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Should Microsoft Fear Google Apps?

Can Microsoft convince customers to upgrade to the full version of its forthcoming Office 2010, due for release May 12?

While that question has been looming large for awhile, today The Wall Street Journal's Nick Wingfield once again raises that specter focusing on the formidable challenge from Google. Wingfield said "Microsoft seems to be staring down the Google threat," pointing to wins by General Motors and Starbucks.

Google has 25 million Google Apps customers, though Gartner says only 1 million are paying customers. The report says there are 40 million paying Microsoft Office online customers, a small but noteworthy fraction of the hundreds of millions of Office users.

With Office 2010, Microsoft is adding its own Web-based client that will extend the use of apps such as Word and Excel to the browser. Moreover, Office 2010's ability to link to the forthcoming SharePoint Server 2010 will make the two a unique pair of products that will enable new levels of collaboration within enterprises and among extended work groups (for a deep dive on Office 2010 see the cover story in the current issue of Redmond magazine).

Microsoft appears to be shrugging off Google Apps as a threat to its Office franchise. But Silicon Alley Insider editor Henry Blodget begs to differ, writing "Microsoft Should Be in Major Panic Mode." Why? Blodget argues that Google has improved the capability of its offering and that many Office users will migrate. Microsoft can add more features, he argues, but those will appeal to a small subset of overall users.

"So don't take the puny size of Google's App business and the fact that big companies aren't seriously considering Apps as an alternative as a sign that Microsoft is safe," he writes.  "Microsoft isn't safe.  Microsoft is very exposed."

Since launching its partner program last year, Google recently reported that it has signed on nearly 1,000 solution providers. One of them is Tony Safoian, president and CEO of SADA Systems, who is both a Microsoft Gold Certified Partner and a member of Google's program. Safoian appeared last week on a Redmond Channel Partner Webcast hosted by editor-in-chief Scott Bekker.

"We feel like there are customers that are a great fit for Google and culturally they may be a little different," Safoian said. "And there's customers who will never get away from a desktop oriented experience or they just love the Outlook interface and they've invested a lot in that technology. We are just being honest and faithful to the market in being able to speak intelligently about both solutions and being able to offer whichever one makes the most sense."

Are you looking to upgrade to Office 2010? If so, why? Or should Microsoft be in panic mode? Drop me a line at

Posted by Jeffrey Schwartz on 03/29/2010 at 1:14 PM

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Reader Comments:

Sun, Apr 25, 2010

I think an important distinction between small and large business needs is being glossed over. In particular I am thinking of the lack of "great" options for small businesses who need the same level of dependability that the large companies demand but lack the time, resources or knowledge to deal with hosting thier own exchange server. That leaves small business considering a shared hosted environment. On face value this looks like a good deal but its not terribly cost affective if you are in that 1-8 email users band. Add to this the fact there seems to be no hosting services that provide a "superior" experience if you believe the reviews posted randomly on the internet. This leaves the small shops to go back to looking at web email solutions, which just doesn't provide the features that many small businesses want or something like google apps which provides a lot of value for what it costs. It may not be what you want, assuming you want an Outlook experience, but it easily fits your "needs" at an attractive price and it has numerous productivity hooks such as being possible to integrate with salesforce (not unlike outlook).

Fri, Apr 9, 2010 Leonid S. Knyshov Silicon Valley

Microsoft needs to focus more on educating the customer base on the advanced features of Office 2010. As Office consultant, I constantly see questions from customers asking about alternatives and whether Google Apps is right for them. I know the true value of Office applications, but most people do not have the slightest idea of what they can do beyond the basics. Google Apps offers those basics. Microsoft needs to spend its marketing dollars to highlight the "beyond-the-basics" functionality that ultimately increases productivity and profits for the business. They are making at least one substantial blunder already with the 2010 release. BCM is a product they can't decide what to do with - previously unavailable to volume customers (in fact, it was available, but that was well-hidden). Now - exclusively available only to volume customers. End result - looming PR nightmare when 2007 customers will try to upgrade.

Tue, Mar 30, 2010 lm home

hey, you're soooooo right, like in politics, according to your vision, google like the republican party of NO'ers,is the only company that has any usefull products and whose services are the only viable services anyone can and needs to use. Microsoft is this HUGE MONOPOLISTICE GOOD FOR NOTHING company and as such we need to goverment to break it up or better yet destroy it. yeah...)

Tue, Mar 30, 2010 Leland Holmquest

I can't wait for the release of Office 2010. My work is tightly coupled to SharePoint and Team Foundation Server 2010. Therefore, there is no productivity suite that can even compare to Office. Additionally, when you couple Unified Communications via OCS, I don't know how anyone can even think of making the comparison. Now, certainly, if known of that means anything to you, then Google Apps is probably worth a look. And I don't believe that Microsoft should lose any sleep. Just my thoughts.

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