Jean-Louis Gassée on Cloud 2.0 – post of the month

Jean-Louis Gassée blogs on Monday Note. He’s been doing it since Feb 4, 2008.

Gassée has done many things, but he’s best known for having been Apple’s CEO for a time. These days he’s a VC “general partner”. It’s safe to assume he’s rich beyond my paltry dreams of avarice. Why does he bother writing a not-terribly-famous blog? I don’t think it’s for the adword revenue.

My best guess is that he’s helping out the blog’s co-author, and that he writes for love. Alas for those who write to live, his free stuff is better than the best of the WSJ. Such is the curse of early 21st century journalism.

Today he takes on the Google-Microsoft cloud apps war. It’s fantastic stuff (emphases mine) …

Cloud 2.0 - Monday Note

… Last year, Microsoft’s total sales were $58B, down 3% from 2008 … Note the Operating Profit, 35%. The company spends 15% of its revenue in R&D and 28% in Sales, Marketing and General Administration….

… Compare this to Apple’s 29.5% Operating Profit, 3% R&D, and 9% SG&A [selling, general and administrative expense] with a comparable revenue level, in the $50B to $60B range annually…

… Microsoft’s Net Income is 25% of revenue, Apple’s is 22%….

… Microsoft Office represented 90% of the $19B Business Division sales, with a nice 64% Operating Profit … Roughly 60% of all Microsoft’s profits come from Office and a little more than 53% from Windows OS licenses (or what MS calls its “Client” business):

So… Office + Windows, 60% + 50% = 110% of Microsoft’s Operating Profit? The math is complicated by the losses in something called “Corporate-Level Activity”… …and, more importantly, by the hefty 73% operating loss in the company’s Online Services Business:

If I’m interpreting Gassée’s writing correctly, Apple’s numbers are only comparable to Microsoft’s because Microsoft “wastes” a huge percentage of revenue. Microsoft’s R&D percent spend is 5 times Apple’s and Microsoft spends 3 times as much on selling, general and administrative expense – not to mention “corporate-level activity”. If Microsoft were as stingy as Apple, their profits would be mind-blowing. Microsoft Office is a money-factory.

I’m reminded of an old Cringely column, in which he opined that Microsoft could have any profit number it wanted to have.

Gassée continues from numbers to user experience, saying the same things I’ve whined about but that, honestly, I never see mentioned anywhere else

.. Google Apps aren’t Office killers. I’ve been using Gmail in both the free and paid-for accounts. The basic email functions work well, but managing contacts is awful. (Months ago, I heard Google had an internal project called Contacts Don’t Suck. I’m still waiting.)…

… I’ve tried to use Google Docs to write, share, and edit these Monday Notes. Failure. Compared to any word processor, Google Docs feels clunky and constrained, and hyperlinks die when you download the document…

… Google Apps aren’t “there” yet. They’re still clunky, to say nothing of managing the “stuff behind the desk”. They’ve been quickly upgraded–perhaps too quickly– at the expense of the user experience. If managing Google Apps is as complicated as running an Office DVD install program, an important part of the Google theory falls apart. We see the trumpeted announcements of large organizations and governments that have turned to Google Apps, but what we don’t see is a courageous journalist going back to the proud early adopters a year later to tell us what actually transpired.

So why is it that only cranks like me and outliers like Gassée ever point out where Google fails? It’s a bit hallucinatory. Gmail’s contacts function has been terrible for years (starting with the weirdly isolated link to “contacts” in Gmail). Google Docs are still very weak (though about to move up a notch), and things are worse when you look at the channel confusion around Blogger, Google Doc, Buzz and Google Sites.

Really, I do love a lot about Google, but they have to give up on the idea that good design is emergent.

Go and read his Cloud 2.0 post and the “related columns” he references at the end. Don’t forget to marvel at the strange age we live in, where some of the best journalism is done for love*.

* P.S. As a bone to the pros, Gassée drops a broad hint on how they could write something interesting – go to the early adopters of Google Apps and tell us what happened.