Google is billing today's acquisition of Postini as a coup that will bring security to its enterprise Apps offerings, thus attracting a whole new set of potential customers.
But make no mistake, this deal was really all about one thing: Microsoft.
Google and Microsoft have been exchanging punches for some time now
as they compete in the services and software market.
We should have known the rivalry would have legs, when around 2000, if you Googled "More evil than Satan himself," the Microsoft home page appeared as the top result.
A few years later, Google raised the possibility of producing its own web browser.
The two recently vied for the right to buy online ad company DoubleClick. (Google, ultimately, won for $3.1 billion. Now Google is being investigated for possible anti-trust violations). Then, rumors arose
that Microsoft was planning to purchase Yahoo in hopes of stemming Google's market dominance.
And today, Google makes the next chess move by snatching Postini. Google, it appears, is trying get on-demand Google Apps accepted throughout the enterprise as a more-than-adequate alternative to Office, Microsoft's licensed desktop software.
Both Google and Microsoft clearly have staying power, but it appears Google (with its software-as-a-service model) is leading the innovation race. With that said, it will be difficult for Google to overthrow Microsoft's established business dominance.
From a New York Times
story last year: "How far Google can eat into Microsoft's software franchise is uncertain. But Microsoft fears that Google could become a kind of operating system of the internet in the same way that Windows is the dominant operating system of personal computing."
Any way you slice it, neither company should be shaking in their boots, so we should be in store for some juicy conflicts to continue.