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Google recently announced its Google Apps Premier Edition, a package of hosted services for businesses including calendars, word processing and messaging. For a $50 annual fee per user account, businesses can use the suite over the web on Googles computers eliminating the hassles of installing or maintaining software on employees PCs. With the Premier Edition, companies are guaranteed 99.9% uptime, phone help and extra storage. Industry analysts are calling this move a shot at Microsoft, whose omnipresent Office product are filled with extensive features that are overshot for the average employee.

Google Apps is clearly a disruptive entrant. Its features are "good enough for most users, clearly lacking the sophistication of the Office suite. Google Apps will not convert all enterprise applications at any Fortune 500 company today, but will likely slowly and profitably build a foothold market of small businesses attracted by the "pay-as-you-go model and undaunted with storing their data on Googles computers. Over time, Google will increase the functionality of its offering, possibly charging small amounts for "a-la-carte services like video chat or more storage space.

Google Apps is a great example of a disruptive technology that is not necessarily cheaper, but optimized for a different dimension of performance. Amortizing the typical discounted $150 Office license over three years, Googles offering is not saving businesses millions over Microsoft Office. If you measure price alone, OpenOffice, the free open source suite of applications is more cost-effective than either Microsoft Office or Google Apps Premier Edition. However, Google Apps makes it easier for businesses to share their documents internally. CTOs, such as Gregory Simpson of GE, are attracted to Googles web expertise and ability to enable employees to better collaborate, a feature other competitors seem to neglect.

We agree with Google CEO Eric Schmidt who stated that Google is not directly competing with Microsoft, rather that "the two worlds will coexist for awhile. With a "good-enough technology that requires an Internet connection and a tremendous shift in buying habits, Google Apps will continue to attract small businesses and departments within large companies while it profitably builds its product to meet mainstream needs.

See "Google Further Tests Microsoft's Domain. WSJ. February 22, 2007. Page A4

February is American Heart Month. In honor of this we thought we'd pick up on an Innovator's Insight written by Scott Anthony in April 2005 on the Philips home heart defribillator. The home defibrillator is a $1k home-version of the technically-sophisticated defibrillators used in hospital emergency rooms to restart the heart of Sudden Cardiac Arrest victims. The device gives regular untrained people ("nonconsumers of the professional versions) the ability to save a persons life. Heartwarming Automatic External Defibrillator (AED) success stories have been in the news lately as offices, gyms and schools are beginning to require installation of the devices.

A natural extension of this home kit is providing AED/CPR training to this new group of consumers. Philips Medical doesn't seem well positioned to provide such training as a company that sells medical equipment through sales reps to hospitals and medical professionals. Creating a low-end training program targeted at homeowners and office workers is not part of Philips business model. Recognizing the importance of the training, Laerdal Medical and the American Heart Association created The Heartsaver AED Anytime program. It is a self-directed learning product designed to provide condensed, science-based training to get more people trained in CPR and the use of an AED in just 2 hours. The course includes device-specific training on the full line of Philips HeartStart Defibrillators. The kit sells for anywhere between $34-$70 online. Philips is able to distribute the training program by innovating their business model. Instead of selling a Philips-branded high margin durable through sales reps to medically-trained professionals, they are distributing low-end training that is produced and marketed by another company. By partnering with another company and distributing the product online, Philips is able to provide a valuable services to a group of customers in a market that it traditionally does not serve.

Recognizing that their traditional high-end interior design services were overshooting the vast majority of the market, both in price and level of service, Burnham Design created a low-end service offering called "Instant Space."

With some digital photos, some basic measurements, and a set of magazine clippings to determine taste and color preferences, Burnham goes to work, delivering a design-in-a-box, complete with swatches, paint chips, furniture plan and a professional-looking concept board in 4-6 weeks.

It's fascinating that this classic disruptive strategy emerged from a high-end player in a highly disaggregated market. What's next? Decorating Garanimals from IKEA?

We wrote in December about the trend of dermatologists adding cosmetic procedures to their services as part of the larger trend of medical procedures moving from specialized to general practitioners. Continuing the trend even further, cosmetics companies are hard at work disrupting the dermatologists by launching products nipping (and tucking) away at some of the simpler medical procedures.

According to the American Academy of Plastic Surgeons, minimally invasive procedures like Botox, laser skin resurfacing and injectable soft tissue fillers are the largest and fastest growing area of cosmetic medicine. From 2000 to 2005, these procedures grew 53% to just under $8.5 million compared to a 5% slight decline in actual surgeries to under 1.8M.

Its not surprise then that one of the fastest growing of the minimally invasive procedures, lip augmentation, is squarely in the sights of the cosmetics industry.
Medical grade injectable fillers like Restylane cost between $500 and $1000 per injections and work for around six months before they are absorbed by the body. Beauty companies like DuWop and FusionBeauty, have launched "good enough topical varieties aimed at non-consumers that work for around six to 48 hours and cost less than $50. The topical products work in a variety of ways. Some, like DuWops aptly named Lip Venom, coat the lips with a mild irritant which reddens the skin and promotes blood flow to the area a little like the sting you get eating a hot pepper. More sophisticated formulations claim to affect collagen or hyaluronic acid, a compounds produced naturally by the body that keep lips and skin full and which decrease with age. (Both compounds are staples of doctor-performed injectable procedures.) One of the most popular products, LipFusion, which hit the market in 2005, claims to use hyaluronic acid and dehydrated "marine collagen microspheres which are absorbed by the lips and attract moisture. Yes, you are plumping your pucker with fish goo.

The sales figures for these projects are similarly fat. At beauty retailer Sephora, sales of plumping lip glosses rose from $1.7M in 2003 when DuWop hit the market to over $34M in 2005. During a Sephora holiday gift show on the Home Shopping Network in 2006, LipFusion products sold out in less than five minutes.

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