Can Google Still Claim It's Not Competing With Microsoft?

from the game-on dept

As Google has built up its online productivity products, it's had a harder and harder time maintaining its stance that it's not competing directly with Microsoft. Now the company is dropping any pretense that it's not competing head on, as it is releasing a paid version of its online office products, which includes email, a calendar, spreadsheets and a word processor. This is a departure from the company's traditional strategy of monetizing all of its services through advertising, and it hopes that at $50 per user per year, it presents a much more compelling value than Microsoft Office. Already, some big companies are using Google apps, including GE and Procter & Gamble, which one can assume are big spenders on Microsoft products. Of course, Google's entry into paid software isn't likely to be a cakewalk. When companies are actually paying for software, there's an assumption of excellent reliability. Error messages like "Oops, we're sorry, try again in a few minutes" probably won't go over very well. Furthermore, business will expect some level of software support, something that Google doesn't have much experience with. And of course there are technical challenges as well, such as how users are supposed to stay productive when they're offline. Still, there's no getting around the fact that this is a direct shot at one of Microsoft's biggest cash cows. While it probably won't steal a lot of business right away, it's likely to chip away on Microsoft's margins over time.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Witty Nickname, Feb 22nd, 2007 @ 8:17am

    Why Pay

    I doubt many companies will acutally pay for the services, except the very large ones. It only guarantees 99.9% uptime and support. Most small businesses who would be the main benefactors can just get a free Google account and get everything except guaranteed uptime and support free.

     

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  2.  
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    Shotwell, Feb 22nd, 2007 @ 8:27am

    Re: Why Pay

    You have to understand, these people are already paying for Office. They crave reliability and, as a general rule, do not have the infrastructure set up to get that. Having the uptime guarantee and support is something invaluable to a company trying something new and few would ever consider a switch without it. For a good example, see RedHat Linux.

     

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  3.  
    identicon
    Anonymous Coward, Feb 22nd, 2007 @ 8:27am

    google isnt competing with microsoft...

    microsoft is trying to compete with google.

     

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  4.  
    identicon
    ScaredOfTheMan, Feb 22nd, 2007 @ 8:30am

    Any competition to break the MS strangle hold on office, especially in large customers is a good thing.

    Let MS sweat it out, let them feel some pressure to improve out of necessity and not convenience.

    "Swing away"

     

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  5.  
    identicon
    Anonymous Coward, Feb 22nd, 2007 @ 8:36am

    Google offers support? News to me. I registered a domain with them that I can't forward. They used GoDaddy and GoDaddy said they can't help me because it technically belongs to Google. It's impossible to get in touch with Google. Look at the Google support groups for more people with the same complaint. I'm still waiting for the first 60 days to end, so I can escalate it.

     

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  6.  
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    Anonymous Coward, Feb 22nd, 2007 @ 8:48am

    When they start delivering their software on hardware to integrate on your companies infrastructure.. much like the search index.. then it will make a bigger impact

     

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  7.  
    identicon
    Voice of Reason, Feb 22nd, 2007 @ 8:52am

    Re:

    Yes, Anon, they offer support as part of this $50 package.

    You would've realized that had you read the article instead of going of on a tangent about something completely unrelated, and quite frankly, uninteresting.

     

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  8.  
    identicon
    hfanelli, Feb 22nd, 2007 @ 9:11am

    Re: Re:

    I'd switch our fortune 500 company over today if they had better solutions for calendar and contacts syncing on wireless devices.

     

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  9.  
    identicon
    No thanks, Feb 22nd, 2007 @ 9:15am

    The internet is great for certain types of applications, but NOT, in my opinion, for basic office apps like word processing and spreadsheets. At least not in an environment where you have mission-critical projects going on. The internet and Google's systems are simply to unreliable to justify the cost savings for many businesses. However, internal web-based apps are becoming very popular because they can be maintained and serviced in-house on a (hopefully) reliable network, but still give the flexibility of accessing them from any computer on the network.

    Now, if Google would license these apps on a subscription basis for installation on your company's servers, and came up with a good support contract system for their users, that would be a different story. Google already makes a search appliance available for internal networks, so I don't think it would be too difficult to replicate that for their web-based office apps. Being able to get a dedicated box running Google apps for your private network might just be something people will jump on, especially smaller businesses who choke on the price of MS Office upgrades. If nothing else, this may serve as incentive for Microsoft to make their prices more reasonable.

