When I first read that Google, the company that seems to know everything about us, was swooping in to acquire Nest, the company that strives to make home automation a cinch, for a hefty $3.2 billion, it wasn’t the money that left me stunned, the amount is now only a sixth of what Facebook recently splurged; it was something else.

A company which began operating out of a garage 15 years ago, with a humble search engine as its only offering, has suddenly become the epicentre of our digital universe. Even before I could realise, Search was omnipresent, Chrome was my gateway to the web, Gmail was my go-to email service, YouTube was called upon to catch up on missed episodes, Maps was summoned every time I stepped into an unknown territory, Drive was backing up my photos as soon as I clicked them, and my brilliant Nexus 5 simply became an extension of myself.

Google had taken over, even before I could press pause.

The search giant has infiltrated almost every sphere of our digital interaction and made the experience richer, more satisfying and rather beautiful. Their suite of services simply feels all-encompassing, with your Google ID being the key to a thousand doors. There are many big-name brands which often try to achieve this, but either their endeavour feels too intrusive or they just fail without a whimper.

This one though, this particular one, seems to be nailing it.

Why the Nest acquisition seems like a watershed event is because of the avenue Google is trying to open up — this is not your game-changing smartphone app, or an eye-popping web service, but a solid tangible product that Google aims to weave into its ecosystem. It’s their first foray into something so different from their core services, something which is popularly and rather pompously called the Internet of Things. Yes, you could almost hear the cacophony around the term settle down as soon as this acquisition was made, and another multi-billion dollar industry was born.

And with this, Google one upped all its rivals, all in one fell swoop.

Offhand, it’s rash to say that Google is winning the race. To better discern the tussle within the Valley, many files need to be decoded.

Stuck in 1 Infinite Loop

The address of Apple’s headquarters seems to typify its dilemma somewhat accurately. To begin with, they have vehemently refused to liberalise its notorious iTunes software, sadly our only (legal) way to get data flowing to and from an iOS device. Only the other day I had to restore my iPad to its original state and trusted iTunes to run the errand for me. I use the word “trusted” because I was not trying to attempt something which Apple throttles me to. After wasting a lot of time and a handful of bandwidth, iTunes refused to install the software package it had downloaded — iOS 6.1.3. It was only later that I realised that Apple had a peculiar penchant for not allowing even a slightly outmoded version of iTunes to download their latest version of iOS — iOS 7 in this case. And since Apple’s servers are hardcoded to prevent anyone from legally installing any other OS than their newest one, their trusted lieutenant iTunes was denied permission to install it on my iPad.

Ingenious. Shrewd. Dumb.

For all their attention to detail and obsession with precision crafted products, all Apple could have done is have iTunes give me a short staccato message asking for an update in order to restore my iPad. Simple.

But iTunes is only a small part of the argument. If a company is making more money than the whole of Microsoft from only one of their products, it must be doing something right.

The iPhone. It enjoys an exalted status among the sea of smartphones, maybe because it started the juggernaut, and warrants a beefy study of its own.

When Steve Jobs asked his engineers to design a phone which doesn’t require physical buttons to receive & end calls, they didn’t know what had hit them. But it was precisely this level of brilliance & skill which Jobs demanded that gave birth to one of the most iconic devices in world history, a cult classic. On June 29 2007, Apple effectively blew every phone manufacturer’s socks off & left consumers in awe. The media went as far as calling it the ‘Jesus phone’. It is conjectured that Android, now the world’s most used smartphone OS, is said to have been tweaked generously following the iPhones’ announcement.

It’s not difficult to see why. A touchscreen which renounced styli, pinch to zoom, flick to scroll; it was almost bewildering why such beautifully simple innovations ever evaded the developers’ mind. Suddenly, the competition’s best offerings looked like a tribute to a bygone era. Apple had done to the smartphone what they had accomplished with the MP3 player. They had changed the game yet again. Everyone wanted an iPhone.

But seven years, half a billion iPhones and the sad demise of a CEO later, Apple is, let’s admit it, starting to look jaded. It’s almost like that venerated magician who seems to have run out of tricks & keeps running the same show to please gullible children.

