In many of the battles fought by Microsoft and Google, Microsoft is the market share leader and is simply attempting to avoid losing users to the upstart Google. That is not the case in the smartphone arena. Google's Android has become one of the three major platforms in the United States, along with the iPhone and BlackBerry. Three hundred thoughsand new Android phones are being activated every day, better than Apple's iPhone.
Microsoft has completely revamped its mobile platform with Windows Phone 7, but it still has to convince consumers to buy the phones. So far, Microsoft isn't saying how many have been sold. The pressure is on: Microsoft's board of directors complained about "loss of market share in the company's mobile phone business" when it decided not to award CEO Steve Ballmer the full bonus he was eligible for.
While Microsoft has struggled in the mobile world, it still dominates the e-mail and productivity software market with Microsoft Office in much the same way Windows dominates the desktop OS market.
But Google is coming on strong with Google Apps, a cloud-based set of productivity tools including Gmail and Google Docs. Google claims to have signed up more than 3 million businesses, but Gartner estimates that Gmail has captured less than 1% of the enterprise e-mail market.
Battle for the cloud
Despite Google's lack of market share, the company's innovations have forced Microsoft to greatly expand its cloud-based offerings. Microsoft is fighting against numerous competitors on the cloud front, including Amazon's EC2, which Microsoft counters with Windows Azure. The threat from Google Apps is one reason Microsoft is overhauling the cloud-based versions of Office, Exchange and SharePoint with Office 365, which is available in beta and will see a broader release next year.