Does Google have its head in the clouds?

Yesterday the New York Times said "Google Ready To Rumble With Microsoft", referring to Google's foray into online Office Apps. Today a survey from NPD says 73% of PC users have never heard of Google Apps, and another 21% have heard of them but never used them. Just one half of one percent said they use web based apps instead of desktop software.

Google CEO Eric Schmidt was asked by the New York Times if he really believed that 90% of all computing would be done in the cloud. Schmidt's response?

“In our view, yes,” Mr. Schmidt says. “It’s a 90-10 thing.” Inside the cloud resides “almost everything you do in a company, almost everything a knowledge worker does.”

The NPD survey supports what Microsoft's Jeff Raikes said in response to Google's claim;

“It’s, of course, totally inaccurate compared with where the market is today and where the market is headed,”

It is fair to say that Google has its head in the clouds. (pun intended) That is a fine place to be if you are a web search company, but that is not where office productivity software is now, or will be anytime in the near future. Google's arrogance will be its undoing. Their total reliance on internal Google engineers while ignoring customer feedback, and their lack of experience in direct sales and customer support, will not work in the business software world.

Duncan Riley at TechCrunch is singing the Google song. He proclaims "Majority of Americans on Google Docs" and says "...given the online alternatives there is little doubt that the number making the switch to online apps will continue to grow."

Joe Wilcox at eWeek takes the other view with the provocative headline "R.I.P.- The Web 2.0 Office Suite" The eWeek article included this pie chart of survey responses.

 

The eWeek article goes on to say; "The scant adoption makes some sense of Microsoft's Office Live Workspace, which went into broad beta last week. The service clearly is designed to be an adjunct to Office desktop software rather than a Web-based alternative. If NPD's numbers are indicative of real-world usage, Microsoft hasn't much to worry from Google Docs and Spreadsheets or other online alternatives. Maybe too many people make too much about the Web 2.0 threat to Office. "

Mary Jo Foley of ZDnet gets it right when she says;

To me, the way that Microsoft is addressing the so-far small number of users who want Web-based productivity software is disruptive. Microsoft isn’t listening to the venture capitalists and A-list bloggers who are ridiculing the Redmondians for not discontinuing immediately any more client-based Office development and turning Office into a Web-based product.

Instead, Microsoft is doing what the majority of productivity-suite users currently want, by adding a Web-collaboration element to Office with Office Live Workspace. At the same time, Microsoft also is sowing the seeds for a Web-based consumer office suite with the Notes and Lists components of Office Live Workspace. If and when there’s enough customer demand for such a product, Microsoft won’t be starting from scratch to build a Web-based suite.

Not rushing headlong into a bubble-licious market doesn’t equal denial. Sometimes resisting peer/pundit pressure can be pretty disruptive, too….

As I said yesterday, Microsoft has played the role of market disrupter before against IBM and the mainframe software crowd. Microsoft has adapted to many market shifts and disruptions over the past 20 years.

Microsoft has a long history in enterprise software and office productivity applications. Microsoft has done a great job listening to customers and even anticipating their needs. The recent announcements from Office Live and the investments in massive data centers signal where Microsoft is going.

Software plus Services as opposed to Software as a Service. Microsoft is giving customers the best of both worlds; powerful desktop software, complimented by web based services. It may not make headlines with the Web 2.0 crowd, but it is the best path for customers who want the best of both worlds.

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Comments

[Joe Duck]

Don you misread Duncan's clever title because you appear to have missed too many 1980's TV sitcoms and Gary Coleman quotes. Duncan meant most are UNfamiliar with Google docs.

[naren]

s/w+service makes sense than SaaS because Internet speeds to our homes are not getting faster as google expects it will be,

msft is doing the right thing.combine the desktop with the web.Move some PART of the office desktop to the web.This PART is most likely collaborating,security and reliability as the web is really good at these things.this helps in getting the best out of the web and the desktop.

[Patrick Fritz]

In my opinion Google CEO Eric Schmidt only told us his vision of the future and as a CEO of a search engine company he has to do so (90-10). He never really said where the market is actually. Think of this scenario: No real differences between offline and online office (regarding functionality), but google offers their servie for free!?

[Don Dodge]

Joe, Thanks for the clarification on Duncan's headline. I never watched the show so I didn't get the humor.

Patrick, I hear you but remember that Google Apps are NOT free for business use. Google charges $50 per user per year. After 4 years they have paid $200...about what an enterprise pays for Microsoft Office (in volume)...so I don't see the savings.

[Jay]

Don,
Before you write off the "cloud" stuff as a loss, don't forget about "gOS" which was a big hit with the Wal*Mart PC crowd...

http://www.thinkgos.com/

Frankly I have to believe that if it's good enough for "techies" shopping at Wal*Mart then "data in the cloud" is going to quickly become good enough for the rest of us.

Also consider this link;
http://designnotes.info/?p=1209

Michael Surtees is a pretty accomplished designer and he points out how the abilities of his iPhone, which becomes his 'data in the cloud' interface has changed (for the better) the way in which he works.

And the iPhone's just the beginning ...

[Dan]

You're absolutely right. Google is lost. Google apps are fun to play with in the Wiki sense, but seriously lack the finishing qualities that make Office a business tool. I start a lot of brainstorm or data collection exercise in a google doc, but end up moving its contents to word or excel to make it useful.

Google has a LONG way to go. And, not to mention, don't use Google's powerpoint; it'll leave you lost and frustrated in 5 minutes - I mean no drawing support?

[Rob Toole]

I think Jay's post is right on the money. A few weeks back I thought my laptop was stolen out of my car and was initially upset.

Then it occurred to me that I had probably 90% of the data either backed-up online or on a variety of storage devices (iPod, USB sticks, firewire drives). Luckily, since the computer didn't have any truly sensitive data on it, I wasn't in danger of getting my identity stolen.

If this was five years ago, losing my laptop would have been devastating since it would have had literally everything on it. But now a majority of my video, pictures, music, docs, etc... live out on the net and on portable devices. If my laptop was stolen, the only thing I really lost (besides my $1300 hardware investment) was my apps, all of which were licensed and recoverable.

Make those apps robust and readily available to me from any PC anytime and you won't see me carrying a laptop anymore, and next generation portable devices will be there to fill any of the void left over.

By the way, the laptop wasn't stolen, just left somewhere it shouldn't have.

-Rob

[Agence casting pour Enfants]

Really interesting post!
Never stop iterating and don’t fear failure. Choose well-understood conventions where they will do to the most good , shortcuts you might take will cost you more to fix later than to try to get right up-front today.

Thanks , Zoli Juhasz