There’s nothing like a good corporate battle.   While potentially costly to the participants, the benefits to consumers include lower prices, better, and more diverse products.   This competition is the foundation upon which the capitalist world is built, and spurs the innovation that drives society forward.

As worldwide adoption and usage of computers and the Internet continues to surge, the products by which people access and interact with their increasingly online lives will continue to drive profits for companies within these markets.   Three of the biggest players, namely Google, Microsoft, and Apple, are strategically positioning themselves for a three-way corporate clash of epic proportions in several sub-markets within the converging online, software, and mobile hardware spaces.

While the animosity between these companies may be growing, the ties that bind them weren’t always negative in nature.   Sure, Microsoft and Apple have always been natural rivals in the PC, operating system, and software markets.   But to an extent, Microsoft may have saved Apple in the late 1990′s by investing in the flailing company and continuing to develop and support its Office and IE products for Apple’s struggling Macintosh computers.   Google, at half the age of Microsoft and Apple, didn’t begin directly competing with its two older cousins until relatively recently, rather having initially focused on its core search technology and advertising products.  And up until a few months ago, Google’s CEO sat on Apple’s board of directors.

But presently, as the allure of developing and selling both consumer hardware and software to harness the power of the Internet, social networking, and personal productivity, all three companies have strayed from their core product offerings and crossed into an overlapping market driven by the feature convergence and high demand of mobile products and software.  The chart below exemplifies each company’s product offerings in a variety of sub-markets and includes insight into who is leading in each arena.

PC OS

As mentioned, Apple and Microsoft have always rivaled each other in the operating system realm, with Apple also manufacturing its own Macintosh hardware.  While Microsoft is by far the world’s dominant OS maker, the introduction of Google’s open source Chrome OS could herald a new era of lightweight, net-centric “cloud based” software for the increasingly popular netbook and tablet market segment, thus potentially endangering Window’s choke-hold on the market.  Additionally, Apple reported during its most recent quarterly report that sales of Macintosh systems increased by 33% in 2009 (from 2008), thus increasing the ubiquity of its OS X.

Mobile Hardware, Mobile OS, and PMP

Obviously the iPhone dominates the smartphone market and sets the bar upon which all others will be judged.  The appeal and diversity of the App Store (and its 100,000+ apps) are a significant hurdle for any competitor to overcome.  But the most recent versions of Google’s Android operating system installed on quality phones like the DROID from Motorola and Nexus One from HTC have shown that they can compete with the iPhone while leveraging proprietary features like Google Voice and Maps.  If Android’s open source platform can avoid splintering into multiple varying threads while allowing developers to bolster the number of available applications, the smartphone OS market may soon condense into one with just two competitors, having completely defeated Microsoft’s Windows Mobile OS.

But Microsoft may soon fire a salvo across the bows of both Apple and Google.  Its relatively successful ZuneHD media player, a direct competitor to Apple’s iPod Touch, need only add a cellphone feature to strongly enter the smartphone market with Apple and Google.  While no official announcement has been made, rumors about plans for such a device exist and are bolstered by the logic associated with such a product.

Web Browsers

Of these three companies, Microsoft is the reigning champion of web browser software (although Firefox actually gets more usage than IE) .  Having defeated Netscape, Microsoft knows how to leverage its dominance in the PC OS market to favor its browser.  But repeated security flaws in the software and lack of features has driven many users to perceived safer browsers, such as Google’s Chrome (available on Windows, Mac, and Linux platforms), which in just over a year has gained significant market share over Apple’s Safari and from Microsoft’s IE.

Web Search and Online Maps

Microsoft has been trying to develop a serious search engine competitor for over a decade.  The limited success of MSN Search, which became Live Search in 2007, may finally end thanks the company’s re-branding of its search product to Bing.  Bing, which will eventually power all Yahoo searches in addition to those from its own site, has shown steady growth since its inception.  And although Apple doesn’t have a direct stake in the online search engine game, it may replace Google with Bing as the default search engine on the iPhone.

With Live Search’s re-branding came other changes in Microsoft’s online product offerings.  Virtual Earth, a competitor to Google Maps, was renamed Bing Maps.  Its features were enhanced to seriously challenge, if not exceed, the long-time supremacy of Google Maps.  You can try both side-by-side here.

Office Productivity Software

Microsoft’s Office suite of productivity software has been refined and developed over multiple decades to include features and capabilities that the market wants.  With the emergence of cloud computing and release of Google Docs, Microsoft migrated its software suite onto the web, calling it Microsoft Office Live.  While the features available in Google Docs are sufficient for most users – given that Docs is free, those used to the advanced features of Microsoft Office will find it lacking, thus temporarily securing Microsoft’s place within this market.  Apple too has an online productivity suite called iWork which has had negligible impact on competitive products from Google and Microsoft.

Conclusion

The way software and the Internet are used is changing.  The world is going mobile.  Devices are converging.  Smartphones, netbooks, and tablet PC’s (like the one Apple will announce tomorrow) will forever change the paradigm by which we interact with each other and these devices.  It’s a massive shift that has created an even more massive market with growth potential unlike any other within the industry.  Who stands to gain (or loose) the most during this transition?  Clearly any company that stands on the side lines, resting on the laurels of past successes has already lost.  So it’s no accident that the walls of difference once separating Google, Microsoft, and Apple are crumbling.  These companies see the way technology is driving society, and the shifts required of their business models to survive.    This is an exciting time…