It’s easy to say that a new iPhone still generates the kind of hysteria which any other phone could only dream of. But truth to be told, even if Apple sat on its haunches & re-branded the iPhone 5s as the iPhone 6 this fall, it would still sell in the same, if not better numbers.

The company which took the world by storm with its revolutionary iPhone 4 has sadly skimped on true innovation ever since. We had expected iPhone 4S to be as groundbreaking as its predecessor. Much to our chagrin though, 4S suffered first from a rejigged launch cycle & second, from the absence of anything even remotely breathtaking. Admit it, Siri is a fizzled firework.

Apple’s creation seemed all the more uninspiring when only a few months ago, Samsung had launched the Galaxy SII, a widely acclaimed device which heralded the onslaught of Android.

Jobs departed only a couple of days after the 4S was unveiled. Amid the torrent of due encomiums, it was secretly rumoured that he was in fact working on the iPhone 5, and that the 4S was always supposed to be a minor update. “Great” I thought, dismissing the 4S as a mere aberration in Apple’s glorious pedigree of devices.

Longer screen, slimmer profile, chamfered edges: iPhone 5 — ageing wine in a shiny new bottle.

The sheen had come off, and the Apple’s magnum opus had slipped from being the industry’s gold standard to something that was more in demand for the bitten fruit seared on its back.

With the iPhone 5c, Apple employed what seems like one of their more devious marketing moves — Pulling the plug on a classier ex flagship and sneaking in a plastic toy in its place only to make the current, more expensive flagship look more covetous. Whatever happened to creating a groundbreaking product and letting it speak for itself.

Don’t get me wrong — I am a huge fan of their iMacs and Macbooks and the gorgeous new Mac Pro. I think OS X is still the desktop OS to beat. And with the iPad mini, they’ve nailed the mini tablet like it’s the best thing since sliced bread. I wish, alas, that I could say the same about iOS7 as well. It’s full of bugs, the animations are choppy, the gradients are whacked out and it looks like it’s been designed keeping the kitschy iPhone 5c in mind. It’s funny, almost cartoonish.

But again, Apple sells. It sells its wares in huge numbers, like HUGE. The iMac recently completed 30 years and Apple did their best to cash in on the occasion. Financially at least, things were looking skywards.

Investors were expecting outstanding returns from Apple’s Q4 2013 sales. They were left disappointed, once again; and their stock dipped once again, and once again Tim Cook came out and proclaimed that they have some great stuff lined up for the year. Good old rhetoric.

Some argue that Apple is paying the price for their “walled-garden” approach, while others quip that Apple’s mojo departed with Jobs. I just think that they’ve been averse to taking risks while the competition has leapfrogged way ahead.

Their loyalists might call it an Apples to Oranges comparison; eerily though, Apple’s logo is almost beginning to look like an accidentally designed prophecy symbolizing a healthy bite taken out of their monopoly.

Right out of the Window

They launched a tablet when it was still a term used mostly for therapeutic advice, their smartphone OS once powered almost every touchscreen phone in the market. Its desktop OS was loved by users and praised by critics, and its portable music player was being billed as the definitive iPod killer.

Years later, the Surface tablet is still finding its feet in the tablet market, Windows Phone 8 is still just warming up, Windows 8 has been criticized by users and well, critics, and the Zune has completely ceased to exist.

So where did Microsoft, a brand which inspired fierce devotion, and in its heyday, had people queuing up to buy the next best version of Windows, go wrong?

They got hung (pun intended) on a BSOD obsessed Windows Vista. Yes, nothing else.

Why you ask. So after developing a rock solid and visually pleasant Windows XP, Microsoft and their developers merrily incubated the next version of Windows, only to come out after half a decade with an OS which was half as robust as its predecessor, had scorn inducing issues with software and hardware compatibility, and consumed more memory than most could afford.

It had without a doubt received a fresh coat of paint (those hate-it-or-love-it frosted glass effects) and looked nothing like Windows XP. But, alas, if it isn’t skin deep, it isn’t beauty. Unsurprisingly then, it was widely panned not only for its shortcomings but also for how it ripped off Mac OS X in some ways. The contempt against Vista reached a crescendo when OEMs had to bow to users’ demands to downgrade their newly purchased computers from Vista to XP.

