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February 26, 2007

Google Apps Premier Edition

Google announced last week that it was offering a business version of its free Google applications.  For $50 per employee per year, businesses would get email, word processing, spreadsheets, 10 Gigabytes of storage and no ads.  The free consumer package is ad supported and comes with 2-3 Gigabytes of storage.  There's also GoogleTalk (IM) and calendaring.  Google also offers 24x7 support for critical issues with extended business hours telephone support for administrators, and a 99.9% uptime promise with customer credits if that level is not met.

One thread that's not running on the commentary about this offer is that its an Office killer.  Microsoft has over the last 15 years or so killed or marginalized competitors such as Lotus and WordPerfect to be pretty much the only game in town when it comes to integrated office applications.  Each successive version of Microsoft Office has newer and richer features, some of which get used and some of which do not.  That's actually the strength and weakness of Office. It can do so much, but most users don't need all of the features Microsoft crams into the applications.

Take PowerPoint for example.  It can weave web links on slides, embed media, and screens are programmable.  However, most presentations using it are flat and static, acting only as an outline of the talk.  That's the fault of the presenter, not Microsoft.  But still, the ultimate cost of Office reflects the inclusion of those features whether used or not.

Google says they're not competing with Office, rather suggesting that it makes a great compliment to the suite.  That's true to some extent.  The behemoth corporations that are Microsoft's bread and butter for Office sales are not the likely target for Google Apps, although Proctor & Gamble and General Electric are taking a look.  These companies get substantial discounts from Microsoft.  There are, however, mid-sized businesses that still pay between $350 and $400 for an Office license.  Companies such as these may evaluate the feature set per cost and may pull back their MS dollars in favor of Google.

Microsoft points to other Office alternatives that have failed to build traction, StarOffice and OpenOffice among others.  Sure, these are free or low cost alternatives, but they come with a "you're on your own" support system.  Google on the other hand is pretty established and can respond to customer issues.  Google can leverage its reputation and ubiquity in a way these past Office alternatives cannot.  And unlike Office, Google Apps are not platform dependent.  The same version shows up if the machine is a Mac, Linux, or the variations of Windows.  File format looks not to be an issue as XML documents are becoming standard.

Microsoft may not have anything to worry about when it comes to selling Office to GM, but it may have problems with the smaller markets and individuals.  If that's the case, then competition is good.

February 26, 2007 | Permalink

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