Technology, Venture Capital, Private Equity

I was reading a post by Henry Blodget on how Google’s search income is beginning to close in on MS’s revenues from Windows, which is unnerving the latter. In the comments section, there were many who remarked, “Why should MS feel threatened? After all, there is no connection between the two.” However, the fact of the matter is that there is a connection, and nobody realizes it better than MS (the aborted Microhoo endevaour is proof of that) . Ever since the internet exploded as a phenomenon, there have been various attempts to reduce the OS to a “plug-in that will sit below network applications” as Marc Andreessen put it when he set up Netscape. Netscape, Sun and now Google have all sweated it out in that direction. And, surely enough MS has squashed all such attempts. However, Google seems to have attained a position that seems most threatening of the lot for many reasons - a)They have amassed financial resources larger than any other challenger in the past b)they arguably have a better engineering team than MS c)they have a disruptive revenue model, which MS is yet to gain mastery over. In short, they have everything that it takes to launch a serious attack, and that they seem to be doing via Google Docs and the rest.
So, what would I do if I were Google? Try and build a VMWare for the network. Sub-optimal utilization of server resources was a long standing problem, which VMWare solved to gain rich dividends (enough to earn it the “IPO of the year” tag for 2007). Now multiply that problem by many orders of magnitude and that’s what you get with networks. For instance, take a large corporate network of a transnational company (like GE or Citigroup). Just imagine the redundancy of resources (computational and memory) they have across all the desktops they own globally. Indeed all of their PCs would be “sleeping” half the time when employees switch it off and go home. Think about what could happen when a US employee at the end of his day frees his resources only for an Indian employee to utilze them. The cost savings would be enormous. If Google were to successfully crack that problem and provide “local clouds” to enterprises (over which net apps such as Zoho, Google Apps etc would run), that would provide them with a platform which could potentially make the underlying OS irrelevant. Frankly, I do believe it won’t be too long before someone actually does it. The technology more or less exists (think SETI or any of the mutiple grid computing companies that are there) and the economic need definitely exists. Now, its just a question of who will make it happen (and I pray it not be MS).