Google's Love For Small Businesses

bariswheel writes "The Fearless Frog is at it again: In his latest post, Cringely aims to slap some sense into Microsoft, Apple, and IBM altogether. From the article: 'What counts is that for Microsoft the platform is the PC while for Google the platform is the Internet and nobody can hope to control the Internet -- not Microsoft OR Google. Google is making a ton of money from people [small/medium sized businesses] who never were even in business before. This is not only a fundamental change in how advertising is done; it is a fundamental change in how BUSINESS is done.'"

Obsession with small business

[Rydia]

For the life of me, I still do not get America's obsession with small business. Sure, smaller businesses are less powerful, but they're also problematic from an economic standpoint; most small business either don't hire very many employees, or do not pay for their health insurance, or even both.

I understand they're "living the american dream" and all that, but how much is that worth us as a society? It seems to me that people have just automatically assumed that larger businesses are bad (by associating them with some bad actors among the super-big actors) and that smaller business are somehow intrinsically "good," regardless of the costs to society a large number of small business vs. a smaller number of larger business incur.

Re:old ways...

[cubicledrone]

So what's antiquated about making a product and selling it?

Given so many companies seem to be incapable of doing it, a great deal, apparently.

Visual studio, anyone?

[zlogic]

For anyone who read the article, the author suggests that Microsoft should license Vista and Office for no more than $50.
Visual Studio 2005 Express was originally thought to be priced $50 a copy, then Microsoft made it free (as in beer) for anyone who downloads it before November 2006. The express editions have pretty much anything that you get in the real thing, except Microsoft's analog for CVS and a few other enterprise things. Express is a great product for anyone who wants to have fun with coding or even write commercial applications. I think Microsoft may be heading in the right direction, because I'd never pay more that 50 bucks for Windows in the country where I live in, because the pirated version of XP Pro Corporate Edition costs $2.5 and because it's corporate, you'll never need to activate it - installs on any number of PCs without cracking anything.
And because I prefer to be on the safe side, I'm currently using a perfectly legal version of Kubuntu.

Well, both use one product to support another

[undeaf]

Ms uses their monopoly in OS's to allow them to lose lots of money in consoles, apple uses their monopoly(AFAIK it technically is one) in mp3 players to keep their PC business safe.

Both also like bundling, ms bundles various stuff they want to push in with their OS, apple bundles together hardware, an OS and a platform for 3rd party programs(though you can't blame them for not encouraging a wine type API for other platforms, and they probably don't even resist it as much as ms).

Big verses Small

[humankind]

I work for a small company. I used to work for several big companies. I don't make as much money now as I used to, but I have ten times more freedom and ten times more happiness and ten times less stress. I do more work than I did at the big companies, but it seems less like "work." Even though, technically I don't make as much money as I did working at some larger companies, somehow it feels like I do have more money. Maybe this is because the quality of my life has improved to the point where I am not engaging in consumeristic, distractive or self-destructive behavior as much as in the past, and this leaves me more resources as well as more peace of mind?

When I worked at big companies, there always was an illogical hierarchy that insured good ideas would get buried behind the ambitions of politically-motivated managers. People used internal memos to talk in lieu of face-to-face conversations. We had way too many meetings that didn't get a goddam thing done. And half the staff's specialization involved blaming others for things that went wrong. Normally accountability and responsibility go hand-in-hand, but not in big companies. And things constantly broke down and got lost in the cracks. When I was young, this was huge hit to my idealism and I had to make a decision: Did I want to live my life this way and end up being programmed to accept mediocrity as the status quo? Or did I want to find an environment where the people were truly appreciated and weren't constantly living in fear that some corporate boss would cut their job without even introducing himself?

I would never go back.

Small and medium sized enterprises

[Flying pig]

The obsession is with what elsewhere in the world would be called medium sized companies and startups. And there is a simple reason why it is a good thing. SMEs are the feedstock. Many fail, some succeed, but they have the speed of action to exploit new opportunities. Apple began as an SME. Google was until recently an SME. eBay was an SME. Now tell me any large scale enterprise that shows real organic growth? Most of them can only try to absorb other companies and save money to pay the huge acquisition fees. They employ a lot of people - and frequently wish they did not and try to get rid of them by outsourcing, They run strange tax avoidance schemes that cause their profits to be relocated far from where their employees and customers are based. They incur nonproductive costs (lawyers, borrowing, lobbying) that don't impact nearly so much on small companies.

