Content note: Everything here is almost wholly speculative. I have no position in Google or Microsoft.
It’s hard to overestimate the shadow that Microsoft casts. While Microsoft is still a big company, it has decidedly fallen from grace. No one really expects the next great thing to come from them. They aren’t even a second fiddle. No one is eagerly waiting for the Microsoft Watch to come out.
So, companies that *are* it right now don’t want to end up like Microsoft. This includes Google.
It’s worth noting that Microsoft did not fail by failing to see what the future would bring. They foresaw mobile computing and invested billions into it. They foresaw tablet computing and invested billions into it. They beat everyone to market in the markets of the future. But they did it with products that were basically awful.
But why were they awful? Microsoft for decades had first pick among engineers graduating from prestigious universities. They set these people to work on the most important problems of the day with gobs of funding. Why didn’t it work?
The answer (if not in truth, then at least in legend) was a subservience to the company’s two cash cows: Windows and Office.
Microsoft’s tablet computers necessarily had to run a version of Windows. The purpose of the tablet from the beginning was to sell more copies of Windows. The decision to fork Windows into a tablet edition was not made because that was the best way to design a tablet. It was because the whole point was to extend the Windows franchise into a new space.
Similarly, Windows Mobile had to comport with the idioms of Windows, the desktop operating system. And its biggest selling feature had to be a bundled copy of Office, and the design of the device had to follow from the belief that what people really wanted in a mobile device was to review and edit Office documents.
The corporate apparatus faithfully executed these charges and produced the resultantly undesirable products.
Google is even more of a one-trick pony than Microsoft. Google the company and brand mean many things, but Google the cash-generating business is search. Or more precisely stated, search-driven, contextual advertising.
This can be a problem if you are, say, running Google Ventures and are able to make an investment that is wise but doesn’t mesh well with the needs and philosophy behind contextual advertising. It can be a problem if you are running Nest and want to craft user policies that make selling contextual advertising more difficult.
Sundar Pichai has undoubtedly received a hefty promotion by being named CEO of the new Google. But it must be acknowledged that the new Google businesses are carefully walled off not only from experimental projects but also from anything it might develop a conflict with. The other businesses under the Alphabet umbrella will not have to answer to Pichai, and they will have a wall purposefully constructed by the company’s founders that allows them to act without worrying about the implications for search.