The Coming Apple-Google Death Match

Beyond the Cloud

January 7, 2011

Russell Fish


The battle for the future of the computer business will not be between INTEL and AMD or HP and Dell it will be between Apple and Google. Both of these giants aim to subsume all aspects of computing and communicating.  It's tempting to predict an eventual duopoly with the world split between the two.  However, Steve doesn't do sharing, so expect some pretty severe commercial combat.


What's At Stake:

Cloud computing servers

Cloud computing services

Internet Television

Wired Internet


Wireless Internet

Wireless Voice

Small handheld wireless communicating devices (cell phones)

Large handheld wireless communicating devices (tablets)

Operating Systems

CPU chips


How The Combatants Size Up:




Cloud Servers  

Just completed 500k ft data center in North Carolina;  Expansion is already planned on 75 adjacent acres

36 data centers (19 in the US)

Cloud Services


GMail, Google Apps, and many, many others

Internet Television

Apple TV, recently upgraded to A4, price reduced to $99

Google TV, INTEL Atom based $299


Steve is largest Disney shareholder, iTunes store, various content partnerships

Various content partnerships

Wired Internet


Dark fiber for 500k households




Wireless Internet


C Block open access

Small Devices


Android phones, HTC and others

Large Devices


Cr-48 cloudbook (prototypes)

Operating Systems


Android, Chrome

CPU chips

A4, legacy x86

Various ARM chips, legacy x86


Who Doesn't Stand a Chance or Who Has Bit Parts

World domination at this level not only takes seriously deep pockets but a clear strategic vision and broad skill set. 


Several companies have the deep pockets but probably will not seriously challenge the two leaders.


HP - They have $10B in cash and are the largest computer company in the world.  If they only had somebody in charge who could see the future.  Mark Hurd was an efficiency expert and cost cutter.  Under his leadership HP overtook IBM for the top computer spot.  However nobody every accused him of being a visionary. 


The new CEO, Léo Apotheker, was eased out at SAP, hardly a hotbed of visionaries.  He was trained as an economist.  Ask him which way the stock market will go or to predict next year's price of gold.  Just don't ask him to see the computer industry's future or come up with a strategy to keep Steve's iPad from gutting HP's notebook business.  HP will sell some cloud plumbing.


IBM - They also have about $10B in cash.  The original mainframe computer monopoly is now growing in software and services, its days of pounding out innovation probably behind it.  The CEO has a degree in history and played backup sax for the Temptations.  They've made some cloud acquisitions such as Cast Iron Systems and they offer virtualization via Smart Business Desktop.  They will probably sell or service some of the cloud plumbing. Today's IBM looks more like a reliable dividend paying utility, a good solid company. 


Dell - Just like IBM, they too have about $10B in cash.  In fact, they are like a smaller version of IBM.  When Michael chose to step down in 2004, the company lost direction and momentum from which it has never recovered, even after his return.  As Dell's original direct selling model reached maturity, like IBM they chose to diversify into services.  HP bought Ross Perot's old mainframe service company EDS, so a year later Dell bought his next company Perot Systems.  Diversification through acquisition is great way to maintain financial stability.  They recently acquired cloud integrator Boomi.  Dell will probably do some cloud plumbing.


Microsoft - They have $8B in cash.  They would have more but they made massive stock repurchases and are one of the few tech companies paying a dividend.  High tech companies often falter when the visionary founder moves on or gets moved out.  Bill Gates was the visionary who apparently lived his professional career in awe of Steve Jobs brilliance.  Despite plodding operating systems, feature clogged applications, and borrowed ideas he built the behemoth that is Microsoft. 


His 1995 "Internet Tidal Wave" memo without question saved the company and bought another 15 years of dominance.  Marriage, kids, 30 years in the same position, and billions in wealth dulled the competitive fires, but not before he possibly chose his successor as corporate visionary, Ray Ozzie.  Ozzie is best known as the creator of Lotus Notes.


Ozzie may not have been a nuts and bolts manager.  He may not have been a people person.  He may not have possessed corporate gun fighting skills.  However, it was difficult to fault his understanding of the current industry and his insight into its future.  From his swan song memo explaining the coming post-PC world and the movement of software into the Cloud:


"Complexity kills. Complexity sucks the life out of users, developers and IT.  Complexity makes products difficult to plan, build, test and use.  Complexity introduces security challenges.  Complexity causes administrator frustration."


But Ozzie is now gone.  Microsoft Azure is an orphan.  Balmer has the helm... another economist.


An Outlier That Might Make a Run

There is one company that has a chance, albeit an outside chance, of challenging Google and Apple.  That company is Oracle. 


Critics accuse Larry of not understanding the Cloud.  They forget Larry was a Cloud enthusiast before it was called the Cloud.  Ten years ago he had a little thing called the New Internet Computer - NIC.  This stripped down computer didn't even have a hard drive.  It booted off the CD.  All of its storage and much of its intelligence lived on Internet connected Oracle servers in what we would today call "The Cloud". 


Back then loading your data at 56k dialup speed was sort of like loading your TRS80 Model I from cassette tape.  It sucked.  The NIC sucked, but the underlying idea was a good one, just a little ahead of its time.


Larry has $10B in cash and another $14B in marketable securities and describes his view of the computer world as "The Big Red Stack".  To reward himself for winning the America's Cup he bought his very own CPU company, Sun Microsystems, another really early Cloud proponent.  Remember John Gage said sometime in the mid 80s, "The network is the computer." 


Larry has more Cloud pieces than HP or IBM and doesn't have to worry about who's in charge.  He is. 


The Impact of TOMI™ Technology on the Cloud

The Cloud can be thought of as big computers networked to little computers.  The big Cloud servers warehouse the data and run the apps.  The little computers retrieve the data and present it.


Cloud server economy is determined by the amount of computing performed per joule of energy.  According to Microprocessor Report,


"Venray's prototype can deliver 4.6X the bandwidth of Intel's best server processor (Gulftown Xeon) despite using 10-year-old DRAM technology."


The Xeon is spec'd at 130watts TDP for six cores.  Venray's TOMI™ Aurora is spec'd at 23mw per core.  Power costs lots of money.  Do the math.


The little computer of choice will most likely be a tablet, such as the iPad.  A key differentiating feature of the iPad is its 10 hour operating time between charges, in large part due to the energy sipping A4 CPU.  The A4's specifications have not been made public, but from an analysis of the LCD backlight and other components the A4 power consumption can be inferred to be about 800mw.


Based on power advantage alone TOMI™ Technology offers a competing company a fighting chance against Apple, or it offers Apple domination of the computer industry for the next two decades.