G
oogle 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
Google Apps Ready for Disruption
Steven FransblowPosted by Steven Fransblow in Comments (4)
Discussion
Posted: Wednesday, February 28th, 2007 - 7:49 am EST
I agree with this. When Google first formally announced this, the fact that this was going to be disruptive immediately came to mind -- for the reasons you've already outlined.
I'd further add that given Microsoft's position with Office, they will likely allow themselves to be disrupted because the low end of the market is not "interesting" and they're turning Office into a "platform" for others to build on top of. Basically, Office is getting more and more complicated despite having already overshot the needs of the "average" customer.
This is about as classic an example of "The Innovator's Dilemma" as we've seen in a while in the software world.
Posted: Wednesday, February 28th, 2007 - 4:29 am EST
Google Apps is much more about competing with MS Exchange then MS Office. And here in this case its very powerfull.. specially because of its API. For example we are now developing an FREE open source "business application platform" (think salesforce.com). Our first application is working tightly integrated with GOOGLE APPS. Check it out if you are interested. http://www.applicationexchange.com
Posted: Sunday, March 18th, 2007 - 5:15 am EDT
For small and micro businesses, Google's stuff is a lifesaver. The price of a conventional office package is in *no* way comparable with Google's premium-service fees, since you still have to add the costs of hosting, installation, patch management, upgrades, backups, data security,... those all take time and money /far/ exceeding the simple licensing costs. IMHO, not even OpenOffice competes on that basis.
Posted: Tuesday, August 14th, 2007 - 4:48 am EDT
In recent days, Google, Microsoft, and Apple have all announced new online storage offerings. Approximately 17 months after Amazon.com launched its own "Simple Storage Service, the widening race to stake claims in remote storage heralds the impendi
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