Google, Microsoft, Lunch

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This post was co-authored with Jeremy Pickens

The RescueTime blog, in a piece titled Google is eating Microsoft’s lunch, one tasty bite at a time, showed a comparative usage analysis between Microsoft Office tools and various Google tools such as Gmail, Google Docs, etc. Based on an analysis of their several hundred thousand users, they claim that the use of Microsoft tools had declined whereas the use of Google tools increased.

There are a bunch of problems with this analysis.

The data that it compares is in terms of total number of RescueTime users, and total amount of time spent by those users. That’s not a helpful comparison to understand whether there was a shift away from Microsoft because it’s not clear whether the RescueTime user sample is representative of the bulk of MS Office suite users.

If the thesis of their analysis (as suggested by the title) is that people are switching from MS Office to Gmail and Google Docs, the analysis should really  compare relative usage rates among the number of computer users who would have spent money on productivity software, but chose not to.

This analysis is reminiscent of  the music companies’ claims that they were losing billions because of Napster downloads. They made the claim that every single song that was downloaded by anyone, anywhere, represented a lost sale, that this was money that otherwise would have gone into their pocket. That couldn’t be further from the truth.

  • First of all, many users were downloading songs that they already owned on tape or vinyl — and would have digitized themselves instead of spending $1500 re-buying their own collection, had Napster not existed.
  • Second, it ignores the fact that many users were also just grabbing whatever they could for the purpose of creating a large, personal sampling collection. I knew people in college who downloaded 30,000 songs, but there is no way that they would have spent $30,000 on music, if Napster weren’t around. Furthermore , even if they had the money to spend, 30,000 songs at 3 minutes each is 62.5 nonstop days worth of music. Or, if you listened to 8 hours a day, it would take you 500 days just to hear your entire collection once.

So no, all these people did not represent the claimed lost income for the music companies.

And yet if you applied the same logic as this article, you would say that Napster was eating the music companies’ lunch. No, I’m sorry. I don’t buy it. What I really need to see is how many paying customers have switched, not how many people who would have never paid in the first place.

Finally, it’s worth pointing out that the article over-states Google’s contribution to web-based e-mail. The article claims that “Google proved you could do email in the cloud not only competitively, but for free.” Um, no. Google proved that you could make a nice tagging interface for e-mail, but Hotmail was launched in 1996, and sold to Microsoft in late 1997. Yahoo! Mail also predates Google’s offering. And in terms of visits (which should correlate with e-mail users), Gmail sees about 1/4 of the traffic of Yahoo! Mail and a bit less than 1/2 of the traffic of Windows Live Mail (formerly Hotmail), not counting people who access their e-mail through POP3 or IMAP interfaces.

In terms of the number of users, CampaignMonitor claims that about 37% of all users use some flavor of Outlook, 16% use Hotmail, while less that 6% use Gmail.  According to TechCrunch,  in 2007, Gmail had 51M, Yahoo! Mail had 250M, and Windows Live Mail had 228M users. I don’t know how reliable any of these numbers really are, but there seems to be some consensus that Outlook use exceeds Gmail considerably in the general population.

In short, one can conclude from RescueTime’s data that their users are not representative of the general population of e-mail users. I think Microsoft’s lunch is still pretty safe.

Google is eating Microsoft’s lunch, one tasty bite at a time.

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1 Comment

  1. Jake says:

    I think this is an interesting commentary on a generally flawed analysis of usage patterns of office tools. While detailed, your commentary seems to (almost purposely?) leave out an interpretation for what is obvious from the article’s statistics: the usage of Google’s online productivity offerings has a consistent new user adoption rate. I think it’s less important to debate who is using what tools the most, but examine what it means for the world to move from a “one stop shop” approach of only using MSO, to a setting where lots of different services/applications are being used to support a user’s productivity. Simply, I think it’s more profound that I’m now using both Word AND Google Docs on a daily basis, rather than abandoning one tool for the other.

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