Microsoft and Google, and innovation: compare and contrast

A comparison between Microsoft and Google’s quarterly results leaves few doubts as to which is benefiting most from the innovation of the moment, generative algorithms.

While Microsoft has increased its turnover 13% and profits by 27% year-on-year, consolidating the growth of its cloud computing business, Azure, thanks to features using generative algorithms, Google has been caught on the back foot, in purely reactive and defensive mood, and can only watch as Google Cloud fails to gain traction, contributing to lower earnings than the analysts expected and its share price to fall by almost 6%.

Quarterly results may be an imperfect yardstick, but they do indicate the market’s perception of what companies are doing with their business. Microsoft’s immediate reaction, taking advantage of the fact that it has had OpenAI living on its cloud for several years, closed a quick deal to incorporate products such as ChatGPT or Dall-E into the company’s product family, an approach that seems to have worked much better than Google’s efforts to demonstrate that it had the right technologies to be able to compete with it.