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Android exists on a lot of products and appears to be successful, but the prognosis for the Chrome OS is dropping like a rock. This week, I thought I would go around and discuss Android with some of the folks who build and monitor the products and I got some interesting responses, which I will share here.

 

There is an interesting lesson playing out in the operating system space that may also showcase the future of the Chrome OS: The OEMs using Android are far from happy and Google's relationship with them appears to actually be getting worse. The problem appears to be with the model that Google is using, coupled with a hiring practice that appears to favor inexperienced young employees with high GPAs. The hiring problem likely affects a lot of their efforts, but the model will likely impact their platform efforts more strongly.

 

Let's talk about both.

 


Google's Failing Revenue Model

 

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Google's model is to give things away for free and then charge for them after the fact. It sounds brilliant particularly if you reach a position of dominance in search like they have because it creates an economic barrier to entry-you have to buy market share and you won't get to a decent revenue stream until you have significant numbers since ads are driving the revenue. However, that economic benefit is offset by what appears to be a significant problem: When you separate revenue from a product, customer satisfaction really suffers.

 

For Android this has translated to Google creating products and then modifying them largely in a vacuum because the OEMs aren't contributing to revenue and therefore don't get any real vote. The attitude appears to be that if you are getting something for free then you should be happy with what you get.

 

This pulls the actual solution provider out of the decision process and that is why the Android products generally feel unfinished when compared to their iPhone, RIM (Research In Motion) and even Windows Phone counterparts, and things don't seem to be improving very quickly.

 

This isn't a problem that can't be fixed. They could, for instance, create a quality metric driven by the OEMs and measure their people on it, but currently they haven't figured out how to replace money as the primary way that companies measure how well they are actually doing.

 

Staffing: Exacerbating the Problem

 

In talking to the OEMs, one of their biggest complaints was that the people they interface with are rude, unprofessional, inexperienced, clueless and generally unable to successfully resolve issues in a timely manner. The level of frustration with some of the OEMs is incredibly high. When confronted with this problem, Google's common response has been that they simply can't find qualified people, which is kind of amazing given the level of unemployment that exists in the world.

 

This suggests that Google's hiring policy is at fault; the company is known to favor recent graduates who will start at low salaries but have high GPAs, instead of more experienced employees. This exacerbates the quality problems significantly because it means these problems aren't being properly communicated, escalated or resolved. In fact, in talking to the OEMs, you get a sense that much of the team that Google has working on operating systems are actually learning on the job. It kind of makes it even more amazing that they got a product out that works as well as it does.

 

Wrapping Up: Android is in Trouble, Chrome OS Will Fail

 

Some of the problems that Google is having aren't unusual. Microsoft had similar staffing issues when they were ramping up to handle enterprise sales in the 90s, and IE6 problems were related to having a free product without a good alternative to revenue for measuring quality. This means that these issues can be corrected, but if one of the primary problems is one of communication, then Google may not yet fully grasp how bad they are. This is good news for challenging products like Windows Phone 7 and bad news for Chrome OS, which will likely have the same issues but be running against Windows 7 and not the mess of aftermarket OSs that Android came out against.

 

This suggests that Android may slide next year and Chrome OS will not approach expectations. The major lesson here, which encompasses the staffing issue, is that there has to be a strong intrinsic measure of quality that connects the users and the folks paying for the offering to the product. When the user is the end source of the revenue, that can be cash, but when you decouple revenue from the user you have to replace what you've lost. Google didn't do that and the end result is not meeting OEM expectations and Google may not yet realize how bad things are. And this means that Google management's projection that 60 percent of enterprises will switch to the Chrome OS suggests that Google has another problem: complete disconnection from reality.



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