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SOFTWARE NEWS: Google Apps pose online challenge to Microsoft Office. By John Stokdyk

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6th Sep 2006
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The software industry's behemoths are stamping the ground and flaring their nostrils in anticipation of a territorial showdown following the launch of Google Apps.

Now being offered on a free trial basis to beta test users, Google Apps for Your Domain is a package of four hosted utilities: the Gmail email system; Google Talk, which can handle text messaging and voice conversations; Google Calendar; and Google Page Creator.

By the time the system is ready for commercial launch - possibly next year - Google is expected to include its online spreadsheet system and the Writely word processor within the bundle, in a direct pitch to win over users from the Microsoft Office camp.

Analysts and Google executives acknowledge that the company does not have as mature or sophisticated tools as Microsoft, but by bringing forward online, collaborative tools such as the Calendar, and offering users the option of using their own domain names for email addresses, Google is setting down a serious challenge to Microsoft.

"The right way to view Writely and Google Spreadsheets, especially in the context of a larger business, isn't necessarily as a replacement for Word or Excel. They're the collaboration component of that," Google's head of enterprise products Matt Glotzbach told InformationWeek

With file conversion tools built into Gmail, Google is aiming to absorb Microsoft customers whey they share their Word and Excel files, InformationWeek's Aaron Ricadela explained.

As analysts from Gartner put it, "Microsoft is likely to respond aggressively."

Enhancements to Office 2007 and the development of SharePoint will make it possible for users to publish and edit their Office documents on to a web server - with the new upgrade due right around the time Google plans to go into commercial launch mode for its online application suite.

Microsoft is also expected to retaliate with an online collaboration facility and a calendar service that will let users link their Outlook clients via the web-based Office Live portal. But Office Live remains limited to users in North America, and was deeded by Ricadela to be "underwhelming and poorly marketed".

Google's strategy is not limited to targeting Microsoft's personal productivity tools. Dave Girouard, vice president and general manager of Google's enterprise business, said on the Customer Management Community that Google Apps represented a "starting point" for its business software strategy.

"A hosted service like Google Apps for Your Domain eliminates many of the expenses and hassles of maintaining a communications infrastructure, which is welcome relief for many small business owners and IT staffers. Organisations can let Google be the experts in delivering high quality e-mail, messaging, and other web-based services while they focus on the needs of their users and their day-to-day business," he said.

This stance prompted speculation that Google may be planning to develop online accounting and customer relationship management systems.

Within days of the Google Apps announcement, both Salesforce.com and NetSuite made significant commitments to Google's technology. Salesforce.com bought Kieden, a company that tracks the revenue generated by Google AdWords, and CEO Marc Benioff has publicly lobbied Google to let Salesforce market the Writely word processor. NetSuite, meanwhile, has launched a Keyword Marketing Module.

The response to Google Apps from early adopters has been positive. In his blog, "The Geek of Everything" Mark MacLeod commented, "It's an amazing service which we weren't able to afford to pay for. We had previously considered Kerio MailServer and Microsoft Exchange, but as a very small start-up company, they were just too expensive.

"The interface is just like their personal Gmail and Calendar ones, but we can manage all the accounts under our domain name. This is a must for any small business. We'll definitely recommend that our customers take advantage of this service. Hotmail has gotten what it deserves for sitting on their hands for four years."

But just as happened when Google first launched Gmail, there are voices who caution against the search engine's habit of storing user's data in perpetuity and mining it to target ads and marketing campaigns.

In terms of desktop applications, Microsoft is like the Premier League football team facing a lower league team in a tricky FA Cup tie - it should prevail in this encounter, but its ageing components could be vulnerable to the younger and more enthusiastic upstart.

For Google, however, the risk is more nebulous. If it succeeds with this push into business applications, it could soon replace Microsoft as the technology company everybody loves to hate.

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Dennis Howlett
By dahowlett
07th Sep 2006 10:25

Oh dear
And there I was thinking I'm the only one who gets accused of sucking too much Kool-Aid. How long ago was it that readers and contribs here were saying the equivalent of: 'Free apps? Never catch on. Talking nonsense Howlett?" Yet here we have others saying the same. Only this time I think the pundits are wrong.

Google is a two revenue/product company: Adsense and Adwords. At present it is so cash rich it falls within the definition of a finance house. How mad is that? It has to spend its money somehow. But it also has to secure its future.

None - and I mean zippo, nada - of its services other than search delivers a dime in revenues. Therefore, they can say what they wish, but they've got to find a convincing business model to come remotely close to succeeding against Microsoft.

The apps are 'so-so' and in the case of the spreadsheet wouldn't make it past the front door of most practitioners. Writely is very good but it's not been touched since acquisition. At least that's what the beta meter says. I've seen a much more powerful spread with more than 500 functions already built in coming out of Hong Kong. Fantastic stuff. But it needs acquiring because people want suites.

Microsoft's killer is still Outlook and GMail + calendar doesn't come close. Especially after SAP brought out Duet.

There are far more compelling offerings around. But to find out about those, as well as what's going on with Microsoft, you'll need to pitch up to Office 2.0" which I'll be attending, bloggging and podcasting.

Ooh yes - ought to say while I'm here - there will likely be a new and very different accounting service to talk about.

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