good for the economy. Not to mention that small companies won't relocate outside of the country, and the give a lot back in tax... so they are pretty good really

Re:Obsession with small business

OK, someone's got to go to look up the real number ... here ya go [house.gov]:

Small businesses play an important part in the United States economy. There are about 22.4 million non-farm firms in the U.S, according to 2001 data. Small businesses represent more than 99 percent of all employers. They also employ 51 percent of private-sector workers, 51 percent of workers on public assistance, and 38 percent of workers in high-tech jobs.

Not the 85% of all workers some guy was claiming, but much higher than I would have guessed.

Small and medium sized enterprises

The obsession is with what elsewhere in the world would be called medium sized companies and startups. And there is a simple reason why it is a good thing. SMEs are the feedstock. Many fail, some succeed, but they have the speed of action to exploit new opportunities. Apple began as an SME. Google was until recently an SME. eBay was an SME. Now tell me any large scale enterprise that shows real organic growth? Most of them can only try to absorb other companies and save money to pay the huge acquisition fees. They employ a lot of people - and frequently wish they did not and try to get rid of them by outsourcing, They run strange tax avoidance schemes that cause their profits to be relocated far from where their employees and customers are based. They incur nonproductive costs (lawyers, borrowing, lobbying) that don't impact nearly so much on small companies.

Show me a large company and I will show you an organisation with huge inbuilt inefficiencies and vast inertia. In the long term it is going to die or split up. That's part of the business cycle. To drive the business cycle, you need new dynamic startups and a regime in which, when they become medium sized, they can still grow. You need strength in depth, like the German Mittelstand. Some will be winners and turn into large companies. But if you only have large companies, in the long run there is nowhere but down. Small companies cannot monopolise their markets, so they have to do something well to survive.

I am surprised myself, but I find myself agreeing with Cringely - over the long term. Until recently it has taken a very big enterprise to build cheap computers, phones, or volume software. The problem is that these things are now commoditised to such a degree that they do not command a premium. It's like the transition from a world in which iron was a scarce commodity and the man who could afford a steel sword could be a military leader, to a world in which iron was a cheap building material and the emphasis moved to poeple who could think of new things to do with it. That this transition is happening over a couple of decades rather than a couple of millenia is a sign of some sort of progress.

Re:Obsession with small business

most small business ...do not pay for their [employees] health insurance

That is only an issue because of the dismal state of healthcare in this country. That is a serious problem that needs to be addressed on its own. Most industrialized "first world" countries provide healthcare for their citizens; don't blame the small businessman for the failings of government.

It seems to me that people have just automatically assumed that larger businesses are bad (by associating them with some bad actors among the super-big actors) and that smaller business are somehow intrinsically "good,"...

It's not a matter of "good" or "bad". The problem with large businesses is that they have a disproportionate amount influence on our lives. They own congress and rig the laws and tax code to favor them. They coldly lay off workers without remorse. They are large institutions who are beholden to no one but their shareholders. They do these things, not because they are "evil", but because they can. Any business, small or large, will do what it can to make money, it's just that some of the things large businesses are capable of are pretty nasty.
Small businesses are a part of the community, and have a human face. They're "one of us". Despite their relative inefficiancy, it is no surprise that people have a warmer opinion of them than their larger counterparts.

Re:Obsession with small business

Most industrialized "first world" countries ration healthcare for their citizens;

Sure beats letting the market determine who recieves care. Here, the rich get vanity surgery and specialists for everything, while the poor are treated only in the emergency room. From a humanitarian standpoint, our system is a failure.

Re:Obsession with small business

Sure beats letting the market determine who recieves care. Here, the rich get vanity surgery and specialists for everything, while the poor are treated only in the emergency room. From a humanitarian standpoint, our system is a failure.

We don't have free-market health care in the United States. Heck, we are literally a stone throw away at implementing socialized medicine in the United States. The high cost of health care is due to the cartelization and licensing of doctors and medicine, as well as government regulations. In fact, the US government spends more per capita on health care than even Cuba (communism's current trademark) does. Read here to see what the AMA has done to health care, as well as this article [fff.org], which describes how the United States's health care is anything but free-market.

I agree that our health care situation is bad, but the last thing that we need is socialized medicine. We need to move away from socialism. Socialism is a mistake of the 20th century, and it is best that we finally use free-market ideas.

