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Acquired

Writely (Google Docs)

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Key takeaways

  • Google’s acquisitions in the mid-2000s rapidly created a cloud productivity suite, but it didn't replace Microsoft as the dominant player.
  • Google's move into productivity was likely a strategic experiment, driven by a desire to find a new revenue source beyond advertising, but it remained a smaller, self-sustaining business.
  • Microsoft’s success with Office 365 and continuous improvements in cloud-based applications demonstrate the importance of focus and execution in enterprise software.
  • The cloud stack market is complex, with Amazon leading in infrastructure, Microsoft in SaaS, and Google still playing catch-up.
  • Google's strategy to build all layers of the cloud may have overstretched its resources, exemplifying the challenges of diversifying from ad-based business models.
  • Enterprise adoption of Google Apps has stagnated compared to Microsoft's resurgence, illustrating the competitive dynamics in enterprise software.

Summary

The Cloud Productivity Evolution and Google's Acquisition Strategy

This section discusses the origins and evolution of Google’s productivity tools, starting with the acquisition of the company rightly, which built early cloud-based collaborative document editing technologies. Founders Sam Chalasse, Claudia Carpenter, and Steve Newman joined Google after the acquisition. The discussion highlights how Google quickly acquired multiple companies in this space—such as TwoWeb, Tonic Systems, and Zentr—and rapidly launched the suite of Google Docs, Sheets, and Slides, effectively creating a full cloud-based productivity suite meant to compete with Microsoft Office. The speakers analyze whether Google’s rapid acquisition-driven approach was a strategic move to preempt Microsoft or a sideline in their broader business portfolio, emphasizing how Google’s primary monetization remains its advertising business rather than cloud productivity. They also reflect on how Google’s low-end disruption in collaboration tools has not uprooted the incumbent giants, as expected, revealing a more nuanced battle between legacy players and new entrants.

Acquisition Category and Business Strategy

This section categorizes the acquisitions as primarily technology and people-driven, focusing on experimental Ajax app developers who pioneered collaborative and web-based productivity tools in the mid-2000s. It emphasizes Google’s buy-versus-build approach, where acquiring these startups was seen as a faster path to market. The speakers debate whether Google had a clear strategy or was experimenting, with thoughts that Google aimed to make productivity a new core business like Microsoft Office or Windows, but without fully succeeding. The conversation weighs whether Google’s focus on cloud-based office tools diverted attention from its core search and advertising strengths, and how Microsoft’s renewed success with Office 365 has challenged Google's position. They reflect on the incentives driving each company, noting that Google's core as an ad-driven business limited its willingness to invest heavily in productivity software.

The Future of Cloud and Productivity Software Strategy

This section considers how the strategy around cloud infrastructure and SaaS offerings has evolved. Amazon’s focus on infrastructure (AWS), Microsoft’s success with cloud applications, and Google’s position are contrasted. The speakers discuss whether companies like Google need to develop all layers of the cloud stack or if they could survive focusing on specific segments such as infrastructure or SaaS. They conclude that Google may have overextended itself by trying to replicate Microsoft’s integrated approach, which might be less aligned with Google's original ad-based model. The discussion also touches on the stagnation in Google’s enterprise adoption of its productivity tools, with Microsoft’s Office and Office 365 gaining significant share, revealing the complex dynamics of enterprise software competition and the importance of focus and core strengths.

Key Takeaways

- Google’s rapid acquisition strategy in the mid-2000s helped it build a cloud-based productivity suite, but it did not displace incumbents entirely. - The company's approach was partly driven by a desire to establish a new core business, but it mostly remained a self-sustaining side operation rather than a dominant revenue generator. - The core battleground for enterprise productivity now is largely between Microsoft and Google, with Microsoft making significant inroads through Office 365. - Cloud infrastructure remains a highly profitable and competitive domain, with Amazon leading, Microsoft expanding, and Google experimenting. - Google’s focus on cloud productivity may have been a distraction from its primary ad-driven mission, illustrating how incentives shape corporate strategy. - Success in enterprise SaaS involves depth and focus, which Google has struggled to achieve in productivity tools compared to Microsoft.

Sponsors

  • Anthropic · Anthropic used to have some older infrastructure monitoring that was in place. But if they're massive scale and complexity, they adapted Century to help them find and fix issues faster. Century helps detect bad hardware, debug issues quickly, and track exceptions across multiple languages. They also have an AI debugger called Seer that root causes complex issues and proposes fixes. Their customers include Anthropic, Cursor, Versatile, Linear, and more. Listeners can try Century with two free months at century.io/acquired, and just tell them Ben and David sent you.
  • ServiceNow · ServiceNow is like the AI operating system for the enterprise. It started 22 years ago with automation, turning paperwork into workflows primarily for IT, and has expanded across departments like HR, finance, and customer service. They connect and power every part of the enterprise, enabling automation at scale. The platform helps manage people, devices, licenses, detect payment failures, and even build AI agents to handle tedious tasks, freeing up humans for strategic work. They've been recognized as one of Fortune's most admired companies and Fast Company's best workplace for innovators.

Show notes

Ben and David continue the cloud productivity saga with Google Docs. They examine the suite of acquisitions made by Google with a focus on Writely in 2006. They tackle:

  • The nuts and bolts of the Upstartle (company behind Writely) acquisition, founded by Sam Schillace, Steve Newman and Claudia Carpenter.
  • SaaS offerings in cloud productivity today.
  • Was this a good idea for Google?
  • Google's future bets.
  • A new section: The Carve Out!

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