The Challenges Google Needs to Deal With at I/O
We’re now in what’s arguably become the most significant period of the year for three of the largest consumer technology companies in the world — the developer conference season. The developer events for Microsoft, Google, and Apple now end up shaping much of what’s to come from these companies in the next year, from new versions of their operating systems to new products and services and, in some cases, new hardware. We’ve already seen Microsoft’s announcements around Windows 10, HoloLens, and more at Build, and next on the docket is Google’s I/O developer conference. As it approaches, there are three key challenges Google needs to grapple with if it’s to maintain its momentum.
Retaking control of Android
One of the big themes from last year’s I/O was Google’s attempt to retake control of Android. This imperative has, if anything, become more urgent over the past year. The combination of Chinese OEMs building Android devices based on AOSP, Cyanogen mounting a brazen attempt to wrest control of Android from Google (now with Microsoft’s help), and the continuing attempts by both OEMs and wireless carriers to layer their own services on top of Android all mean Google is in danger of losing control over the platform it created. Google doesn’t make money from Android per se – only from using Android as a vehicle to put Google services in front of end users. To the extent the versions of Android end users experience either don’t include Google’s services or promote other services more prominently, Google’s major strategic objective for Android falls flat. Yes, it foiled Microsoft’s (and, in the end, Apple’s) attempts to dominate the smartphone world, but if Android doesn’t serve as an effective vehicle for Google services, it fails in its secondary objective also. Last year’s I/O included several attempts to rectify this situation, including new flavors of Android that allow for very little customization by OEMs (Android Wear, Auto, and TV), and the Android One initiative, designed to replace AOSP versions of Android with stock Android in emerging markets. At this year’s I/O, Google needs to use both carrot and stick to get OEMs to buy into the vision of Android as Google sees it, with Google services intact, while feeding their need to differentiate themselves in meaningful ways in a world where price is becoming the most compelling differentiator for many.
Defending the web against apps
One of Google’s most significant challenges as a company is the shift from a browser-centric desktop internet to an app-centric mobile internet, because its business models are so heavily predicated on web-based advertising. Google has recently sought to defuse speculation that mobile ads are less lucrative for the company than desktop ads, but the reality is Google faces far greater competition in mobile. It also suffers from a lack of good native mobile platforms that can replicate the success of its desktop search dominance. In a world of apps, search is something that happens behind closed doors rather than on the open web and Google has been working for several years to rectify this. The rise of products such as Facebook’s Instant Articles intensify the pressure on Google to find ways to remain relevant in search. At last year’s I/O, Google talked about “app indexing” – allowing search to reach deep inside apps to reach content not traditionally searchable from the web. But it’s heavily dependent on app makers to buy into this vision and, while some smaller ones will, many others will want to protect their content from disintermediation by Google and keep it exclusive to their own apps. As Google still seems determined to use its search graph to surface content without taking you to websites, developers will rightly be skeptical that Google will treat them any better. Google needs to reassure them.
Convince developers Android users are worth targeting
Last year, Google shared numbers of both the total number of Android users (over a billion) and the amount paid to developers over the previous year ($5 billion). While both numbers are impressive on their face, they combine to give the impression of a platform which delivers only relatively small spending per user and which is likely to skew increasingly to the low end of the global market as premium users switch to iPhones and new users come in at the bottom end in markets with much lower disposable incomes and poor payment options. Google badly needs to convince its developers it’s worth developing for Android first or at least in tandem with iOS. But, as long as the monetization options on Google Play are poorer than those on iOS, this will be a tough sell. Google needs to ramp up its work with mobile operators to offer carrier billing more broadly on a global basis, especially in markets with low payment card penetration. But it also needs to talk up the profiles of Android users in mature markets and help developers find more diverse ways to monetize their usage through more than just advertising.
Take Android beyond personal computing devices
To date, Android has been designed largely with smartphones in mind, with tablets an important secondary form factor, and recent versions for TVs and wearables added to the mix. But many companies have used Android over the years for things it was never intended for, from meeting room displays, appliances, Internet of Things deployments, and others. Android is free and flexible, but it’s not optimized for these use cases. With Android Auto, Google has created an Android overlay for the car, but it’s still not an option for the car OS itself. One of the things Google should be doing and communicating about at I/O, is creating optimized versions of Android for things other than personal computing devices (tablets, smartphones, wearables, and so on). Optimizing Android for these other environments will make Android attractive for more than just its price and flexibility. But this means making Android a far more reliable platform in some of these environments too – industrial, automotive, and other settings have far lower tolerance for faults and bugs than smartphones do. I think we might well see car support specifically as part of the M release of Android, but Google should go far broader.
Demonstrate a clear value proposition in TV
At last year’s I/O, Google showed off Android TV, the latest in a series of unsuccessful efforts to participate in the TV space. Though it promised broad support from some OEMs, and some products have indeed shipped, Android TV as a platform remains a tough sell to consumers. What does an Android-TV-based television do uniquely well? As Sony, Apple, and others work on providing TV services which can be tied to their TV-connected boxes, how does Google play in this arena? If Google wants to make its TV offering more compelling, it needs to create a TV service as the headline attraction. Unlike Apple and Sony, Google is uniquely well-positioned to use tracking and targeting to provide advertisers with the insights they want when going after TV subscribers, and will have few of the qualms that make Apple’s entry into the TV space challenging.
Continue to unify Android and Chrome OS
Some time ago, Google put both the Android and Chrome (and Chrome OS) products under Sundar Pichai, and the hope since has been he would start to bring the two together. Android is by far the more adopted and flexible of the two and so it’s always seemed, in some ways, the logical choice for unifying developer platforms across devices. But all the signals in the past couple of years suggest Chrome OS is here to stay. At last year’s I/O, Google showed off the potential for Android apps to run on Chrome OS, although relatively little has happened with this effort since and it remains more of a test than a fully-fledged, large scale effort. Google needs to start providing a clearer roadmap for how these two separate platforms will come together over time. Will Chrome OS continue to exist as a separate entity, with the Chrome browser becoming more powerful as its own platform on Android devices? Or will Google eventually extend Android to the laptop world too?
Differentiate against Amazon and Microsoft in the cloud
As principally a consumer technology analyst, I’m less focused on Google’s cloud initiatives, but they took an important role at I/O last year and are a major part of both Microsoft and Google’s overall offerings for developers. Apple’s approach to cloud services is focused exclusively on its own platforms, with offerings like CloudKit, but both Google and Microsoft compete head-on with Amazon in the broader cloud computing space. As the basic offerings become commoditized and prices continue to drop, it becomes increasingly important for cloud providers to move up the stack into more differentiated services. Amazon is attempting this by moving into the productivity sphere, but I think it’ll be challenged there. Microsoft already has a more diverse set of cloud offerings, including Office 365. But Google hasn’t yet defined its unique differentiators well in this space, and needs to begin to articulate these more clearly.
These won’t all be solved at I/O
Needless to say, this is a long to do list and not all of this can be solved at one developer conference. But Google at least needs to demonstrate it understands these challenges and is planning to deal with them. We should see at least basic attempts to address many of these challenges during I/O. If we don’t, it’s a sign Google underestimates the challenges it’s facing.