Google Apps Challenging MS's Office Dominance

By Robert McGarvey

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The ambition is breathtaking. Google wants nothing less than to knock Microsoft Office off the desktop and to grab those users for Google Apps, a grab-bag of business applications now served up for $50 per-head-per-year in a premier edition (and for zip, absolutely nothing, for users of the plain-jane package which provides less storage capability and less robust support).


Google will tell you it has 500,000 businesses already signed up. “… we sign up 2000 businesses every day,” said Andrew Kovacs, a Google spokesperson. But Google declines to break down the numbers of free versus paid users, in part because the company insists that distinction is not yet relevant.


“A lot of businesses are testing Google Apps, trying out the features, using the free version,” explains Kovacs. The implication is when customers are happy, they will sign up for the paid version. Then they will still save big money: “Google Apps costs 1/10th of what a traditional desktop solution costs,” said Kovacs, who adds that the price comparison is fully loaded to include reduced support costs, reduced storage (Google stores the data in the cloud), and faster learning curves (Google Apps are simpler, thus, allegedly, easier to learn than comparable Microsoft Office apps).


So what, you ask? Is all of this smoke—perhaps blown in Microsoft’s face just to annoy the Redmond goliath? Or is Google really onto something?


Well, the evidence is mounting that Google may well be leading a paradigm shift that just might throw the office support marketplace into flux sooner than anybody thought. If you go to Google App’s endorsements page there are big names to eyeball. Cap Gemini, GE, and Procter & Gamble all say they are using Google Apps (in pilots or in group-specific applications; these are not enterprise-wide implementations).


But perhaps the most glittering corporate name of all is in fact standardized on Google Apps: “We eat our own dog food. This is what we use inside Google,” said Kovacs who insists that even the billionaire founders, Sergey Brin and Larry Page, make regular use of the tools.


Numbers quickly multiply. Gartner analyst Tom Austin said his firm is about to release a study that will claim a stunning six percent of large enterprise IT personnel use a Google Web-based app hourly. One in three (33%) say they use these apps daily. Austin admits that as the data rolled in, “ … we were stunned. Google is slowly becoming pervasive.”


The kicker to Gartner’s research: it is not finding much evidence of signs ups for the premier edition. “Google is not signing many enterprise deals but it nonetheless is becoming part of the workday of many employees,” said Austin.


Google Apps are not, by any measure, equal in firepower to Microsoft’s Office suite but  apparently mounting numbers of users are finding the tools to be good enough. In one emerging but increasingly critical area, Google Apps may actually be superior.


Two words pinpoint Google’s sweet spot: mobile collaboration. “Our tools let people work together much more easily, much better, than traditional desktop tools do,” insists Kovacs. Several people can update documents and spreadsheets pretty much simultaneously in Google Apps and, better still, because the data are stored in the cloud, files are accessible by mobile workers no matter where they are.


“Google is a better way to collaborate,” said George Langan, CEO of eXpresso Corp., a developer of tools that let workers share and collaborate on Excel spreadsheets. “The collaborative workspace is here now and Google is already there.”


In fact, Google has a head-start. Austin estimates that Google has a two to three year lead over Microsoft when it comes to Web-deployment of online collaboration tools, but the question is, if Google is not selling Premier Edition licenses, can it make enough money serving up ads on the free edition of GMail?


“The answer is a definite maybe,” said Austin. He argues the jury is still out, but the research suggests Google email is very sticky. Users stay on the Google apps pages many times longer than search users stay on Google, said Austin. But will they click on enough ads to keep the Google cash register ringing? That is what we’ll find out over the next few years.


Meantime, there are two firm projections made by Austin. First, Microsoft Office pricing will adjust (downward) to reflect the presence of Google Apps in the marketplace.


Second: the real beneficiaries of all this activity in the office suite niche are the users. “It’s great to have this much competition,” said Austin. Having the Microsoft vs. Google streetfight is yielding a steady stream of product improvements. “We have not seen much competition since Windows ’95 was introduced. Both these suites are just going to keep adding features and getting better.


“This really is the best time for office application users in over 10 years,” adds Austin.