On a superficial level, the only threat Google Drive poses is to its rivals in the cloud storage space like Box and Dropbox. If you look at how Google Drive actually works and are willing to follow the logical extent of the service’s consequences, you might find that Google represents a direct stab at Microsoft’s very lucrative business productivity business, namely Microsoft Office.
Although Google Docs and Apps have notched some success in their long term campaign to carve out market share away from Microsoft Office, the real battlefield is not the actual application for business solutions. The real battle is over the data. If Google manages to move the focus of its war with Microsoft for office productivity to an area where it commands a strategic advantage, the dynamics of its struggle for market share will change dramatically. Google Drive might be the service that will supply the game changer Google needs.
Let’s look at how Google looks at the world. It is a data hungry machine that looks at every action users do, from searching to clicking links in Chrome to clicking +1 in Plus, as a valuable data sourcing opportunity. This information invariably helps google to index the information on the Web and rank it.
Now, if people generate user data that does not involve storage in a Google product or service, this data is lost to Google and deprives it of the opportunity to eat up more data it needs to do a better job organizing the Internet. One key and very common example of this is when people store their information on Word documents locally on PCs. Google co-founder Sergey Brin recently spoke out against companies and apps that seek to wall off data on the Internet. There is more than mere openness at issue here. This is also very much about Google’s ability to get to data and index it.
Which brings us back to Google Drive’s role in Google’s overall plans. By allowing people to store their data online, Google dissuades users from closing off their data by storing it on local PCs. In essence, Google just exploded their indexing opportunities through their free cloud storage service. While Google doesn’t need to publicize such cloud stored information to make money off it, it does provide a new frontier for cross referencing and indexing for its core service and money maker-targeted advertising. Now, when people are looking at very intimate and personal information on their Google Drive folders, they get hit by relevant contextual ads. In short, the more data Google can access, the more value it can provide through its advertising.
Google thrives on openness while Microsoft’s software products are local and closed. Microsoft wins when local software is installed and data created for it is stored on local hard drives. Google operates in the opposite manner. That’s where the battle is between Google’s vision and Microsoft’s. Who controls the data wins. That’s why Google Drive poses such a threat to Microsoft’s software business model. The Redmond Washington giant makes money when it sells software not when users read their documents. Depending on how well the computing public takes to Google Drive, we might have just witnessed the beginning of the end of Microsoft’s application suite hegemony.