Google Apps takes on Microsoft Outlook and Office

Google today announced Google Apps which includes Gmail, Calendar, IM, and Google Docs and Spreadsheets. The pakage includes 10GB of storage and telephone support, all for $50 per user per year. Google Apps Standard Edition remains free. Here is a comparison of the features. All the usual suspects have stories including TechCrunch, Cnet, InformationWeek, and The New York Times.

The New York Times says "

While most analysts say that businesses will increasingly use software delivered over the Internet and supported by advertising — a formula that Google has mastered — they are split over the threat that Google’s offering represents to Microsoft in the near term.

“I think Microsoft should be very concerned about this,” said Rebecca Wettemann, vice president of Nucleus Research.

Ms. Wettemann noted that a business may spend about $80,000 on a systems administrator to manage e-mail and desktop office software. For the same amount of money, Google Apps allows a business to support 1,600 users, she noted. Simply in terms of staffing, “this may be a better proposition even if Microsoft were free,” Ms. Wettemann said.

Mark R. Anderson, an analyst at Strategic News Service, a technology consulting firm, said Microsoft should worry about Google’s inroads into one of its core businesses but would not see an immediate impact.

“These things take years to happen,” Mr. Anderson said. “Google will have to prove itself in terms of security and in terms of quality.”

Fortune Magazine has an interesting take;

The days are gone when Google announces a product and the competition trembles. Google's enterprise ambitions are modest. It's unlikely to dislodge more than a fraction of the 450 million users of Office. Even a rousing success would barely move the needle for Google. If all 100,000 of its current users signed up, for example, it'd mean an additional $5 million in annual revenue. That won't even help defray food costs at Google's cafeterias.

Google Apps is missing some fundamental features. First, there is no Powerpoint presentation equivalent. Second, there is no answer for offline usage. Third, privacy and security are still significant issues for web based apps. Google has done nothing to address those concerns. Fourth, and most importantly, there are just a lot of missing features in Docs and Spreadsheets. This is understandable given how new they are, but users are very demanding and have become accustomed to powerful, intuitive features in Microsoft Office.

Email is easy. Gmail is a reasonable alternative to Hotmail or Yahoo Mail, but it doesn't compare to Microsoft Outlook. Even Microsoft's online version of Outlook called Outlook Web Access is far better than Gmail. Another issue is keeping your email contacts and directory information synchronized with your corporate directory. Outlook and Exchange do this seamlessly. Ask yourself how would Gmail handle new employees joining the company or leaving the company? How does the Gmail contact list get updated?

Office Excel, Word, and Powerpoint are world class. I have tried using Google Docs and Spreadsheets and it is a frustrating experience. Obvious features that you have come to expect just aren't there. Some of them are simple, some are very subtle, and some are for power users, but all of them are not available in Google Docs and Spreadsheets. They are too numerous to list here but they are simple things like formatting cells, editing formulas, and quick features and icons we have come to expect in Office. I encourage you to try out Google Docs and Spreadsheets to see for yourself.

Software plus Services is Microsoft's strategy going forward. There are already some shipping products that illustrate what can be done, but Ray Ozzie's team is working on ne Office Live products that will change the game. The key is to have a seamless user experience across client/server and web services. The user interface must be intuitive and similar across the continuum, and your "user state" must be synchronized across all the usage scenarios. This means that when you move from the Outlook email client to the Outlook Web Access service it recognizes what you have already read, your calendar is up to the minute, it recognizes what alerts you have already responded to, and any last minute changes. The same synchronization must happen across Microsoft Excel, Word, and Powerpoint. It shold be seamless to transition back and forth between your data on your laptop and data on your online hosted version.

Microsoft Office has 450 million users worldwide. Microsoft takes the Google challenge very seriously and has already released Office Live. There is a lot more innovation coming soon. Google Apps will be attractive to some segments of the market where price is the number one factor, or where privacy and security are not an issue. But for most businesses Microsoft Outlook and Microsoft Office will remain a very important foundation for running their business.

