Review of 2009

by on 09/12/2009

Introduction

As we approach the end of the year, it is a good time to ask ourselves the following questions:

  • Has 2009 been a good year for the IT industry?
  • Have we seen the kind of product and service innovation that has characterised the rest of the decade?
  • Microsoft vs. Google vs. Apple – who is winning?

This article looks at 2009 through the eyes of the three largest and innovative IT companies, Microsoft, Google and Apple. These companies have been locked in conflict for most of the decade with competing products in almost all sectors. The article takes the opportunity at the end of the noughties to evaluate who is winning each battle.

Whilst we are looking at the big three players, there have of course been many other innovations in 2009. In IT hardware the netbook and e-book reader markets have evolved rapidly. In smartphones, RIM’s BlackBerry Bold 9700, Palm’s Pre and very recently the Motorola’s Droid (a.k.a. Milestone in the UK) push the boundaries of what these devices are capable of. In television, the BBC’s iPlayer and personal video records (PVRs) such as Sky+ are revolutionising the way we consume programs and on the Internet Wolfram Alpha has showed a tantalising glimpse of how search engines could look in the future.

The Big Players – Microsoft, Google and Apple

According to Fortune Magazine’s Global 500 list of the world’s largest corporations, the largest IT companies in 2009 are Microsoft (in 117th place), Apple (253rd) and Google (a surprising 423rd). Well actually, we have Siemens (30), HP (32), Samsung (40), Hitachi (52), Sony (81), Dell (115), Fujitsu (161) and Oracle (408), but these companies are manufacturers and are not innovators.

2009 brought Microsoft, Apple and Google into direct confrontation in almost all IT sectors. All three now have desktop operating systems, Internet browsers, word processing and other office applications, smartphone offerings and crucially all three are embracing the Internet. 2009 was an exciting year with significant innovation from each of these players and it is fascinating to see where they are in direct competition and where their strategies differ. 2010 promises to continue to be exciting with these players trying desperately to maintain and enhance their market share.

Microsoft

2009 was a significant year for Microsoft – it was the year that CEO Steve Ballmer took over all the day-to-day operations of the company from Bill Gates.

Microsoft launched Internet Explorer 8 in March, the first major upgrade since IE7 was released in 2006. Despite Internet Explorer being generally regarded as inferior to various alternatives including Mozilla’s Firefox (it is significantly slower and less compliant with standards), Microsoft continues its domination of the market with only a very slight decrease in market share to 69.8%. Microsoft long-drawn-out feud with the European Commission is finally over – the EC accepted Microsoft’s commitment to offer users a choice of which browser they wish to install.

Microsoft launched Bing, its rival to Google Search in June and has rapidly grown to take nearly 10% of the search market. The UK version of the site came out of beta in November and although it lacks some of the features of the US version it provides a solid and in some ways superior search experience to Google. Google needn’t be too worried yet – it still has 65% of the market – but Microsoft has done a deal to power Yahoo’s search, which will give it a boost if the alliance gains regulatory approval.

In software, Microsoft has had a busy year. Its latest desktop operating system, Windows 7, was launched in October, with the usual fanfare and the wonderful Windows 7 launch parties. Released less than three years after its predecessor, Windows Vista, it has received overwhelmingly positive reviews (unlike Vista) and Gartner has commented that the upgrade is “all but inevitable” for most organisations.

Microsoft has also updated its server product line with releases of its server operating system (Windows Server 2008 R2) and its email back end (Exchange Server 2010).

Apple

Apple brought out its latest operating system, Snow Leopard in August, which concentrates on performance and efficiency rather than end user features. It was competitively priced at £25, causing Microsoft to rapidly review and change their pricing for Windows 7. Microsoft Windows remains the dominant operating system, especially in the business market, with latest figures showing that it has 90.6% of the market with Apple lagging far behind on 5.79%. However, the trends look slightly more positive for Apple which has gained a slight advantage (less than 1%) at the expense of Microsoft.

Apple’s iPhone, iPod and iTunes cash cow showed no sign of abating in 2009. They brought out the iPhone 3GS in June together with version 3 of the operating system. This was a minor upgrade to both rather than the major innovation of the previous two versions. Apple currently has the music market completely sewn up – it has over 70% of the online music market (25% of the overall music market). It faces competition from streaming services such as Spotify and Sky Songs which it appears to have recognised with its recent purchase of music streamer Lala. If Apple’s iTunes starts to offer streaming music, then it will potentially change the face of music retailing for a second time.

Although the iPhone remains the smartphone of choice for the majority of people and is making increasing inroads into the business market, it is in fact only in third place with 18% of the market (behind Nokia with 40% and RIM / BlackBerry with 21%). However, its market share is rising rapidly – up from 14% in the previous quarter. Microsoft’s share of the smartphone market is falling slightly and Google’s continues to rise steadily – it now has 4% of the market.

The Apple App Store has had a phenomenally successful year, passing the 100,000 application mark in November and with over a staggering 2 billion downloads to date. This success has spawned each of the competitors to launch something similar. Apple claim that “App Store” is a trademark, so there is the Blackberry App World, the Windows Marketplace and Google’s Android Market, although none of these has come close to the success of the Apple predecessor.

Apple released various hardware updates in 2009, with a new version of the MacBook Air in mid-2009 and a couple of updates of iMac range. The year also saw the return of Apple’s CEO Steve Jobs. The biggest disappointment of the year was the non-appearance of the fabled Apple tablet computer. The rumour mill now expects this in early 2010, but don’t hold your breath.

Google

Google launched its Internet browser, Chrome, in December 2008 and has been pushing its use through 2009 with version 2 being released in May and version 3 in September. Beta versions for Linux and Mac were finally released this month (December 2009), but Google has an uphill battle on its hands to gain users – it lags in fourth place at only 4% of the market.

Google led the way in online delivery of office suite applications such as word processing and spread sheets with its Google Apps product. The full suite of Google Apps applications came out of beta in June and now offers full synchronisation with Outlook. Whether or not users want to trust their data to be stored by Google in “the cloud” remains open to debate, however Microsoft clearly thinks that it is possible and has incorporated Web Apps in its forthcoming Office 2010 offering.

Perhaps the most interesting Google launch this year is the Chrome operating system (OS). This is Google’s attempt to take on Microsoft, particularly at the very cheap end of the PC market such as on netbooks. If you power up a device with Chrome OS on it, it will boot in about 7 seconds and take you straight to a web browser. There is no local storage and there is no ability to install applications so anything and everything that you want to do on the machine is reliant on your Internet connection and data in the cloud. Google Chrome OS was launched in November although no mainstream devices running it are expected until mid-2010. Whether or not people will wish to be completely reliant on the Internet is a hot discussion point at the moment. Regardless, it’s a brave move by Google to break one of Microsoft’s main monopolies, and it will be interesting to see how it evolves.

Google Wave is a similarly ambitious attempt to redefine something that we are all familiar with, in this case email (or “personal communication and collaboration tool” according to Google). The product is a web-based service designed to merge e-mail, instant messaging, wikis, and social networking.

Conclusion

Microsoft, Apple and Google share prices in 2009The financial figures illustrate the story for 2009. Although Apple has had a marginally better year than Google and Google has had a marginally better year than Microsoft, each company has followed the same pattern.

Each of the three companies has had an excellent year, bringing new and innovate products to the market, and 2010 promises to be equally an equally exciting and dynamic year.

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