In episode nine of "Acquired," hosts Ben Gilbert and David Rosenthal discuss the history of Google's productivity suite, including the acquisitions of companies like Upstartle (Rightly), which became Google Docs, and 2Web Technologies, which contributed to Google Sheets. They explore how Google strategically acquired bare-bones applications and developed them in-house to create a suite that rivaled Microsoft Office. While the suite, including Google Docs, Sheets, and Slides, became widely used, the discussion highlights how it didn't evolve into a significant revenue stream for Google. The episode also touches on the broader context of Google's focus and its potential distraction from other ventures, contrasting it with Microsoft's dedicated investment in productivity software. Additionally, the episode features a sponsorship segment from Pilot, a company offering comprehensive financial services for startups.
"Welcome back to episode nine of acquired, the show where we talk about technology acquisitions that actually went well. I'm Ben Gilbert." "I'm David Rosenthal, and we are your hosts."
The quote introduces the podcast hosts and sets the stage for the episode's focus on successful tech acquisitions, specifically in the realm of productivity software.
"This week we're going to be covering an older acquisition, but following a theme from our last episode in productivity software, we're going to be covering what became the eventual suite known as Google Drive, Google Docs, Google Sheets, and Google presentations. Google Slides."
The quote summarizes the episode's focus on Google's strategic acquisitions that led to the creation of its productivity software suite.
"And then in March 2006, Google announces that they had acquired the company for an undisclosed amount, rumored in the $10 million range."
This quote provides details on the acquisition of Upstartle by Google, which was a pivotal moment in the development of Google Docs.
"Google spreadsheet launched in Labs in June 2006, rightly was acquired in March 2006, and then shortly thereafter, in the beginning of 2007, Google Docs based on rightly was released publicly."
The quote outlines the timeline of Google Spreadsheets' launch and the public release of Google Docs, emphasizing the rapid development post-acquisition.
"And it's pretty amazing how quickly Google turned these acquisitions around. September 2007, Presentations was launched, and finally, there is now a full suite of Microsoft Office esque productivity software in the cloud."
This quote highlights the swift integration and launch of Google Presentations, rounding out the cloud-based productivity suite.
"That's right. But don't ask Eric Schmidt that. When they announced Google Docs and spreadsheets, he definitely told a gigantic audience full of people that they were not indeed competing with Microsoft and it was not a competitor to Office."
The quote captures the contradiction between Google's product offerings and its public stance on competition with Microsoft Office.
"All these companies, these five or so companies that Google acquired, that became the backbone of Google Docs, there were all these rumors, I don't know if you remember, Ben, around the time for years, about the mythical G drive."
The quote reflects on the rumors and anticipation surrounding Google's cloud storage solution, which was later realized as Google Drive.
"To me, technology, I think all these acquisitions, primarily, rightly, were these kind of experimental Ajax apps, and everybody was seeing what they could do with Ajax at the time."
The quote emphasizes the technological aspect of the acquisitions, focusing on the innovative use of Ajax for collaborative web applications.
"Google decided they wanted to get into the business of productivity apps and they wanted to take a typically Google bent on it and put them in the browser instead of being installed software on your pc."
This quote explains Google's strategic decision to create a business line around browser-based productivity applications, differentiating from traditional installed software.
"Business and made the judgment that buying was going to be a faster way to get there than building in house." "Yeah, it sure does feel like a case study in the buy versus build."
The quotes underline the strategic decision faced by businesses to either buy existing solutions or build them internally, with Google opting to buy as a faster route to market.
"And what's interesting is it's also, I think, blending a little bit kind of the tech themes."
This quote reflects on how Google's strategy blended different technological themes to create a comprehensive suite of productivity tools.
"Does it make sense for them to be in the productivity game at all?"
The quote poses a strategic question about Google's involvement in the productivity software market in relation to its core advertising business.
"Alphabet's revenues now are reported as Google and other like, they're so fascinated with this, what's the next widget."
This quote indicates Google's (Alphabet's) ongoing quest to diversify its revenue sources beyond its traditional search business.
"And I think this is a big part of the question of what does Google want to be when it grows up?"
The quote encapsulates the discussion around Google's long-term strategic goals and its evolution as a company.
"I mean, you have the big thing that the enterprise people are buying with these companies that need every single last feature of office, even though any given person only uses 5% of it."
This quote discusses the traditional enterprise software model and how Google Docs challenged it by offering a more streamlined set of features.
"Do you think that as all of these businesses are betting on that being the cash cow of the future, do all of them need all of the layers?"
The quote questions the necessity for tech companies to offer a complete range of cloud services, including productivity software, as part of their business model.
"No farther than AWS to see mean AWS started as infrastructure. That's what they do. And of course they've moved up the stack and added other things, but they aren't offering email."
This quote highlights AWS's core focus on infrastructure services and their expansion into other areas, despite not being a major player in email services.
