Google's GDrive Torpedo Aimed at Microsoft's Hold (MSFT)

The WSJ says Google (GOOG) might finally get around to launching “GDrive,” its virtual hard drive. This has been in the works for years, so no great surprise.  But with Google Docs & Spreadsheets having paved the way and with “cloud computing” gaining steam, the timing may finally be right. And despite Microsoft’s recent strength, it should be afraid of this development–very afraid.

The critical element here will be seamlessness: If Google forces users to go through an inconvenient “uploading” process, the product will be just another easy-for-Microsoft-to-duplicate Yahoo Briefcase. If, on the other hand, Google can make it seamless–automatic saving to both resident hard-drive and GDrive–they’ll have another winner.

There are two reasons why this product, if successful, is so dangerous for Microsoft:  

  • First, it is yet another reason for PC users to ditch Windows. Apple’s resurgence is, in part, due to the weakening of Microsoft’s monopoly grip on the app and operating system market: Mac users are no longer a minor, forgotten people. The widespread adoption of GDrive, which is as much a virtual operating system as it is a virtual hard drive, would have an even greater impact.
  • Second, “cloud computing” represents a paradigm shift similar in magnitude to the one that ushered in the PC age; Incumbents generally have a very difficult time making such transitions. Despite 12 years of effort, Microsoft still hasn’t built a successful Internet business. This is no accident. Although Microsoft will protest until it is blue in the face that competing with Docs and Spreadsheets, GDrive, etc., is just a matter of flicking an Internet switch, it isn’t: It’s a whole different game.

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