Can Google Apps Crack the Fortune 500 and Large Enterprises?

Analysts wonder if the web-based productivity software can truly crack the enterprise shell, hardened by a decade or more of Microsoft Office reliance, despite yesterday's announcement that Salesforce.com would offer Google Apps to all customers free of charge.

Analysis: Microsoft Releases Office Live in Public Beta, But Still Requires Users to Work Offline

Until now, Google primarily has worked with small and medium businesses looking to capitalize on Google Apps' low cost (the enterprise edition rings in at $50 per user per year) and its ability to enable people to collaborate in real-time on documents. Gaining large enterprise adoption, however, hasn't necessarily materialized.

Microsoft still dominates the productivity space. According to Techcrunch, Microsoft made $16 billion from Office in 2007. Google Apps, conversely, made about $400 million, only accounting for a small fraction of Google's overall revenue.

On the customer page of the Google Apps website, the chief technology officer of General Electric (GE) is quoted as saying the company is considering using the web-based software, and Procter & Gamble Business Services has enrolled as charter member. But analysts such as the Burton Group's Guy Creese says Google Apps hasn't caught on yet in the Fortune 500 .

"Because Google Apps came out of the consumer space, there's a bunch of things missing [for enterprises]," says Creese, who also wrote a report pondering if adopting Google Apps could be "career limiting" move for IT leaders in the enterprise space.

Among the primary features Google Apps fails to have in its portfolio, Creese notes, are sufficient offline functionality and records management for documents. While Google addressed the offline problem for its documents and spreadsheets last week, a similar function has not followed for its enterprise Gmail.

During a question and answer session after the companies unveiled their newest partnership at the Four Seasons hotel in San Francisco yesterday, Dave Girouard, vice president and general manager of Google Enterprise, and Salesforce.com CEO Marc Benioff noted that the issue becomes less relevant as the ubiquity of wireless and other connections to the Internet continue to envelop the world.

But even if companies can get over the offline issue, the adoption of Google Apps could be a cultural challenge as much as technological one. Microsoft's technology has pervaded the enterprise space for so long that many IT managers, as well as regular users of the Office software, have difficulty seeing how they could get off of it.

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