Google is finally saying “I do” to online productivity suites. Google has been beta testing a new service called Google Apps for Your Domain – a service that lets companies use Google email accounts with their own domains. Additionally, it bundles a customized start page, Google Talk, Google Calendar, and Google Page Creator. Now, they’re about to add more products to this service, including:
- Word-Processor
- Spread Sheets
These last two additions are a clearly challenges to Microsoft’s Office suite.
This new service will supposedly cost only a few dollars per user per month. Apparently this beta product is already quite popular.
It’s testament to Google’s popularity that even though Google Apps is still in trial mode, hundreds of thousands of users at thousands of organizations are already using it. That includes a few big ones. Arizona State University plans to switch most of its 65,000 students to Gmail, Google Calendar, and a customized “start page” this month.
It’s strange that Google has opted to charge for this service. Google has come so far by giving away most of its products. Charging for this suite is a stark change in philosophy. By hosting documents, emails, chats, home page preferences, and search requests you’d think Google would have no need to charge more for its service.
But then again, perhaps the issue is that businesses typically don’t trust “free,” much like how open source got the cold shoulder for many years before catching on as it did today (IBM, Novell, Redhat, etc.). So maybe the goal here is to charge enough so that it’s not looked at like a cheap gimmick, but not so much that it becomes substantial.
If Microsoft doesn’t make a move into the online office suite soon, they may find that their share of the pie significantly smaller than they had hoped. After all, business users are all about momentum and using what works. Just go to your local bank to see how averse businesses are to changing their software (they still use black and white keyboard applications). Microsoft knows this best since it’s what keeps them so dominant in the first place. Virtually every customer that Google gets now is a permanent customer now and forever.
And yet, Microsoft can’t spring into action without potentially cannibalizing their desktop Office market (their #2 cash cow after Windows itself). We should expect a response from Microsoft in 2008 with their next version of Office, I imagine. It will likely integrate with a desktop Office to create a new hybrid online-desktop application. But that may become a complicated endeavor if Vista’s sales among businesses continues to drag its feet.