The shortsightedness of America

This is a testamonial to the shortsightedness of America and specifically the business and political communities. This is happening all over the country. Most local governments give huge breaks to "big" companies to locate in their towns, while ignoring or hasseling the small businesses with too much buracracy. And they wonder why they don't generate as much tax revenue or big companies pull out, relocate, shut down or outsource out of the country? It may seem like some quick-fix or quick-cash but it's never worth it in the long and run.

New Rules

Want business, pay Google.
Want more business then the next guy, pay Google more.
Want to stay in business keep paying Google.
Want to kill the next guy, click-fraud your competitors, so they pay Google.
Oh oh, here some the spyware companies on your keywords, pay Google more money.

Bill it all to the customer of course, who is screwed no matter what.

Hash, but that's the new world order. Smart business. Now if Google would only apply all those smarts to something not evil.

Visual studio, anyone?

For anyone who read the article, the author suggests that Microsoft should license Vista and Office for no more than $50.
Visual Studio 2005 Express was originally thought to be priced $50 a copy, then Microsoft made it free (as in beer) for anyone who downloads it before November 2006. The express editions have pretty much anything that you get in the real thing, except Microsoft's analog for CVS and a few other enterprise things. Express is a great product for anyone who wants to have fun with coding or even write commercial applications. I think Microsoft may be heading in the right direction, because I'd never pay more that 50 bucks for Windows in the country where I live in, because the pirated version of XP Pro Corporate Edition costs $2.5 and because it's corporate, you'll never need to activate it - installs on any number of PCs without cracking anything.
And because I prefer to be on the safe side, I'm currently using a perfectly legal version of Kubuntu.

Re:Visual studio, anyone?

The express editions have pretty much anything that you get in the real thing, except Microsoft's analog for CVS and a few other enterprise things.

Pardon me for going off-topic, but I disagree with your categorisation of source control as "enterprise". All sensible coders should use it.

Never mind that...

This is not only a fundamental change in how advertising is done; it is a fundamental change in how BUSINESS is done.

For the sake of argument, let's put aside the total absence of numbers in that paragraph... But, if one company is going to be credited with "making a ton of money from people who never were even in business before", surely it's E-Bay!

What does cringely see as Apple's "platform"?

Microsoft can build software for a handheld or tablet computer, a mobile phone or a TV set-top box and even though the wrapper is different, the feel is always very much the same -- that of a fat PC client. Microsoft can't allow a phone to be a phone because they can't dominate and control a plain old phone unless it is more Windows than phone. That's a problem.

It surely is. That was obvious in 2000 when they came out with "Pocket PC", their most successful spin on the handheld, and "Stinger", their fialed attempt to get into the cellphone market.

The Pocket PC meant the end of the Windows CE micro-notebooks and the Windows-CE-based tablets. They were pushing Windows NT as the new tablet... the problem is that while Windows CE felt like a spin on Windows 95, and the Pocket PC felt like a Palm on steroids, the Tablet PC was just an overpriced notebook.

Luckily for Microsoft, Palm had no idea what their product was, and has been trying to turn Palm OS into Pocket PC... and failing, big time. If Palm was smart they'd be selling black-and-white 68000-based Palms for $30-$50 in every grocery store in the USA, and they'd still own the business... because Microsoft couldn't do that. But, no...

But, anyway... Microsoft's platform is Windows. If you're not Windows... even if you look like Windows, Microsoft just wants to make you an annex to the Windows desktop. And if you don't even look like Windows, Microsoft doesn't want you to be a platform. That's why they completely redid the XBox, people were turning it into a platform.

But what's Apple's "platform"? It's not the Mac, and it's not Mac OS, or Mac OS X, because their "handheld/..." is the iPod, and it's nothing like a Mac. It's not even tied in to the Mac. Apple's platform is, near as I can tell, "whatever they can make money selling". That's not something they can control like Microsoft can control Windows. Microsoft isn't Apple's proxy, but what is?

Big verses Small

I work for a small company. I used to work for several big companies. I don't make as much money now as I used to, but I have ten times more freedom and ten times more happiness and ten times less stress. I do more work than I did at the big companies, but it seems less like "work." Even though, technically I don't make as much money as I did working at some larger companies, somehow it feels like I do have more money. Maybe this is because the quality of my life has improved to the point where I am not engaging in consumeristic, distractive or self-destructive behavior as much as in the past, and this leaves me more resources as well as more peace of mind?

When I worked at big companies, there always was an illogical hierarchy that insured good ideas would get buried behind the ambitions of politically-motivated managers. People used internal memos to talk in lieu of face-to-face conversations. We had way too many meetings that didn't get a goddam thing done. And half the staff's specialization involved blaming others for things that went wrong. Normally accountability and responsib