Microsoft (MSFT) has been targeting Google’s (GOOG) lucrative web search (and search advertising) business for a while now, and doesn’t seem to have gained much ground. While search experts find MSN’s search results to be better than they were in the early stages of development, Google has held its market share against all comers; only Ask.com, with its aggressive television advertising and sponsorship campaign, has shown signs of life in the market share contest. Now, Google is targeting Microsoft’s cash cow: MS Office. Google has announced Google Apps for Your Domain, a suite of web-based tools for the small and medium business market. (One wonders how much they paid their name consultant to come up with THAT clunker.)
One of the better articles we’ve seen on this move is by Aaron Ricadela at Information Week - In Depth: Google Discloses Plans For Long-Awaited Office Suite, First Components Due This Week.
Google this week will launch Google Apps for Your Domain, a software bundle aimed at small and midsize companies. The free, ad-supported package combines Google’s E-mail, calendar, and instant messaging with Web site creation software. It will be hosted in Google’s data center, branded with customers’ domain names, and packaged with management tools for IT pros.
That’s the first step. Later this year, Google plans to add its Writely word processor and Google Spreadsheets to the suite, build online collaboration features that work across its applications, and market the whole package to large companies for a fee. Google will include IT-friendly features such as APIs, directory-server integration, guaranteed performance levels, and telephone tech support.
This is a really interesting approach - rather than take on Microsoft head-on, Google’s approach seems to be one of coexistence - for the moment, at least. By offering ease of collaboration on Microsoft-generated documents, Google can introduce customers to their suite gently. As the online tools get more robust and as users get more familiar with them, the need for local Microsoft software to create the documents could be reduced. Microsoft itself sees collaboration as an opportunity, but no doubt will pursue it with server-based software like SharePoint Server. Smaller businesses in particular could find Google’s initiative appealing. Not only do Microsoft products cost money to purchase, installing and maintaining them is beyond the grasp of many small businesses. While most people can probably bumble through installing Microsoft Office on individual PCs, installing, configuring, and maintaining tools like the server-based components of MS Outlook, SharePoint, etc. requires a higher level of expertise. If something blows up on your server, even a short visit by your favorite MCSE will likely run into the hundreds of dollars, and a major problem even more. The appeal of Google supported apps in the long run may be less from initial cost avoidance and more from a desire to let Google take care of application maintenance, backups, etc.
Naturally, small businesses aren’t going to eliminate their local servers overnight; most run applications like CAD, manufacturing control, etc., that aren’t all that practical to run remotely. Even these apps, though, are sometimes offered as services - my accountant, for example, has begun pushing a small business accounting plan that is web accessible and lets them prepare statements and tax filings, make journal entries, etc. This sounds like something from the 1980s, but could be part of the advancing wave of replacing local software with web apps.
Reaction around the Web is mixed. Anil Dash writes a thoughtful piece that dismisses the new Google offering as a competitor to MS Office, because Microsoft’s key market is the Fortune 500 (who won’t adopt Google’s suite) and other reasons. Computers.net thinks that the offering “threatens Microsoft’s Market Share”. GigaOM sees major privacy concerns with the Google apps.
One way or the other, don’t expect an overnight change - businesses have to get comfortable with giving up some control in return for the benefits of remote applications. And Microsoft itself is moving in the direction of hosted applications, too, with its Live offerings. The InformationWeek piece sums up the situation well:
The Office stronghold makes this Microsoft’s game to lose, but the company’s been slow to embrace the Web’s collaboration potential with the suite. Google has proven it can deliver captivating, cutting-edge online software, but most of it hasn’t been tuned for business use. Who can patch up their weak spots best? With the companies moving quickly toward the exact same turf, the coming collision will tell.
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[…] Roger Dooley says, “One way or the other, don’t expect an overnight change - businesses have to get comfortable with giving up some control in return for the benefits of remote applications.” […]
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[…] Unlike a lot of tech people however, I’m not all about sticking it to Microsoft. I like the fact that Microsoft is trying to improve their search engine to compete with Google. This forces Google to step up to the plate and deliver a top quality search engine. I also like the fact that Microsoft is releasing a portable media player named Zune which forces Apple to make sure the iPod is always moving forward and improving. […]
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