"Microsoft, having grown up making money selling traditional software, will have a hard time being successful online, he argues. He thinks Google is unlikely to invest much in enterprise applications, because profit per employee is much lower than in its advertisement-financed consumer business."
I hope for his own good that he's not staking the future of his business on those basic assumptions. If Google and Microsoft were to ramp up their development of online enterprise software (which IMHO will undoubtedly happen), he'll have very little room to maneuver and no time to react.
Google & Microsoft will both do very well, indeed. Even then we will have a decent business if we execute well.
First, we are much smaller, so it takes a lot less to be successful. Second, even in the face of the most successful business on the planet, Intuit and Adobe succeeded well. Third, monopolies are exceptionally rare, and fairly transient - so Microsoft's Windows/Office monopoly is likely to prove to be the exception than the rule, even for Microsoft itself. Linux on the server side, Mac on the client, Firefox/Chrome in browsers ... all point to that.
Dell is an outstanding success, and still only holds somewhere under 20% of the global PC market. That's what I expect to be true in cloud computing.
Bottomline: there are going to be many players with many successful strategies.
I hope for his own good that he's not staking the future of his business on those basic assumptions. If Google and Microsoft were to ramp up their development of online enterprise software (which IMHO will undoubtedly happen), he'll have very little room to maneuver and no time to react.