Comments

[CJ]

You lost all credibility when you said that Gmail "doesn't compare to Microsoft Outlook. Even Microsoft's online version of Outlook called Outlook Web Access is far better than Gmail." Both of those statements are simply not true.

You talk about the missing features in Docs & Spreadsheets, but when it comes time to elaborate, you say "They are too numerous to list here". The few examples you do give, "formatting cells, editing formulas, and quick features and icons we have come to expect in Office" are, again, simply not true.

It's pretty obvious that you work for Microsoft.

[TanNg]

Why bother compare Google Apps to MS Office. Google Apps should be compared to Wordpad, Outlook Express, ....

Google Apps = easy sharing of very simple documents.

[Andrew Watson]

Don,
You might add to your contrast between Google and Microsoft the support for OpenID...
Andrew

[Steve Morsa]

Ho hum...more undeserved front page "news" media attention for another boring, uninspired, and minimally useful Google offering that will likely never even cover their bandwidth, storage, "customer service" (an area "algorithms-only please" Google's notoriously poor at providing) and other operational costs...

...and any company--of any size--foolish enough to entrust important content, information, data, and communications to them may someday pay dearly for their pennywise, pound foolish decision.

Just wait until the news reports start coming out when businesses' entire records get wiped out...and the govt and legal eagles start grabbing--quickly and with great ease--these same records for all kinds of purposes...

I know I'll never use it.

If this "offering" was from any company other than Google, does anyone really believe that anybody but the tech blogs would be reporting on it?

And the effect "Apps" will have on the existing office suite marketplace?

Virtually nil...nada...zilch.

Google Apps? D.O.A. R.I.P.

[Mark Zanzig]

Don,

while I guess that you are wearing your Microsoft hat while writing this post (opposed to a more neutral fashion for other topics), I have to agree 100% with you this time.

1- Corporates are VERY concerned about security, especially for email, communications, and data storage. The vision of Google having access to ALL emails (with attachments) and documents is simply a nightmare for any IT department. They will simply not greenlight any move into this direction. IMO most companies would rather lay off people or get otherwise more efficient than giving away the keys to their business.

2- EVEN IF a few companies actually decide to switch to that Google online package, users will probably NOT become more efficient. Functions are not where they used to be, collaboration may be more difficult, results may look different, offline use is apparently impossible. There is a chance that normal users (not Tech-savvy users) will not like this. Ah, this reminds me of a former company where I was forced to use Lotus Notes for email and calendar stuff. We all were suddenly incredibly inefficient, exactly something we did not need at that time.

3- The business case looks surprisingly bad. OK, a company may save $80,000 on an IT administrator working for, let's say, 200 users. That's $400 per year per user. A saving of $350 per user per year for switching to Google. Not bad. But wait! the same 200 users cost the company $10,000,000 in salaries (again, just an assumption). These guys work 200 x 220d x 8 hrs x 60 min = 21,120,000 minutes. IF they are delayed by 10 minutes per day, e.g. by having to work around bugs or by trying to figure out how to do things, the company loses 200 x 220 x 10 = 440,000 minutes or roughly 2% of the work force. This amounts to $200,000. Seems that the IT admin is cheaper or at least equally expensive.

So, given the neutral business case AND the security risks AND the barking users, I'd immediately decide for MS Office. There will be a lot of companies around the world who will do the math and come to the same conclusions.

(Also, there is a certain stability with a business relationship to MS. Google is less known, and the price MIGHT go up once a company has switched to their package and all the users have been trained on it.)

[Stephane Rodriguez]

Ah ah!

Mr Dodge is so out of touch, it's almost sad.

Watch Google ship many major releases before MS Office ship one.

Watch Google swallow MS Office market share as people realize that simpler, more integrated, web-only, secure, thiner, almost free products disrupt the old bloated crap that is being forced upon us with MS Office. Especially when you know that Office 2007 has many new incompatible file formats. Ah ah ah again.

[rolf mistelbacher]

google's gmail should be compared with windows live hotmail. gmail is much much better than live hotmail. outloook web access is more for the business user, and not compareable with gmail (which is fun to use for private mailing)