Google shifts software value to operations, away from IP

Google and Red Hat open-source software because they are increasingly competing on the efficiency of services, which Microsoft and others don't seem to understand.

Matt Asay Contributing Writer
Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.
Matt Asay
3 min read

Google CEO Eric Schmidt argues that competition is just a "click away." By opening up Google's access to personal data as well as the software that collects it, Google is adding substance to that claim.

Google's secret sauce? Operations.

It won't work to write better software than Google, because Google is not a software company. The only way to beat Google is through superior execution; through better operations.

The way to lose to Google? That's easy: try to sell software that Google is shoveling out the door as free (open source) software.

This thought hit me last week as Google announced the open-sourcing of its Closure tools. These are JavaScript compression tools that Google uses to build its own Web services like Gmail. Basically, Google was saying, "Here's how we build our software services. You can, too."

This follows on the heels of Google open-sourcing other software like Android ("Here's a free mobile operating system to help more people connect to our services"), Gears ("Here's how to run Google-like services offline"), and more, each opening up windows into the software that runs Google's services.

In many ways, Google is giving away the recipe to those that would like to build a Google clone.

The problem? Google is so much more than software.

In fact, one of the primary reasons that Google can write and open-source so much software is that it isn't a software company. Not even remotely. I could have every line of Google's software, both open source and proprietary, and I couldn't hope to compete with Google.

Google is what Google does with the software, and not the software itself.

Ditto for Red Hat. The company used to retain significant chunks of proprietary code in its Red Hat Network offering, but it has released that software under and open-source license in the last year. Doing so hasn't had any effect--positive or negative--on Red Hat's sales, because Red Hat isn't in the business of selling software anymore.

Red Hat, like Google, is in the business of providing services to customers, services enabled by software but which are much more dependent on IT operations and overall efficiency of execution.

And while both companies rely on open-source software to fuel those operations, Google, more than Red Hat, realizes that the conversation has moved on from open-source licenses to higher-order value, a theme that is going mainstream. Cloudera CEO Mike Olson captures this theme well:

The license terms attached to products have become secondary to the value it offers. People now are much more rational about how they adopt technology across the board. Open source is a detail, not a defining characteristic. At Sleepy Cat, we were proud to be an open source company. At Cloudera, I think of us as an enterprise software company that happens to be built on open source software.

Such sentiment would resonate well within the walls of Google's Mountain View headquarters, I suspect.

Even within their respective open-source communities, neither Google nor Red Hat company is particularly saintly. Red Hat has never waited on the Linux Standards Base or industry efforts to coordinate Linux distributions (like United Linux), but instead forged ahead with its own efforts...until the LSB simply adopted Red Hat's distribution as the standard.

Google, for its part, takes flak for dominating its open-source project communities like Android. Google's contributions (or lack thereof) to outside projects, like Linux, don't always mesh well with others in the industry.

To open-source community critics of Red Hat and Google, some advice: get over it.

The companies that spend the most time chumming around, talking up interoperability and the need for everyone to work together are usually the ones losing the race, a race whose rules may be written in software but whose victory depends upon execution.

Google and Red Hat have moved beyond software. Software enables their operations, but software doesn't define such operations. Google, for its part, is open sourcing Microsoft, one line of code at a time, and Microsoft hasn't a clue as to how to respond, because it only knows the old world: competition through better IP.

That world is gone. Open source has killed it. The new world is built on execution and superior IT operations. Google gets this. Red Hat gets this. Microsoft? Not so much.