Premier Apps Set To Take On Microsoft Office

    February 22, 2007

With the launch of premium business applications, Google appears poised to challenge Microsoft for supremacy within the enterprise realm – a field that Bill Gates and his Redmond-based software company have dominated for nearly two decades.

Most have seen this move as inevitable, given Google’s recent efforts to increase awareness of its Docs & Spreadsheets, along with the announcement that beta tag had been lifted from Gmail. And although the company has previously made statements to the contrary, Premier Apps can only be seen as a means of directly competing with Microsoft.

In its freeware state, however, analysts have questioned the ability of products such as Docs & Spreadsheets when it comes to advanced functionality, a staple of Microsoft’s Office Suite. With Premier Apps, Google looks to be addressing those criticisms by offering a beefed up version of its products, which according to the company, can be tailored to fit the needs of any business.

New features unique to Google Apps Premier Edition include:

· 10 GBs of storage per user – Offers about 100 times the storage of the average corporate mailbox, eliminating the need to frequently delete email.

· APIs for business integration – APIs for data migration, user provisioning, single sign-on, and mail gateways enable businesses to further customize the service for unique environments.

· 99.9 % uptime – Service Level Agreements for high availability of Gmail, with Google monitoring and crediting customers if service levels are not met.

· 24×7 support for critical issues – Includes extended business hours telephone support for administrators.

· Advertising optional – Advertising is turned off by default, but businesses can choose to include Google’s relevant target-based ads if desired.

· $50 per user account per year – Simple and affordable annual fee makes it practical to offer these applications to everyone in the organization.

Did you catch that last bullet point? That’s right; Google is going to offer Premier Apps for only $50 a year. This strategy above all others could be the deciding factor that makes Google a real player in the enterprise software game.

Pat McDougall of Information Week echoes this thought:

[P]ossibly the most compelling aspect of Google Apps — at least from the standpoint of potential customers considering a switch from Microsoft products — is the price. Google is offering the whole package for just $50 per user, per year.

Microsoft does not publish volume licensing prices for the Enterprise Edition of Office 2007, its latest entry in the office productivity market. The price of a standalone copy of the Professional Edition is $499.

How are the folks in Redmond reacting to Google’s low-cost alternative? We’re not sure yet, but my guess is that Mr. Gates is probably taking this whole thing a bit more seriously now.

“I think Microsoft should be very concerned about this,” said Rebecca Wettemann, vice president of Nucleus Research in a New York Times article.

The Times goes on to offer perspective on how the differing cost has legitimate impact in the enterprise setting:

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.

If cost is the primary selling point for Premier Apps, then customer support follows as a close second.

"When it comes to our email systems, our doctors don’t have the time or the budgets to deal with managing technology or defending against spam," Andrew Johnson, chief information officer, San Francisco Bay Pediatrics said in a statement.

"With Google Apps Premier Edition we don’t have to worry about downloading the latest spam filters or navigating unwieldy servers. This is where we let Google do what it does best, so we can do what we do best – help our patients."

It’s clear that Microsoft has all but lost the search war to Google. It may be a bit premature to predict a similar outcome in the realm of enterprise applications, but this much is clear: Google is coming out of the corner swinging.

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