The Spiral Framework

The spiral model is first introduced in 1986 by Berry Boehm to illustrate the iterative development in software development. Throughout this research, we identified four major reasons on which drive to Google’s success. We illustrate these four factors in a spiral framework:

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Figure 32: The Spiral Framework of Google. Source from the author.

The spiral framework can be also illustrated along with the Google Key milestone figure which is in Chapter 2.

5.1.1. The Most Inner Spiral

This spiral demonstrates the products launched in the initial stage and advertising stage. Let’s look the center part of the spiral framework starting from “Platform.”

Google initiate its first product – the Google search engine website famous with its simple, clear, and easy-to-use user interface, by the PageRank “Technology”

giving the fast, accurate, free and relevant search result which win the most “User Experience”. Due to its search engine is free to use, Google believes the philosophy of “focus on the user and all else will follow.” In this stage, Google did not earn its revenue from search engine; however, it did build up its good reputation of the search engine and attract more and more users to adopt Google Search Engine as their primary search tool. This User Attraction Strategy establishes its innovative business model – “all else will follow,” it is true that later its business model generated more than $28 billion dollars last fiscal year (2010) for Google, which turns Google to be the biggest advertisement company in the world.

The spiral framework turns back to “Platform.” The platform we just mention in the last paragraph was Google search engine website. Now the platform is in between Google search engine website and the affiliated websites. Google found a way to monetize from the search results then it came out with AdWords keyword advertising “Technology” in which Google redefined online advertising to keyword advertising with its “Innovative Business Model” – pay by click not pay by exhibition. At that time, Google was the first search engine to profit off of keyword advertising. Businesses use its AdWords program to promote their products and services.

The spiral framework turns back to “Platform.” Google tried to expand its platform to affiliated websites to increase the opportunity that its advertiser’s advertisement can be seen effectively not just see and ignore. Google launched Adsense

“Technology” to let the web publishers to include the advertisement enrolled in the Adsense program into their own website. Both Adwords and Adsense give the relevance user experience. It looks simple but it works effectively that it captures the relevance between the search keyword and the advertisement in terms of reducing the intentional disregard of advertising. Google’s success attributed to

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innovative business strategy – create innovative service to attract users, advertisers and publishers then follow.

5.1.2. The Second Inner Spiral

This spiral demonstrates the products launched in the Diversified Stage and Audio &

Video Services Stage. The previous spiral framework demonstrates the search and advertising platform. Here “Platform” moves to the content and services. Google’s Blogger “Technology” is like other Google services with free and simple to use user experience. The business model is as AdSense which includes the advertisement into the blogger’s website. Moreover, it offers displaying advertisement in RSS feeds. The business model for Blogger is based on the

“crowdsourcing” concept to attract user and also its relevant advertisement on the blog which attracts people from the blog content to click on the advertisement that they are really interested in. account holder will never have to delete messages. Besides the free and simple user interface user experience, it also provides more storage and less spam mail. The business model for Gmail follows the Google search engine model which provides outstanding and stable service with no charge for the user. Google monetizes Gmail from its Adwords advertising coming along with mail service.

The other product within this period is YouTube. YouTube is a video-sharing website which is free to the users but it requires users to register to upload video. Besides the business model - to bring the masses together and generate revenue through advertising, the rests are the same as Gmail. Although the business model for YouTube is still advertising, it also contains the concept of crowdsourcing. The website attracts the users to linger on its website not also due to its free service and the ability to share video with friends who are on the internet but also due to it containing the influencing user comment for each video. This is not surprising that Google did the acquisition of YouTube – they are sharing the same philosophy of

“focus on the user and remains free and open.”

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However, YouTube is facing some criticism: the copyright issue. YouTube prohibits the uploading of any copyrighted material, but it does not pro-actively enforce it. If a piece material is reported to be copyrighted, YouTube will remove it. Until now, those copyrighted companies have not yet taken any action for those video infringement issues maybe it is due to its marketing strategy – free broadcast to the audience without paying any commercial fee to those public channels and YouTube becoming its free marketing platform to promote its video or music.

5.1.3. The Most Outer Spiral

This spiral demonstrates the products launched in the Mobile and Cloud Computing Stage. Here we first demonstrate the spiral for the mobile platform. Google has developed its mobile operating system, Android. It tried to expand its advertising enterprise in the broadband for PC and laptop into the one in the mobile devices. By its Android “technology”, it claims it still follows its ideology of “free and open”

user experience. The business model for this stage is more than just the online advertising. It was surprising that Google entered the embedded OS (operating system) battle since it relies on neither hardware nor software as its main revenue stream. The current Google biggest competitor in the mobile phone OS is Apple iOS;

however, Apple’s main revenue stream was hardware and software which is interwoven with a content ecosystem (such as music, applications, and books).

Recently Apple crosses into the advertising sector, iAd Gallery, the in-App advertising. Android business model threatens Apple in smartphone market by comparing to Google’s open and partner strategy – Google doesn’t involved in its hardware production but relies on its OEMs for its Mobile phones and counts on the device manufacturers to use Android system and Apple’s closed strategy – it engineers much in its software and hardware which it buys the components from it OEMs and it does its software and hardware integration that originally expect to win more user experience however it limits the growth of Apple’s platform. On the other hand, Google open and partner strategy helps its Android market grow impressively and become the mobile platform leader.

The spiral is back to the platform, the cloud computing platform. Google launched Google Apps and Google AppEngine technology for its SaaS (Software as a Service) and PaaS (Platform as a Service) sectors. Google Apps includes Gmail, Google Calendar, Google Docs, Google Talk, and Google Pages that someone would say the Google Apps is aiming at the individual user or small and medium enterprise such as the 10-employee company to provide free or low cost web based software. Recently,

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more and more big companies not just small or medium enterprises start to think about moving from Microsoft Office suite to Google Apps such as Procter & Gamble (P&G) and General Electric (GE). Reacting to the cloud solution Google provided, Microsoft launched its cloud office product called Office 365. However, Google leaves a better user experience which put itself to an unbeatable position:

 Price. Google offers a straight-forward pricing scheme: $50/user/year. With this $50, users receive everything they need to operate within the Google platform. In contrast, although Microsoft least expensive option in Office 365 is

$6/user/mo, and this baseline subscription is only available to businesses fewer than 50 people. Furthermore, this subscription at $6/user/mo. does not include many platform essentials such as Office Web apps.

 Extensibility. Due to Google’s “open” philosophy, Google’s commitment to standards-based protocols, open data formats, and world-class security allows the Google Apps Marketplace to provide hundreds of integrated applications.

On the other hand, Microsoft still believes its close strategy. Its so-called cloud products still need to be integrated with its other traditional products due to its legacy client-server technology, third-party or other internal applications cannot be securely integrated.

The business model Google adopted here is the Freemium model which offers product or service with free of charge but charging a premium for advanced features or functionality. The biggest issue for the Freemium model is how to convert free users to paid subscriptions. Indeed, Google Apps currently contributes less than 1%

of the revenue but it does has high potentials to attract more paid user such as bundling Apps with its growing library of mobile business apps for the Android smartphone operating system which beats Microsoft Office 360’s inability to scale up to any portable devices, it only working for desktop window system. Integrating Google Apps together with the Android app ecosystem could give Google a tremendous advantage above Microsoft and Apple. Despite the fact that Microsoft dominates the PC software and enterprise market, it only provides a few mobile apps. And although Apple dominates the mobile app market, it offers little presence in the enterprise space. Google complements the above issue by its Google Apps differentiating and positioning the market offering.