     

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  10.  
    identicon
    The Swiss Cheese Monster, Feb 22nd, 2007 @ 9:21am

    Re:

    Ha!

    You might have to "Transfer" your domain back to google"

     

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  11.  
    identicon
    comboman, Feb 22nd, 2007 @ 9:36am

    Price comparison

    Microsoft Office 2007 - $399-$679 (depending on options) good until next major upgrade cycle (probably 4 years) = $99 to $169 per year

    Google Office - $50 per year

    Considering the Google offering is much slimmer on features than even $399 Standard version of MS Office (not to mention the volume discounts most large companies get from MS) I don't see a lot of value in Google's product. If you're willing to put up with a less featured office suite, better to go with OpenOffice.org which is free and has none of the uptime problems and security issues of opening potentially sensitive documents on a web-based application.

     

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  12.  
    identicon
    Howard Lee Harkness, Feb 22nd, 2007 @ 9:57am

    Re: Security issues

    I work with data that is covered by HIPPA (in my day job). Not a chance the company would opt to use an online office suite. Nada. Zip. Zero.

    With more and more information getting covered by privacy laws, I think it would be a small market left over.
    --
    The Celtic Fiddler, violins and musical accessories

     

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  13.  
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    Chris Maresca, Feb 22nd, 2007 @ 10:12am

    I'm all for alternatives to MSFT....

    ... hell, I even started an Open Source strategy company 6 years ago to help people move away from proprietary products. But, Google is no competition to MSFT. Their apps are NOT replacements to Office, far from it. They may be OK for light use, but for most of people, they fall far short in feature/functionality. Never mind that they are proprietary in the worst way as Google has both the app and your data...

    If you really want a $50 alternative to MSFT, get SuSE Linux (or one of the other well supported desktop distros), which comes with Open Office and Evolution. Not only will your operating system be free, but you'll get a ton of good, supported productivity tools and you will in control of your data.

    Sure, OpenOffice is not fully compatible with MS Office yet, but it's much better than the poor 2nd cousin clone from Google. Really, Google should just stick to what they are, an advertising company.

    Chris.

     

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  14.  
    identicon
    EP, Feb 22nd, 2007 @ 10:23am

    Not Corporate Data Ready

    Google security aside, I think getting significant corporations to host their data outside their firewalls will be a very tough sell. The trend is the opposite direction: rules, regs, and laws about the storage of company data have been making it more critical to have things like auditability/certification of data integrity, faster time to retrieve data subsets, etc., and everything that is cool about what Google currently does with data seems to run contrary to those concerns.

    There was an article (last year?) about some a big financial firm with a sophisticated IT infrastructure being fined many million dollars, and potentially losing a $1B lawsuit because it could not produce the data requested within the time given by the court. This is not so much about the systems being up, as much as it is about being able to find all the data requested and to be able to prove that (1) it is all the data requested and (2) that it was not altered. Now add in trends around increasing privacy concerns...

    I think Google would need a different, specialized infrastructure and right now they have a branding problem in terms of how they handle data relative to typical corporate concerns.

    It would be fascinating to see this take off though, and I put nothing past Google.

    EP

     

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  15.  
    identicon
    glw, Feb 22nd, 2007 @ 10:52am

    Re:

    Google actually does have "search hardware". They have the "Google Search Appliance" and the newer "Google Mini".

    http://www.google.com/enterprise/gsa/
    http://www.google.com/enterprise/mini/

     

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  16.  
    identicon
    Anonymous Coward, Feb 22nd, 2007 @ 11:01am

    Re:

    When they start delivering their software on hardware to integrate on your companies infrastructure.. much like the search index.. then it will make a bigger impact.
    Google actually does have "search hardware". They have the "Google Search Appliance" and the newer "Google Mini". This is exactly what you are talking about...

     

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  17.  
    identicon
    dave, Feb 22nd, 2007 @ 11:14am

    Re:

    So your angry your free domain and website doesnt give you the right of full controll?
    Must be one of those slickdealer thieves!

    lol

     

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  18.  
    identicon
    Brad, Feb 22nd, 2007 @ 11:34am

    Why would any company, large or small, choose Google-hosted Spreadsheets and Docs -- with serious security and feature issues -- rather than OpenOffice?

