Why Google is Going Where It Never Wanted To

If Google was a person, it would be the computer geek that prefers staying home to going outdoors. After all, it managed to build world-class products such as Search, Gmail, and Maps, without having to leave the basement to speak with OEMs or retailers. Google was able to achieve this due to the open web, where its services thrived regardless of whether you used Internet Explorer on Windows, Safari on Mac, Opera, or Chrome.

But Apple nudged Google out of the basement when it kicked off the mobile era with the iPhone. Google responded by developing its earlier Android acquisition in 2005 into the world's premier open mobile OS, and was still able to thrive on Apple's iOS thanks to reputation of their already dominant services. Out of necessity, Google started to work with OEMs to ensure that Android was widely used, keeping Google relevant in the mobile era.

Sundar Pichai opened last week's Google Event by referencing the “shift from a mobile-first to an AI-first world”. But this seemed more like a wishful vision that would mainly favor Google, which outclasses every other technology giant in developing new, innovative algorithms, including AI. Yet, the real message of the event was hardware.

But why hardware? If Amazon's Echo, Microsoft's Surface, and Apple's existing device line-up mark a new era of fierce competition, why should Google play in this "red ocean"? Since the move away from a multi-platform compatible world, Google has not yet developed another winner-take-all product or service, as it may hope to with Assistant. In part, this has something to do with the fact that all of these players realize that owning the device allows them to own the channel. Whether Google likes it or not, it feels that it needs to buy its ticket to participate, or risk fading into obsolescence. Thus, Google has now truly left the basement, spending the last couple of years massively expanding its hardware team, from engineering to retail, at a global scale.

Google is unmatched at building great software with a virtuous cycle of superior data and algorithms. But even if Google has the best software product or service, it may not be allowed to win without the help of their own well-penetrated suite of devices.