February 22, 2007 8:16 AM PST
Businesses to buy into Google Apps Premier Edition?
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"I think in some areas, it is competitive (with Microsoft and OpenOffice), but in a lot of ways, we see it as complementary as well," Glotzbach said. "For larger organizations, this is really an alternative that may better suit some types of users: people who are field workers or who aren't necessarily sitting at a desk all the time. This is a much lower-cost, easier-to-manage solution and has a lot of end-user benefits, in terms of portability."
Matthew Brown, a senior analyst at Forrester Research, agreed that Google's new business application suite may appeal to a different sector of the market than programs like Microsoft Office typically do.
"From a marketing perspective, (Google is) going to erode parts of Microsoft's business where people are either overserved by Microsoft's tools or priced out of them completely," Brown said, noting that Microsoft Office's programs are pricier and more feature-heavy than Google's light, Web-based software.
"Not every buyer needs to do complex applications in a spreadsheet," Brown added. "When you look at what Microsoft offers versus what Google is offering through Google Apps, it's very hard to compare them from a functional perspective."
Microsoft, meanwhile, attempted to look unfettered in the face of Google's announcement and drew attention to its Office 2007 product, which was launched last month.
"We are focused on providing our customers with the best productivity tools in the world," Microsoft spokeswoman Whitney Burk said in a statement. "The 2007 release of Microsoft Office is a dramatic step forward."
But Brown disagreed: in his opinion, Microsoft will maintain a sharp eye on Google Apps' expansion.
"Clearly, Microsoft will perceive it as a direct attack," he said. "They've offered Office Live, which is their on-demand set of productivity tools that's supported by an advertising-based model and a subscription model, but there are some barriers that Microsoft will have to face to building a real critical mass around that offering."
In other words, after making a name for itself by selling boxed software, Microsoft may find it tough to tackle the less functional but more versatile Google Apps.
Google, after all, has already grounded itself in a profitable business model for Web-based applications, regardless of whether it charges for them. The advertising model built into its free Google Apps has already proven successful.
"Even if people don't decide to up to the $50-per-user rate per year on a paid-subscription basis, Google still has a lot of runway to make money off of this," Brown said.
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10 comments
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Google Apps v1.0 may not have Microsoft too worried, but I bet they'll be sweating plenty by the time v 2 is released.
If a business doesn't want to pay for MS Office, OpenOffice is a better choice.
So I don't get why this was introduced now... are they going to start following the Microsoft model? (Release 1.0, improve, release 2.0, improve, release 3.0 - competent version)
It seems like they should have done more to integrate the JotSpot acquisition first. One, it has some great offerings in its Spreadsheet not found in Google Spreadsheets or Excel. Not to mention their Wiki product.
And there's no mention of integrating AdSense or Google Checkout.
They should also buy Gliffy to add a Visio competitor. And form some kind of Customer/People Management software. (GMail's contact system leaves a lot to be desired!!!!!!!!) And some simple bookkeeping/money tracking software. I'd love a replacement for Microsoft Money that I could access from any web-enabled computer. It'd be much easier to get all my family's receipts entered and all my bills paid.
Small business really have no incentive to use it either. Everyone has standardized on the Office format, and then there is the ol' learning curve. Large businesses already have an IT infrastructure in place and they also prefer to keep their files on their own servers.
Google trying to get into the Office app environment reminds me of Netware buying the Wordperfect suite. It makes no sense and only distracts the company from their core business.
I'm hearing, "It's all I need and I don't have to email documents back and forth to my office".