Microsoft Office vs. Google Apps: The Business Brawl
Google Apps may not be a true threat to Microsoft's enterprise business now, but Google's cloud-based productivity apps have forced Microsoft to tinker with Office, a key part of its business model. Both rivals face mighty challenges in the valuable battle for Web apps in the enterprise.
CIO — In the business battle to rule the enterprise office suite of the future, Microsoft (MSFT) and Google (GOOG) both must overcome significant problems.
On Google's side, despite the Google Apps price advantage and Google's announcement that 2 million companies are now using Google Apps, various research data still shows Google is losing out in the enterprise. Google Apps adoption not only lags way behind Microsoft but also trails behind OpenOffice and even IBM's (IBM) Lotus Symphony. Estimated revenue for Google Apps in 2009 is $50 million, a tiny portion of the company's $22 billion war chest.
Microsoft, meanwhile, must be competitive with Web apps — but not too competitive, since these apps will presumably drive much less revenue than its longtime cash cow, the traditional Microsoft Office suite. In fiscal year 2009, Microsoft's business division (of which Office is a major component) generated a healthy $18.9 billion in revenue. Microsoft must also convince customers that it "gets" cloud computing the way that Google does.
If anyone has the cash and the consumer branding power to take on Microsoft, it's Google, analysts say. But there's still plenty of explaining to do.
Web Apps By the Numbers
The enterprise today is offered a plethora of productivity tools: There is the big horse, Microsoft Office, followed by lower-cost or free alternatives such as IBM's Lotus Symphony and Web-only products Google Apps and Zoho's Office Suite, among others.
Yet although the Web browser may be the most prevalent computing platform for both consumers and businesses, enterprise use of cloud-based alternatives compared to Microsoft Office remains low, according to recent data from Forrester Research.
[ For complete coverage of the Cloud App Wars -- including a complete guide to the business war, the competing products including Google Docs and Office 2010, the implications for users and IT, and more -- see CIO.com's Cloud App Wars Bible. ]
In a March survey of 115 North American and European enterprise and SMB technology decision-makers, Forrester cites that 81 percent are currently supporting Office 2007 — while only 4 percent are using Google Apps.
Moreover, despite Office 2010's higher price than current alternatives, one-third of survey respondents plan to upgrade to Office 2010 in the next year and one-quarter plan to upgrade in the next two to three years.
So does Google Apps stand a chance against Microsoft Office in the enterprise? Maybe not right away, but Google is in a good position to advance as the enterprise shifts to the Web, say industry analysts.
