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Everyone used to say this about Microsoft.
Yup. It's startling how many corollaries can be drawn. But I have to hand it to redmond: they had the better UI design, if not the better UX.
Wait, are you saying you think that Microsoft products have better UX than Google products?

I'd like to disagree there. My experience with MS products (Windows from 95 until 7, Office, IE) is that they get in your way a lot ("are you sure?" "are you sure?" "your computer is about to reboot", etc). They have lots of focus-stealing dialogs and constant interruptions.

Google (search, gmail, maps), on the other hand, tends to stay out of your way and be invisible while you're using their products. I'd consider their UX to be many times better than Microsoft's.

No, I meant in the past - when Microsoft was the top-dog and people were talking about them much in the same way as people (I) might be talking about google now. Windows had very valid reasons for becoming wildly popular - ignoring the more questionable practices of their management.
IMO, the best way to compete with Google is to actually pay attention to your product. Outside a few core apps like search and Gmail, it astonishes me how little Google seems to care about their work once it's launched. They just sit there, accumulating dust for years until they get revamped or taken down. If you can launch a competitor that has frequent updates, builds a community, or really just conveys the idea that there's a man behind the curtain, I think you can do ok.

This doesn't help much with trivial webapps, and I'm not sure I feel good about other URL shorteners right now. But any product with some complexity will benefit from attention, and Google doesn't spare a lot of that for niche products.

Edit: word choice

That's a very, very good point - focus is another aspect (as both you and moultano say) which is an advantage to startups and companies in general. If you have focus, community (support) and a great UI/UX - Google isn't as scary.
It always irks me when people say that Search and Mail are the only successful products to come out of Google (I know that isn't what you said specifically, but it sparked the memory).

YouTube, Google Finance, Google Maps, Blogger, Google Docs, Google Groups, Google Reader, Google Talk, Google Voice, Google Calendar, Chrome, and the entire Android platform are all things that I use on nearly a daily basis. Most, if not all of those are the leading product in their field. Companies by the boatload switch to exclusive use of Google Apps for almost all of their needs, and there's a reason behind it.

That's not to say that they're flawless. Google Video was pretty terrible until they killed it for YouTube. Knol is a pretty big failure. They never really did anything with Picasa on the web side of things (I thoroughly enjoy the desktop app however). They really dropped the ball on Wave in terms of marketing and deployment. Wave in particular saddens me, because it could have so easily gone the other way and been an excellent successor to email. And I'm sure they have hundreds if not thousands of products that we never hear about and never will see the light of day.

But saying Google has only succeeded in Search and E-mail is just silly.

Oh, I'll agree that a lot of their products are fairly successful in terms of being widely-used. (Revenue? No way for me to know.) But how many of them are evolved or improved on a regular basis?

Reader has had some social enhancements, but I don't know if I've seen anything in the last year. Google Groups spent a long time sitting dormant after they bought DejaNews. Much of the Google Apps suite stays static for long periods of time. Chrome I'll give you, and I'm sure there are new features for some of the others that I haven't followed... but Google seems to be very good at creating apps which are just good enough that they don't need to do anything further with them. More power to them for that, I guess, but I do like to see products evolve.

Somewhat related from the article:

"It’s easy for Google to build something fifty percent of the way and release it, therefore sucking the air out of the room. They don’t even need to “finish” it – the very fact they’ve made it and put it everywhere is enough to make a market dry up and users to flock to it. It will have enough functionality – and just enough – to get the job done (“perfectly functional, albeit Spartan”)."

Given the context of the discussion, it only seems fair to remove all the products they acquired from your list.
Wave in particular saddens me, because it could have so easily gone the other way and been an excellent successor to email.

Yes, but Google should this learn from the Wave thing: as massive as they are, there are things that are just as hulking as they, like the email ecosystem.

http://xkcd.com/802/

The way you take on something like email is through a phased approach. Be an adjunct. Send in your fifth columnists and take over slowly. Adding things to Gmail is the right idea. So is making the fastest browser.

Whenever a large company does something, people always over-estimate how many people from that company did it. The organization as a whole doesn't train it's eye on each little problem, saturating it with thousands of engineers. Instead, a handful of engineers decide they want to do something, do it, and then eventually move on to other things.

You may not be able to compete with Google's infrastructure, but you can certainly compete on focus.

You can easily compete with Google on UI/UX. It's a company run by engineers, so traditionally they've been horrible in this respect, focusing mainly on the engineering behind the product rather than the eye-candy.
Less directed at you - but personally I've grown frustrated with the dismissiveness of the term "eye candy" - having a good design, and good UX is a good thing. Designing with the user in mind, and making tradeoffs in favor of the user is just good practice.

I've seen a lot of people use "eye candy" as a term that somehow excuses their crappy UI and UX, time and time again it comes up in discussions about open source and linux UIs. The users matter.

The way to beat Google is to create a product with a superior user experience.

Two notable examples:

1. Facebook beating Google's Orkut. 2. Youtube beating Google Video.

In addition, the fact that some of Google's products launch with ugly or complex user interfaces creates a clear and present opportunity for startups with good design skills and a focus on usability.

For example, I created Trafficspaces simply because I felt Google Ad Manager and OpenX were both a royal pain in the ass to use.

I think I said that in the article :)
Consider it an extra validation