The Wall Street Journal has an article entitled
The Men Who Came To Dinner, and What They Said About Email which contains the following excerpt
"Email is one of the liveliest niches in tech right now. Google,
Microsoft and Yahoo all view it as a key to winning new customers and
making money off current ones. And so they are innovating with new
email programs and services all the time. Since all three companies'
email teams are in my neck of the woods, I thought it would be fun to
have the heads of each team come over one night for dinner and
conversation. The three companies were good sports and agreed, in part
because I said I wasn't interested in a shouting match.
As it happened, Google's Paul Buchheit, 29 years old; Kevin Doerr, 39,
of Microsoft (no relation to the venture capitalist) and Ethan Diamond,
34, of Yahoo were all on their best behavior. Whatever they may say
about their competitors at work, at my table they were gracious and
complimentary. Gentle teasing was about as far as they would go.
The evening began with even the Microsoft and Yahoo delegates agreeing
that much of the current excitement in the email world can be traced
back to last year's debut of Mr. Buchheit's Gmail. The program had a
fast user interface with a fresh new look, along with a then-remarkable
gigabyte of free storage.
Mr. Buchheit said he started working on Gmail after observing that
other email programs were getting worse, not better. Microsoft's Mr.
Doerr said that at his company, Gmail was a thunderbolt. "You guys woke
us up," he told Mr. Buchheit. Yahoo's Mr. Diamond, then at a startup
with its own hot, new email program, said Gmail was the final impetus
that Yahoo needed to buy his company.
Mr. Buchheit responded with a victory lap. "We were trying to make the
email experience better for our users," he said. "We ended up making it
better for yours, too."
The evening wasn't all a Gmail love-in, though. The Microsoft and Yahoo
representatives said their many millions of users might not accept some
of Gmail's departures from email norms, such as the way the program
groups messages into "conversations." The two men also razzed Mr.
Buchheit a bit, saying that it had been easy for Google to promise a
lot of storage to its users because it carefully controlled how many
users Gmail would have by requiring an invitation to get an account."
As someone who has to build services which compete with Google's the
last statement in the above excerpt resonates with me. I tend to think
that in a number of their products such as GMail, Google Talk and even Google Pack, the
folks at Google are practising the lessons learned from articles such
as Joel Spolsky's
Fire & Motion.
In the article Joel Spolsky argues that large companies like Microsoft
tend to create technological imperatives that force competitors to
respond and keep up thus preventing them from focusing on new features.
Examples of Google practising Fire & Motion are somewhat
different from what Joel Spolsky describes in his article but the ideas
are similar. Google tends to create initiatives that are either
much more expensive for their competitors than them to provide (e.g.
giving users gigabytes of storage space for email but limiting sign ups
on the service) or would be detrimental to their market share to
compete with (e.g. allowing non-Google clients to access the Google
Talk servers). I've had co-workers joke that for every dollar Google
spends on some of its efforts, its competitors are forced to spend five
to ten dollars. Here is a back of the envelope calculation that illustrates this point.
|Email Service||Estimated Number of Users||Inbox Size||Total Storage provided
|GMail ||5 million||2.5GB||12.5 petabytes
|Yahoo! Mail||219 million|
Of course, these numbers are off because they are based on
estimates. Also I think the Hotmail numbers should be somewhat lower
since I haven't confirmed that we've rolled out the 250MB inbox to
every market. The point should still be clear though, Google has forced
its competitors such as Microsoft and Yahoo! to spend orders of
magnitude more money on storage which distracts them from competing
with Google in the places where it is strong. More importantly its
competitors have to provide from 10 to 20 times the total amount of storage
Google is providing just to be competitive.
This is often the dilemma when competing with Google. On the one hand,
you have customers who rightly point out that Google is more generous
but on the other the fact is that it costs us a whole lot more to do
the things Google does since we have a whole lot more users than they
do. The cool things about this is that it forces to be very imaginative
about how we are competitive in the market place and challenges are