Apple, Google: Eat Microsoft's Lunch? Suffer Microsoft's Indigestion

The conventional wisdom these days is that Apple and Google are eating Microsoft's lunch.

For Apple, the company has followed a well-chronicled path from a niche, artist-friendly computing platform to a revenue and profit juggernaut at the core of the IT industry. Apple's success came from making markets in smartphones and tablets -- two areas where Microsoft already had products but hadn't even come close to figuring out how to ignite public excitement for them. And ever since the iPod, Apple has been leveraging one product to generate buzz and market share for the next. The halo effect of the mobile devices is helping drive market share growth for Apple's computers.

Google, of course, established a search engine dominance that's afforded the company a beachhead for many other products. Microsoft's been pouring money into search ever since just to try to avoid ceding the whole market to Google.

Those successes in elbowing the one-time computing megapower out of the center of the IT universe are having some unintended effects. Yes, Apple and Google are eating Microsoft's lunch. But two headlines from last week demonstrate that they're both experiencing some of the same symptoms of indigestion that Microsoft suffered at the height of its run in the late 1990s.

First, controversial security guru Eugene Kaspersky caused a stir last week when he said that the Flashback/Flashfake malware heralded a new wave of Mac security exploits.

"[Apple] will understand very soon that they have the same problems Microsoft had ten or 12 years ago. They will have to make changes in terms of the cycle of updates and so on and will be forced to invest more into their security audits for the software," Kaspersky's CEO and founder told CBR in an interview at Info Security 2012.

To Kaspersky, as Microsoft and its supporters have been arguing to derision for years, Microsoft's security profile versus Apple's was more a matter of market share, not technology. As Apple gains market share, Kaspersky said his company is seeing more malware targeting Macs because "[c]yber criminals have now recognized that Mac is an interesting area. Now we have more, it's not just Flashback or Flashfake. Welcome to Microsoft's world, Mac. It's full of malware."

Ten years after Trustworthy Computing, could it be Apple's turn to invest tons of money on what is essentially customer support, a cost of playing in the big leagues?

Then there's Google, which couldn't have been pleased to find out last week that the Federal Trade Commission hired a prominent litigator in its antitrust investigation of the Mountain View, Calif.-based search giant. The litigator is Beth A. Wilkinson, who helped convict Oklahoma City bomber Timothy McVeigh.

While a government decision on whether to proceed with a case is said to be months away, experts quoted by The New York Times compared the move to the government's hiring of David Boies to go after Microsoft in the 1990s.

"It increases the likelihood that there will be a case," Douglas Broder, an antitrust expert, told the newspaper.

Whether the government should be pursuing Google is fodder for another post. What the effect will be is more certain -- a distraction for Google's management and an opportunity for the company's critics to tee off.

Apple and Google are coming to learn, as Microsoft did, that in tech, sometimes size brings more than economies of scale.

Posted by Scott Bekker on April 30, 2012