3D icons was Vista’s leitmotif

It was a jolt to Microsoft, like a stationary Bentley being hit by an invisible force, like a giant been wrenched out of a bad dream. Only, it wasn’t a dream. They knew that quick amends were in order and soon got back to their drawing board to unveil, two years down the line, Windows 7. It was widely adopted by the still wailing users of Windows Vista and smugly accepted by Windows XP loyalists. Pride salvaged, Microsoft thought.

What they didn’t realise was that they had totally, entirely and comprehensively missed the bus which carried a huge placard saying “Smartphones and tablets this way. So long computers!”

So when smartphones and tablets did eventually take over and computers’ sales dwindled, Microsoft was like a deer caught in the headlights. It was unbelievable. They had failed to spot a trend which is cannibalising the market they thrive on. They were in daze, clueless and hapless.

Enter Windows 8, Microsoft’s ambitious move to unite phones, computers and tablets. Can one really do that? Maybe sometime in the future, or maybe never, but with the existing ecosystem, certainly not today. Windows 8 seems to be suffering the same disdain as Vista, with users clamouring for the traditional Windows experience over the pastel dyed one which Microsoft is desperately trying to push down everyone’s throat. It’s almost too radical a change for an average Joe coming off Windows 7. They’ve already issued a bevy of updates to assuage customers, but Windows 8’s vision and an average PC user’s utilitarian needs simply do not fall in line.

Of course their Windows Phone 8 and Windows RT are doing a good job of running its hardware but here’s a blunt truth — ever since the market for handheld devices exploded, Microsoft has always been playing catch-up. Why? One, their Windows Phone OS arrived a little too late and that too half baked — no copy paste remember? Second, the much needed updates have been terribly scant. For comparison, Android received at least 3 major updates in the last year and a half, while Windows Phone basically stagnated. It’s excruciatingly hard, as they realise now, to proselytize an Android or iOS user into an altogether different ecosystem.

Nokia, Microsoft’s obtainment, is trying to keep afloat with a heavily forked version of Android in Nokia X. What defies logic is their plan to lure users to a high end Windows Phone device if they savour using the company’s mid-range droid. Wouldn’t I just buy a high end Droid from the competition’s offerings instead? Best of luck Elop. But the Finns have to be lauded for pulling out all stops and creating Android totting handsets which most consumers hoped for but never quite expected. Also, it’ll be interesting to see how this Android experiment pans out under Microsoft’s umbrella when the acquisition becomes official sometime later this year. But I digress.

The question remains — Why couldn’t a company of Microsoft’s scale and resources, despite their best efforts, could do nothing to stem first, the ebbing PC sales, and then the user base lost to Apple and Google.

The rot for Microsoft started soon after Bill Gates went out figuring waterless toilets and free vaccines while heads like Tim Cook and Larry Page spent every waking second of their lives on driving growth in their organisations. Steve Ballmer’s bombastic mannerisms (never before or since has a CEO leapt out of a cake at a company bash!), scathing product reviews which often left the developers shattered and the products scrapped, and the lack of a fresh perspective has eroded a chunk of their core user base. He’s a sales guy heading a tech company after all! “Maybe I’m an emblem of an old era, and I have to move on,” Ballmer told the Wall Street Journal. “As much as I love everything about what I’m doing,” he added, “the best way for Microsoft to enter a new era is a new leader who will accelerate change.”

2013 will go down in history as the year when Mac sales finally overtook PC sales. And Apple should pat themselves for this because even after all its foibles Windows still rules the roost when it comes to market share, and it will, in all probability continue to do so for years to come, just without the halo around a newly purchased PC.

Satya Nadella, the newly crowned CEO of the tech giant has already proved his mettle in the cloud and enterprise division of Microsoft and has his task cut out. He has reiterated that Microsoft needs to reinvent itself in a “cloud and mobile first world”. Led by someone who has risen through the ranks, and shepherded by the genial Gates himself, Microsoft is expected to shed all baggage and begin afresh, looking for new peaks to conquer, in weather that is at best, inclement. The climb will still be a steep one.

This shall be continued with the second part of this discussion where I’ll pursue Samsung and of course, Google. For more such bracing reads, you might want to register for the soon to be launched ProsePot.com