Google I/O 2015 – Elephant dodging

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Without distribution Google’s innovations have negative value.

• Google launched a whole raft of new innovations at its 2015 I/O developer conference but omitted to address the elephant in the room.
• I am referring to Google’s inability to control the distribution of its Android software.
• This problem is so severe that in my opinion Google’s innovations are helping its competitors more than it helps itself.
• Top 3 innovations up for grabs this year are:
  • Now on Tap is the ability to do a Google Now search from anywhere on the device including third party apps.
  • This is a stroke of genius as it greatly enhances Google’s ability to see what users are doing in Digital Life services it does not own.
  • More data more relevance and therefore better ad prices.
  • Storage. Google has moved to unlimited free storage for photos and videos which will put pressure on Apple’s charging structure for iCloud.
  • Doze is a smart power management feature that detects when the device is not being used and powers everything down to save battery.
  • This will also include innovations aimed at faster battery charging and more efficient power management.
• The extent of the software distribution is tracked by Google itself (see here) which shows that 1 year after Lollipop (Android 5.0) was launched, less than 10% of all Google devices are running it.
• When one includes the non-Google devices, RFM research estimates that only 4.1% of all Android handsets are running the latest version.
• The vast majority are still running on Jelly Bean or KitKat which contain none of the innovations that Google launched with much fanfare a year ago.
• Consequently, unless something changes, I do not expect to see the innovations launched yesterday to make into the hands of most users before 2017E or 2018E.
• This is disastrous because Google badly needs to improve the user experience to compete against iOS and to keep competition at bay.
• Effectively Google is allowing competitors to access to its best innovations 2-3 years before it can hope to have them meaningfully in the market.
• This gives them ample opportunity to copy these innovations and get them into the market long before Google can.
• Google is enabling its competitors and it seems unable to do anything about it.
• This is because Google at heart is a server software company and in servers when one updates the software every user is instantly migrated to the new version.
• Devices are completely different and old versions tend to hang around for far longer than anyone could possibly imagine.
• The result has been endemic software fragmentation and an inability to bring its innovations to market in a timely fashion.
• Until Google moves to take greater control of software distribution, the user experience will continue to suffer leaving the door open for Microsoft and other competing ecosystems.
• Microsoft remains my top choice and I would like Google even more if it would do something about fixing this problem.