Google’s Android Problem and the Opportunity for Microsoft

By Jim Lundy

Mobile World Congress was the talk of Twitter this week, as the annual event in Barcelona featured lots of announcements including ones from major hardware providers, such as Lenovo, Huawei and Samsung. Microsoft also made noise with Windows Phone 8.1. The biggest thing we observed however is the fact that Google appears to be ok with letting Android become a fractured Mobile Operating System. This post is about the Forking of Android and the opportunity it represents for Microsoft.

Samsung Knox and the Forking of Google Android

One of those announcements was from Samsung which is trumpeting its new Samsung Knox 2.0 platform, which is a secure layer of software and now firmware that rides on top of Google Android. To us, this sends a clear message. If there were problems with Android before, now we have an all out forking of the OS (forking refers to a scenario where there are multiple or custom versions of an application or in this case, an operating system). For enterprises, having to support multiple versions of anything isn’t good. For consumers, a forked OS most likely means that the probability of getting an upgrade on your device during your contract is much lower (often due to complexities with multiple layers of software).

Samsung is partnering with Good Technology, and others, to make Samsung Knox 2.0 containerization happen. This is where we think problems get bigger for Google. To us, Samsung Knox represents a true forking of Android. While the point of this post is not about Samsung and whether Samsung Knox 2.0 will succeed or fail (1.0 never succeeded), it really points right back at Google and their strategy for Android (note, we are reserving full analysis on Knox until we actually see something that ships).

Google – Monetizing Mobile Search or Disrupting Competitors

Google is an interesting company. If we step way back into the past, Eric Schmidt used to be on the board of Apple. Google made moves in 2005 to jump in and become a fast follower on Mobile. That said, our take is that their strategy has always been about Mobile advertising. It does not appear to us that Google is all about providing the best Mobile Operating System. In our opinion, Google wants to disrupt other mobile competitors and gain a foothold for their cash cow product Search. This is a key difference in an approach to a market that you will be hearing more about from us. If Google’s true strategy  in Mobile is to just monetize search, it will make enterprises look at Google differently and clearly far less strategically from a mobile perspective.

Microsoft – The Opportunity in Mobile

Microsoft, which we point out in our Strategic Report for Mobile, was the original pioneer of a mobile operating system, is working very hard to be the third choice when it comes to mobile. Our take is that Google is now making it far easier for an enterprise to make a Microsoft Mobile decision.

As many know Microsoft bought Nokia’s phone business last year (see our First Cut). This week at Mobile World Congress, #MWC14, Microsoft hinted at lots that is coming in Windows Phone 8.1 One thing we can say about Microsoft, is that despite all their issues, they do know Operating Systems and they have been working hard to make them easier to use.

Enterprises depend on Microsoft on the desktop, the question is – will they learn to count on them for Mobile.  We are not saying that Windows Phone is a winner, but in the enterprise, where increasingly Tablets will become important devices, Microsoft has a new opportunity if they can deliver a compelling set of products.  Given Google’s position on Android, they just made it a lot easier for Microsoft to be a long term winner in Mobile.