June 6, 2006 1:40 PM PDT
Google guns for Microsoft
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Still, as the pieces come together, there's little doubt that Google is quietly providing Web-based versions of the Office applications upon which Microsoft has built an empire.
"It does represent by Google a step onto Microsoft territory and yet another reason for Microsoft to try to cut off Google's ad-driven air supply," said Rob Helm, director of research at the analyst firm Directions on Microsoft.
Microsoft, meanwhile, is revamping its business to focus on Web services under the Windows Live and Office Live names, and retooling its advertising technology to target Google's bread-and-butter ad market.
"If you use this (Google's products) you may not have to use all the Microsoft products. Google has put together pieces of a whole suite," he said. "They are rudimentary tools. They're not going to immediately cause people to replace things, but for some people who don't want to pay for software and don't need to pay for extended features, this will be very attractive."
Video: Google wants your spreadsheets
Excel has a formidable foe
Advanced users will want to stay away from Google Spreadsheets because of its more limited features, other analysts agreed.
"Google has no clue about what enterprises want or need. Any success they have (with Google Spreadsheets) will come in the consumer market first and then be dragged into the enterprise that way," said Gartner analyst David Smith. "The real power-users are not going to be giving up their Excel spreadsheets anytime soon."
JupiterResearch analyst Michael Gartenberg questioned Google's strategy and said Microsoft shouldn't be worried.
"It's hard to imagine how either of these things (Spreadsheets or Writely) is strategic to their business. They have nothing to do with Google's core business of search," he said. "And it's hard to imagine how either one would have an impact on Microsoft or Office. There have been free alternatives to Office for years, and none have gained traction."
Microsoft does not have a hosted or Web-based version of Excel yet, but third parties already provide the online sharing capability that Google is touting with its Spreadsheets, said Microsoft.
"This is just an imitation of functionality that many other vendors already deliver, such as SimDesk, Wikicalc, and Salesforce.com," Alan Yates, general manager of Microsoft's information product-management group, said in an e-mail. "The reality is, customers are more demanding...about what they expect from their spreadsheet programs, and more than 400 million people around the world have chosen Microsoft Office because they benefit from our focus on helping them be more productive."
Helm, of Directions on Microsoft, agreed. "Google Spreadsheets is most plausibly an adjunct to Excel," he said. "If you have a spreadsheet you need to share, a service like this might make sense."
Google Spreadsheets will allow people to import Excel and other spreadsheet-type documents and export data to them, just like Intuit's QuickBase structured-data platform does. Meanwhile, Intuit will probably enable import and export compatibility with Google Spreadsheets, said Jana Eggers, general manager of Intuit's QuickBase division.
Google's next step?
Google has declined to lay out a full picture of its hosted productivity application strategy, and a Google representative said the company was not ready to discuss its plans for Writely and its strategy behind Google Spreadsheets. "Google Spreadsheets is not part of a suite of hosted productivity apps," the representative wrote in an e-mail. "Rather, it is a limited test that launched on Google Labs."
Many observers expect Google to use these applications to appeal to business customers, as Microsoft has done with Windows and Office.
Susquehanna Financial Group analyst Marianne Wolk said Google appears close to offering small businesses a suite for managing and storing files online. But the company still has to build its credibility with enterprise customers, analysts said.
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