I think both Paul Kedrosky and Nick Carr is right . . . that Google Pack is the pet project of Larry and Sergey and that Google Pack is a trojan horse attempt at disintermediating MSFT. (Michael Parekh have the best summary/analysis of the Gpack)

The software industry has consolidated so much that “publishers” don’t really play a huge role in the space as they did in the early 80’s. Today, Microsoft has essentially become the defacto publisher and producer of software through its “extend & embrace” strategy. However, the last 6 month has made it exceeding clear that there exist a huge demand for the long tail of software which had previously been under monetized due to Microsoft’s dominance. The current “tails” are inefficiently monetized because the lack of an efficient distribution and marketing channel which in turn force many tail-focused software developers to seek out the public domain or shareware infrastructure as an alternative.

One huge huge software market that remained fragmented with traditional publishers holding the power is in games. When the GooglePack anouncement first came out I couldnt help but think of Half-Life. Being a certified geek, I’ve spent a good portion of my mid twenties dedicated to the art of Half-Life Counter Strike. I suspect (:)) Larry and Sergey did too, and that Half-Life is their inspiration for GooglePack. Let me explain, Half-Life’s developer, Valve, launched Steam in 2002 as a method to distribute games directly from developer and gamers. Steam was so successful (after some hicups) that Valve’s traditional game publisher (Sierra/Vivendi) felt neccessary to sue Valve. ( More here on independent developers’ reaction).

Steam has evolved beyond just pure “pipes” to a full grown community with instant messaging, thirdparty software aggregation, and perhaps in the near future . . . a currency system and markplace for virtual goods. The obvious potential of having a direct to end user distribution channel is HUGE (not to mention anti-piracy implications). Furthermore, with SaaS being the hot trend, having such a “pipe” to and from the desktop is a prerequisite for building a metering and billing infrastructure for subscription based business models.

Steam got there because the first application which it was bundled with (Counter Strike) was “indispensable” - atleast to a particular segment of users. I’m not quite sure google pack as it currently exists fits that criteria, but Larry is sure trying. I wouldnt mind if the Valve guys start thinking a little bigger and create a sister system of Steam to take on Google. . . if there is a company that has more credibility with geeks/early adopters than Google it is Valve . . .