Back to the switching argument again: Ask yourself how many people or businesses you have seen that switched from Microsoft to Google in the last year. Then ask the opposite: How many have switched from Microsoft to Google?
If your observation is similar to mine, you will conclude that this is a one-way street: Google is winning everything, and losing nothing -- at least to Microsoft. This is why Microsoft is growing revenue and earnings at one third Google's pace.
And it's not just companies switching from Microsoft to Google. What about new startups? I have been meeting with startups almost every other day for over a decade, and in the last few years I have not seen a single one building its IT on Microsoft. It's 100% Google -- apps and Gmail.
Of course, Apple (AAPL) has a strong device presence, from PCs to smartphones and tablets.Google is opening up additional fronts against Microsoft. The 700,000-plus core Compute Engine is one such front. Sooner or later, Google is also likely to get into the gaming console market, one would think. Most visibly, and relatively near term, however, should be Google's increasing emphasis on the PC business. So far, Google has marketed Chrome OS PCs mostly to some schools, where it has had some success in places such as the South Carolina and Florida school systems. Google's timid approach to marketing a well-received product will soon change. In only a few short months from now, we should expect more PC markers -- the likes of Dell, HP, Lenovo, Acer, Asus, Sony and equivalent -- to introduce and market Google laptops and desktops. When Google goes after the PC market with more effort, more people are likely going to see the threat to Microsoft. Judging from how good Google's current PCs (made by Samsung) are, this will likely cause material harm to Microsoft. Of course Google's product portfolio continues to lack in some important areas. I already mentioned the gaming console. Something to compete with Microsoft Outlook is another. Google Calendar is almost there, but not quite. Google's most glaring weakness in the entire company's portfolio is the address book, which is far behind Outlook in important functionality. Conversely, Microsoft has remaining advantages with the Xbox 360 and Outlook. One embarrassing shortfall for Microsoft is that its new Windows 8 RT operating system will not get Outlook. This is the equivalent of BlackBerry launching a new product without email and a physical keyboard. People will soon wake up to this embarrassment.
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