Show me a large company and I will show you an organisation with huge inbuilt inefficiencies and vast inertia. In the long term it is going to die or split up. That's part of the business cycle. To drive the business cycle, you need new dynamic startups and a regime in which, when they become medium sized, they can still grow. You need strength in depth, like the German Mittelstand. Some will be winners and turn into large companies. But if you only have large companies, in the long run there is nowhere but down. Small companies cannot monopolise their markets, so they have to do something well to survive.

I am surprised myself, but I find myself agreeing with Cringely - over the long term. Until recently it has taken a very big enterprise to build cheap computers, phones, or volume software. The problem is that these things are now commoditised to such a degree that they do not command a premium. It's like the transition from a world in which iron was a scarce commodity and the man who could afford a steel sword could be a military leader, to a world in which iron was a cheap building material and the emphasis moved to poeple who could think of new things to do with it. That this transition is happening over a couple of decades rather than a couple of millenia is a sign of some sort of progress.

Re:Obsession with small business

[CokeBear]

The problem is that small businesses that are really really good at what they do start to grow, and a handful of them turn into those giant unfeeling corporations that we loathe. From personal experience, I think the slide into corporate oblivion starts when the first MBAs join the company. An MBA is literally training on how not to be a human being. Business schools rob students of their humanity, and teach them only to worship short term profits. There is nothing wrong with focusing on making a profit, thats the engine that drives our economy, but these MBA grads that are being manufactured don't appear to be able to think long term, either at the long term sustainability of a company, or the long term sustainability of humanity.

Not just local governments and small businesses

[WidescreenFreak]

This is not a phenomenon solely for local governments. All levels of government are just as bad. This is also not restricted to small businesses.

For example, if you're in Pennsylvania and take Interstate 81 south you'll suddenly see a number of major corporate buildings in all fields - manufacturing, financial, consulting - across the Mason-Dixon before you even get a chance to cross the border. This is because various states also have different ways of handling corporations. As a Pennsylvanian, I can state for a fact that the Commonwealth of PA is *not* tax friendly and instead treats its citizens and businesses as an endless money pit that is constantly subject to increasing taxes. It's no wonder why corporations mock Pennsylvania by having so many offices across the border. Same with Delaware. Their tax laws are much friendlier than Pennsylvania's, which is why so many financial mega-corporations are headquartered in DE.

One thing that I have noticed, however, is that PA municipalities, particularly in the more rural areas, are becoming increasing hostile towards big corporations. Wal-Mart has been defeated no less then three times in the past two years from building their mega-stores in the Harrisburg/York/Lancaster area due to citizens fighting them. I know that Wal-Mart is a favorite anti-corporation whipping boy in the past few years; however, the reasons that were cited for stopping W-M include undesirable increase to local traffic and destruction of local, small businesses, both of which are commonplace after-effects of W-M.

Of course, the U.S. itself is very hostile to businesses because of the on-going mentality that if you're rich, you've done so solely through ill-gotten means and therefore need to be punished through taxation. The increasing conversion of the U.S. from capitalism to a federal socialism is also not conducive to corporations or frankly anyone who wants to work hard to achieve wealth because if you're rich, you're living unfairly and need to have your income forcibly removed so that the local, state, and federal governments can give it to others more deserving of your money than you. This is one of the reasons why so many companies have their corporate headquarters off-shore where they can't be subject to the taxes and regulations. Whether or not people think that's ethical, I think that anyone with any sense of economics can at least understand why corporations do that, particularly with so many other countries offering greatly reduced taxes or no corporate taxes at all.

I agree with you completely that small businesses are the ones that get hurt the most. They don't have the clout and financial support that mega-corporations can fall back on. However, harmful taxation is not limited to being subjected to small businesses nor are local governments the only ones who create an environment that is hostile to small businesses. All levels of government are too blinded with short-term greed because of tax dollars that they think they can collect in the here and now.

Re:Obsession with small business

[Anonymous Coward]

Most economic and employment growth comes from small and medium businesses. Large businesses grow mainly by buying up competitors and then laying of a bunch of employees.