"They're pretty far and away the leader. And it's interesting to think about what could Google have done rather than copying the Microsoft strategy in the mid two thousand s of, okay, we've got the quote unquote operating system, now we're going to do productivity."
The quote suggests that AWS's leadership in cloud infrastructure is solid and questions Google's strategic choices in trying to emulate Microsoft's focus on productivity software.
"Well, yeah, it's interesting. I think with Google app engine you were locking yourself into Google's proprietary data storage and you had to use Python."
This quote explains the limitations of Google App Engine, which locked users into a specific technology stack, contrasting with Amazon's more flexible approach.
"And you look at the diversity of companies and enterprises and workloads that have adopted Amazon over the past few years. And you mentioned Dropbox moving off of Amazon. But for the longest time, Dropbox, Amazon kind of won the first round of this fight across productivity because everybody used AWS. Dropbox paid the Amazon tax."
This quote discusses how AWS won the first round in cloud services by being the platform of choice for diverse companies, including Dropbox, which incurred costs for using AWS.
"And instead, actually, I mean to bring back to our last episode, what you've seen happen is this resurgence of Microsoft, of the original winner in this space with granted some expensive acquisitions that they've made."
The quote mentions Microsoft's resurgence in productivity software, highlighting their strategic acquisitions that have contributed to their success.
"And what's really interesting here is that I don't think anyone would argue that the cloud versions of Word and Excel and PowerPoint are great or beating a resurgent or beating Google Docs. But it doesn't matter."
This quote suggests that despite the quality of Google Docs, Microsoft's productivity suite is winning in the market because of factors beyond product quality alone.
"Microsoft is a productivity company. Operating system, productivity company and operating system, broadly defined, that will become something much more cloud oriented. Google is an advertising company."
The quote clarifies the fundamental business focuses of Microsoft and Google, with Microsoft being primarily concerned with productivity software and Google with advertising.
"Had these companies, let's take Rightly for instance, had that been an independent company, launched publicly and let's say they built Google Docs, what would that look like?"
This quote prompts consideration of alternative market scenarios where independent companies could have shaped the productivity software landscape differently.
"Our sponsor for this episode is a brand new one for us, Statsig."
This quote introduces the sponsorship segment, highlighting Statsig as the sponsor for the episode.
"Do we think Box or Dropbox could ever be a company at the scale of Microsoft or Google or Amazon? Personally, I think that's hard to see."
This quote expresses doubt about the growth potential of Box or Dropbox to reach the scale of the largest tech companies.
"If it does go that direction, it's box going the Microsoft route and Dropbox pioneering. Some need. They need consumers to pay, which is a really hard thing to do for utility file storage, thing like that."
Ben Gilbert highlights the challenges for cloud storage companies in getting consumers to pay for what is essentially a utility service.
"What happens is Dropbox buys upstartle and then you have the Microsoft equivalent of OneDrive and Word online, and that is sort of the stack."
Ben Gilbert imagines a scenario where Dropbox acquires a company to enhance its product offerings, similar to Microsoft's strategy.
"Clearly Dropbox has had these thoughts as well. I mean, they bought mailbox and they bought several other companies."
David Rosenthal points out Dropbox's history of acquisitions, which indicates their awareness of the need to expand their services.
"I think it's expensive in terms of opportunity, cost of attention."
Ben Gilbert argues that Google's foray into productivity tools was costly in terms of diverting focus from potentially more lucrative ventures.
"It was actually a major distraction from either their core strategy within search or finding another sort of leg of the stool that would be a better fit with their core capabilities as a company versus trying to go down a path that they really weren't equipped to succeed in."
David Rosenthal suggests that Google's focus on productivity tools may have been a strategic misstep, diverting attention from areas where they could have had more success.
"Bill Simmons launched the Ringer... it's totally sports focused, but it's really the kind of crown jewel of the Bill Simmons media empire."
Ben Gilbert introduces The Ringer, a sports-focused media venture by Bill Simmons, as an example of engaging content in the carve out segment.
"I just finally finished, crossed off my reading list, Creativity, Inc... It is fantastic."
David Rosenthal recommends "Creativity, Inc." for its valuable insights into the creative process and management lessons, relating it to startup challenges.
"Crusoe's data centers are nothing but racks and racks of a because Crusoe's cloud is purpose-built for AI and run on wasted, stranded or clean energy, they can provide significantly better performance per dollar than traditional cloud providers."
The hosts discuss Crusoe's specialized AI cloud services and their unique approach to using otherwise wasted energy, offering performance and cost advantages.
"Crusoe, of course, locates their data centers at stranded energy sites... and uses that power that would otherwise be wasted to run your AI workloads instead."
The environmental impact and cost-saving measures of Crusoe's data center locations are highlighted as key differentiators from other cloud providers.
"Listeners will leave you here. Thanks for tuning in this week. Visit us on iTunes, write a review if you like the show, tell your friends and see you next time."
The hosts conclude the episode by thanking the listeners, inviting them to leave reviews, and encouraging them to share the podcast with others.