Google may deny it, but the Microsoft battle is on
Not all that long ago, Google executives would routinely disavow any plans to use the company's various Web-based services -- which offer free e-mail, an online calendar and a document-editing tool, among other things -- to compete with Microsoft's market-dominating Office suite.
As recently as April, in fact, Google CEO Eric Schmidt told the Web 2.0 conference "I don't think we compete with them." That comment came just after the company announced that it was going to add a PowerPoint-style presentation feature to its suite of online tools.
By now, it seems fairly obvious that Google is competing with Microsoft's Office, although the question of whether online applications can stack up against a full-fledged desktop software package continues to be the subject of heated debate.
The latest sign that the competitive pressure might be ratcheting up came this week, when Google announced a deal with France's Capgemini, a large IT management company that specializes in helping corporations with their software needs.
Under the terms of the arrangement, Capgemini -- which has about $10-billion (U.S.) in revenue and a roster of large and medium-sized corporate clients -- has agreed to market the company's Google Apps Premier Edition as one of its business offerings.
Google Apps Premier Edition includes Web-based mail with 10 gigabytes of storage for each user, an instant-messaging and voice-calling service (GTalk), Google's online calendar, the Google Docs spreadsheet and document-editing service and other features such as Google Page Creator (an easy Web design tool).
The Google suite costs $50 a user annually, while Microsoft Office costs about $1,000 a user, once you include upgrades, training and other related costs.
Some analysts called the Capgemini deal a clear shot across the software giant's bow. "This move is squarely aimed at Microsoft," Forrester Research analyst Ray Wang told Investors Business Daily. "Google went out and found some trusted advisers with relationships with the enterprise market who have been providing these services already."
Google's move into the corporate arena seems to be raising some hackles at Microsoft's Redmond headquarters. After the Capgemini announcement, Microsoft released a statement to the media with a list of suggested questions to ask its competitor, all of which were designed to point out the weaknesses of an online Office-style suite as compared with a desktop suite.
Among other points, the release focused on the fact that Google Apps all require an Internet connection, and therefore can't be used when a person is offline (although Google does have a feature in beta testing that caches data for offline use, and then synchronizes that data with its online services once a user is online again).
It's not surprising that Microsoft would focus on that particular issue, since it is one of the main weaknesses of an online Office suite. Another concern for companies is security, since their data is hosted on servers that belong to Google (or Zoho or ThinkFree, two of the other companies that offer Office-style services similar to Google's).
Microsoft's release also noted that Google's services tend to be in "beta" mode for long periods of time, and that corporate software is a sideline for the company, whose main business is Web search and the advertising related to search terms.
Google's Office-style services exist "on the very fringe, and ... only account for 1 per cent of the company's revenue," the software company said. "What happens if Google executes poorly? Do they shut them down, given it will only cost them in a minimal and short-term way? Should customers trust that this won't happen?"
Those concerns and others - such as the need to retain a "document trail" for legal or securities-related purposes - are likely to keep large companies away from Google's services. At the same time, however, many employees are using Google's Web apps as a way around what they see as overly restrictive corporate IT requirements, and that trend is likely to continue.
In many ways, Google's CEO is right - the company's applications don't really compete with Microsoft's Office. That's because Google's services are primarily about being online and using the Web to enhance collaboration, while Microsoft's software remains anchored to the desktop, with very few collaborative features.
But as Microsoft turns to the Web to enhance Office, which virtually everyone agrees it must, one thing will become increasingly obvious: Google may not be competing with the software giant right now, but it is already where Microsoft eventually wants to be.
