Google Apps To Start Making Actual Money
According to an article in the latest issue of BusinessWeek, Google will turn Google Apps For Your Domain into a subscription service for corporations sometime in the next few weeks. If true, it would turn the service (which offers services for company domains, currently Gmail, Google Talk, Google Calendar, and Blogger, and is expected to add more services) into an actual revenue generator for Google, a rarity for a company that many say needs to diversify its earnings.
Soon, it’s expected to add word-processing and spreadsheet services to the suite, which includes an online calendar, chat service, and Web page builder. In coming weeks, Google Apps will turn into a real business as Google begins charging corporations a subscription fee amounting to a few dollars per person per month. “We’re dying to use something like this,” says Brandeau. He’s “on the cusp” of signing a contract with Google.
I still don’t see companies dumping Microsoft Office for Google’s solution, even if it eventually has email, calendaring, a word processor, spreadsheets and presentations. Google’s solution, at “a few dollars per person per month”, (assuming that is anywhere from $3-7 a month) amounts to a cost of $36-84 a year per employee for a product with similar capabilities to Microsoft Office 2007 Standard, which costs $239 to upgrade (and considerably less to businesses who use volume licensing).
Considering that (a) Google’s office products require and internet connection (b) companies don’t like giving up their data, even to Google (c) companies take years to upgrade for one version of Office to the next, I can’t see a company using Google Apps when they can use Microsoft Office, which is going to be positioned as the more powerful and flexible option, for an equal or lower price. Why would you buy less features, when Google’s subscription rate isn’t actually cheaper than Microsoft’s retail price?
(via Ars)
1) I hope Google doesn’t figure out how much money one can make by creating a vendor lock-in - which they already seem to be working on.
2) Microsoft Office isn’t the only thing they’ll be competing with. Remember OpenOffice? Free… Lots of features… Yeah. I’d have to say I’m slightly challenged to figure out what companies - other than Google - will use it. And why, too, but I guess that’s because I have so little (next to none) experience with Google’s Office-like products.
Comment by Tim | February 11, 2007
Add on Google’s notoriously bad customer service, and you have a real loser with this one.
Comment by Hashim | February 11, 2007
It says on the apps page login that the beta.
Comment by Dr. FeelBad | February 11, 2007
Whetever the relative merits of using Office vs a hosted solution from Google might be, the cost benefit of a hosted solution is, I think, beyond debate. Your math above is an apples to oranges comparison, because it compares the cost of a service (Google) with the cost of a license (MS Office). The correct comparison is between the cost of Google and the sum of: MS Office licenses and ongoing operational costs. When you factor in the cost of IT staff, cost of patching, dealing with availability issues etc, the service model will win every time.
Comment by Rahul Roy-Chowdhury | February 11, 2007
Don’t forget you still have operational costs when you use Google Apps - you still need an access point with internet access. You’re implying that the added cost of having to service Microsoft Office, PLUS the Office license is higher than the recurring cost of Google Apps FYD over a period of time equal to the time period you would be using Microsoft Office.
I maintain that OpenOffice will turn out to have the lowest TCO, simply because I don’t think the added cost of having to service OpenOffice is not that much higher than servicing the workstation itself - it’ll probably need a working internet connection anyway, these days.
Obviously, neither Google Apps nor Microsoft Office nor OpenOffice will ever be able to be the best pick for all possible deployments.
*speaking as someone who uninstalled Office yesterday and now misses Links, the Windows Search Assistant that comes with Office
*
Comment by Tim | February 12, 2007
Beyond debate? Hardly! We can debate this one for years. Both are apples, not apples and oranges, just with different install and payment models. The comparison is between the sum of MS Office licenses and the sum of Google monthly payments, and, on the MS side, dealing with patches and installation, while on the Google side, dealing with internet connection and downtime issues.
Oh, yeah, and features, and interface and performance. The new Microsoft Office interface is a hit, and Office contains a ton of great features Google doesn’t have. Also, despite Google being a web service, it is in many cases slower than Microsoft Office, due to how applications perform in a web browser. Meanwhile, MS Office is a lot harder to use for collaboration than Google is, as Google’s services seem built around the single idea of collaboration.
Both have their benefits, as well as huge demerits. To say that they are beyond debate merely implies you’ve already made up your mind, and won’t consider that maybe the “evil empire” at Microsoft actually sometimes makes good software. If you’d actually be honest with yourself, you’d admit that is unfair, as everyone deserves a chance.
Comment by Nathan Weinberg | February 13, 2007
Tim’s probably right, that Microsoft and Google can’t compete with a free solution, assuming that free solution has all the features of the pay products (whether traditional software or free solution).
Frankly, I don’t think I’d ever use OpenOffice. I’m sick of the nasty battle to force people to use the OpenDocument format, I don’t want to live without the Ribbon anymore, I can’t stand doing anything to help Sun, I don’t like products that even play nice with Java, and frankly I don’t think it has the right development model to ever be as good as Microsoft Office. It may be open source, but it is a small project by a relatively small team, one that isn’t doing anything to innovate, just be competitive enough to win market share on a single selling point: Price.
Price isn’t everything. Sometimes quality is more important.
Comment by Nathan Weinberg | February 13, 2007
(Sorry if this is a duplicate or triple comment, IE7 aborts script execution due to a missing object in line 87, iirc. I must look like such a n00b due to all my commenting trouble.)
Can’t argue with you there. You sound too much like me when I’m talking about Firefox
I do want to add some stuff, though:
- I do not have any Java Runtime Environment, but I do use OpenOffice as my exclusive Office suite.
- I am not “rich”, so especially since OpenOffice is mostly sufficient, its price point is very important to me, personally.
- I use the Rich Text Format a lot, more so than OpenDocument. I like it. Microsoft Word, OpenOffice, WordPad… Doesn’t matter. They all support it to varying degrees.
Come to think of it, did a Goobuntu release just become a bit more likely? I think it’s probably more of a “when” than an “if”, don’t you think?
Comment by Tim | February 13, 2007
I have been using Google Apps since August now … and I think its very cool. Now its up in its premium edition…and the best thing is the Google API. For example we are developing an FREE open source “business application platform” (think salesforce.com). Our first application is working tightly integrated with GOOGLE APPS. http://www.applicationexchange.com.
Comment by edbong | February 27, 2007