A New Paradigm

By Baselinemag  |  Posted 2007-08-22 Print this article Print

The search giant's release of free spreadsheets and word processors has been a hit with small businesses. But will it play in larger enterprises?

A New Paradigm

If Google Apps has an advantage over Microsoft Office beyond how it enables collaboration, it lies in how its software-as-a-service paradigm lifts administrative burdens for I.T. departments.

In theory at least, companies that use Google Apps don't need any technical workers to update the client software, fine-tune the e-mail servers or manage the disk space. That's all done by Google, in what people metaphorically call "the cloud," actually a series of gargantuan server farms operated by the company.

Google's strategy of distributing its software as an online service means CIOs also don't need to manage software upgrades. When Google improves some aspect of its spreadsheet or word processing software, it can make the enhancement available to users immediately, without their having to take any action; they may not even be aware that anything has changed.

"One thing about serving software from the cloud is you can innovate very quickly, much more so than in a standard innovation cycle," says Forrester analyst Koplowitz.

Of course, from a corporation's point of view, there's a downside to the idea of using applications that run on another company's servers, and that is the possibility that data may be compromised as it moves between internal and external computers.

Fortunately for Google, it doesn't have to take on the burden of proving that software-as-a-service and security are compatible concepts. Proof of that has already been furnished by Salesforce.com, a maker of customer relationship management software whose founder, Marc Benioff, takes every chance he can to goad Microsoft. Salesforce.com's success in moving up the customer food chain—from tiny accounts initially to accounts like Avis and Bear Stearns today—is something that Google is hoping to replicate.

Google's comfort online—the Internet is, after all, its native habitat—isn't an unqualified advantage. The fact that its applications can only be accessed online is a drawback in a world in which business people still occasionally find themselves in planes or in other places that have no Internet access. To that end, Google is working on offline-enabling its applications through a framework any software developer can tap into, called Google Gears. Google has already used Gears to bring offline capability to its RSS reader; the company plans to do the same with its weightier applications.

At the same time that Google is moving toward making its applications available offline, Microsoft is taking steps to embrace more of a Web delivery model. Microsoft Office Live, a 10-month-old initiative that provides domain names, a Web site and e-mail to small businesses, has been a first step.

And earlier this summer, Microsoft CEO Steve Ballmer told financial analysts that he expects to augment almost all Microsoft applications with Web services components within the next decade.

"They're both large investments," Koplowitz says of Google's move to the enterprise and Microsoft's move to the Internet. "It's going to be a question of who has the stomach to keep this fight up longer."


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