     

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  19.  
    identicon
    Matt, Feb 22nd, 2007 @ 11:57am

    What are these serious security issues?
    ...Just curious

     

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  20.  
    identicon
    boredandblogging, Feb 22nd, 2007 @ 12:27pm

    "It only guarantees 99.9% uptime"

    Thats one hour downtime every 6 weeks. That would be superb for Exchange, too bad not many Exchange servers can do that unless there is very little load.

     

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  21.  
    identicon
    Brad, Feb 22nd, 2007 @ 1:13pm

    Matt, I am thinking of the concern with having a third-party host a corporation's data.

     

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  22.  
    identicon
    Mike, Feb 22nd, 2007 @ 1:29pm

    Whew

    Actually I am relieved.

    I signed up 4 domains to use Google Apps. I loved it.

    I extolled the virtues of it to everyone I know.

    I had a buddy who thought MS Live office was better but I pointed out that Google was free (and did more).

    Well, later he enjoyed pointing out that Google would start charging. I was a bit worried.

    Part of what I was doing was consolidating domains. I had one e-mail address from one domain forward to another.

    So for me, I thought that I would pay the per user per domain - ouch. Or give up some functionality.

    Today I visited Google Apps -

    www.google.com/a

    Sure enough they were charging (and rightly so). But they let the family and organizations still use it for free - woohoo.

    http://www.google.com/a/help/intl/en/admins/editions.html

    They also let people have some great apps for free. That is incredible. I used writely with a friend one night to collaborate on a document. It was amazing. Yeah, writely is feature sparse compared to Word but who uses all of the features.

    I don't.

    Most small businesses can use the free version to meet their needs. SMB of 25 or more will probably want something more but a small company of 5 people or so could use the free version.

    For example, I have a friend who runs a heating/cooling business. The company employs 10 - 20 people but the techs are on the road most of the time. Only a handful of people need e-mail - the free version would work fine for them.

    Google Apps is a great product. I am thankful that the let some of the early adopters stay on for free.

     

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  23.  
    identicon
    Brent Norris, Feb 22nd, 2007 @ 2:18pm

    Re: calendar and contacts syncing on wireless devi

    I've just recently put the pieces together. I can demonstrate how I think Google has now done a better job of this if you're interested.

    I'll write something up about this on my blog as soon as I give my clients a head start. ;)

    aloha,
    -Brent

     

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  24.  
    identicon
    Chris Maresca, Feb 22nd, 2007 @ 2:32pm

    Re: Whew

    Hate to tell you, but most real businesses run their operations on MS Excel. While Google's spreadsheet may be 'adequate', it's certainly not good enough to run your business on it.

    Your friend who runs the heating/cooling business probably uses Quickbooks. For him, the online version of Quickbooks would allow for time-tracking and a bunch of other stuff, all things that Google doesn't provide.

    Free email and calendaring is one things, but replacing business apps with Google is a false hope, never mind the cost of re-training people to use yet another system. Even Google's email service is questionable, I've had two business owners approach me about Open Source alternatives, one because spam filtering sucked, the other because he couldn't search by date and was loosing sales leads because of that.

    Like I said in another context, there are a lot of factors that keep people from moving away from MSFT, not the least of which is the cost of re-training people. And there are several critical apps which most business won't move away from without a 100% compatible replacement, namely:

    1. Outlook
    2. Excel
    3. Quickbooks

    Chris.

     

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  25.  
    identicon
    Dosquatch, Feb 22nd, 2007 @ 2:35pm

    Re: Re:

    Google actually does have "search hardware".

    I thing the poster knows this. He said:

    When they start delivering their software on hardware to integrate on your companies infrastructure.. much like the search index..

    I take this as - when they offer a "Google Applications Appliance" much like they currently offer a "Search Appliance". How are you reading it differently?

     

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  26.  
    identicon
    Buzz, Feb 22nd, 2007 @ 6:41pm

    Go Google!

    Google may not have much experience with software support, but I'm sure they'll come up with a far more innovative way of dealing with any issues that come up.

     

    reply to this | link to this | view in thread ]


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