Most new ideas also come from small and medium businesses.

Re:Obsession with small business

[alienw]

Not sure where the hell you are getting this from. Just so you know, large companies don't consist exclusively of retail stores. Most large companies treat their employees well and provide good benefits. Just ask anyone working at Microsoft, Google, IBM, or another large company. Of course, you rarely hear about the good employers in the media.

Small business is just that -- small. Most small businesses are too small to pay a decent wage and provide decent benefits. They rarely hire full-time employees and don't always treat their employees well. Have you seen gas station employeees or Burger King employees that were happy with their jobs? Burger King or McDonald's is a perfect example of a small business. Most of those restaurants are owned and operated by a small, local franchisee. I doubt any of their employees are particularly happy.

microsoft pushing into the small business arena

[dioscaido]

Actually, MS is pushing pretty hard into the small business arena.

They have retail management [microsoft.com] and point of sale software [microsoft.com] for small businesses. Plus many offerings for business accounting, like SBA [microsoft.com]. They actually have some pretty cool offerings in this area, compared to the competition anyway.

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[account_deleted]

Comment removed based on user account deletion

Re:Obsession with small business

[Jherek Carnelian]

Dude - you proved his point with your own numbers. If companies larger than 500 employees account for only 50% of employment, then obviously the other 50% are employed by companies smaller than 500 employees. So approximately 50% of the workforce is employed by small businesses.

Re:Exactly, Are you just a Cog, or a Human?

[covertbadger]

So much bollocks. My last job was at a small, family-owned company (50 employees). Most of the staff were treated like cattle by overbearing board members who paid peanuts whilst pocketing artifically-inflated salaries themselves. To a man they drove Mercs, BMWs, and Bentleys; to a man they had personalised number plates. They pissed off the local community (a small, pretty town in Hertfordshire) by buying out the lease from the only local library and using it as a training centre for contracted security staff. My boss, in particular, was an ill-educated bully with *absolutely no* qualifications at all (not even GCSEs - in fact he was only just above the literacy line, and had a secretary purely to read anything more complicated that a 5-line email for him), who owed his position and authority to a combination of luck and stomach-turning obsequiousness to those on the board. Finally, clients (typically local councils and magistrates' courts) were treated like pond scum and routinely told what was good for them, even when it was crystal clear that the opposite was true. And yet, at the time I left, the company had been growing an average of 30% year-on-year for about 4 years.

I have no great love for mega-corporations - my current employer has about 700 staff, and I chose to work there specifically because the company visibly behaves ethically in an industry full of cowboys - but to claim that all large corporations are evil and all small businesses are automatically socially-responsible good-eggs is astonishingly naive. From experience, I know that there are successful small businesses out there who are about as pleasant as a viper nest and will pillage your wallet with as much gusto as any convicted monopolist you care to mention.

Be that as it may

[SpiritGod21]

You have to have something on which to run the internet. Can we really compare Google and M$/Apple? They started in very different fields with very different goals. Of course their business model is different; they're in different businesses! Of course, M$ is trying to move more into what has become Google's domain, but that's nothing new, nor should it be discouraged. Competition is always beneficial. We just shouldn't be surprised when different companies that have different goals also have different business models.

Re:Well, both use one product to support another

[undeaf]

I'm under the impression that ~80% marketshare is easily a monopoly, I don't think courts could get an oportunity to decide if it's one or not because if it is it's not really a monopoly that's abbusable at the moment. Either way, they're still both dominating a market and using their success in that market to safeguard their efforts in another market. This similarity implies that either of them can hurt the other by entering the other's lucrative market, just as apple weakens microsoft's monopoly by producing an OS(even one only available bundled), so to could microsoft hurt apple with a competitor to the ipod(especially if it was subsidized).

Apple does get treated like a monopoly, those who feel that mp3 players are responsible for hearing damage like to pick on apple about it.

Re:Visual studio, anyone?

[andy9701]

I would agree with that. However I would never use the words "SourceSafe" and "enterprise" in the same sentence. The only reason SourceSafe is used as much as it is is because it's included with Visual Studio, making it cheaper than the other options out there (excluding CVS, Subversion, etc...but let's not go there).