Analysis

5 Reasons Why Google Will Challenge Microsoft's Office Monopoly

Robin Bloor By: Robin Bloor, Partner, Hurwitz & Associates
Published: 27th February 2007
Copyright Hurwitz & Associates © 2007
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Google is now head-to-head with Microsoft in the Office Apps market, as you may have guessed from the recent Google Apps announcement. What you get from Google is word processing, spreadsheet, calendar, chat, web page creation and email. There are two price points:

  1. It's free. Just log on to Google and register. But prepare to be advertised at and you'll get less storage space (what Google gives you is still all you're ever likely to need if you archive your email every year or two).
  2. Google Apps Premier Edition costs $50 per user per year and, you can use your own branding and domain name on email, etc.

So will it actually take market share from Microsoft? I think the answer is "yes". Here are the 5 reasons why.

  1. Google has the brand to make it possible. Free Open Source office components have been available for many years, via Open Office (and other products). They work very well. However, they never dented Microsoft's monopoly. They may have taken a small sliver of the market, but not yet a significant slice. The problem (I believe) was branding rather than product quality. If I was forced to decide, I'd personally go for Open Office rather than Google Apps, but most organizations wouldn't because "Who's behind Open Office?". This comes down to branding. Google has a powerful brand. It was sufficient to convince Proctor and Gamble and General Electric to set up trials.
  2. Google Apps is not great software, but it is good enough. Actually the word processor is really good for collaborating on documents because its versioning works well and it's easy to understand. The email is good too. But there' no PowerPoint equivalent yet and the spreadsheet is weak. But who cares. Microsoft Office is ridiculously over-featured and for 50 percent of users (if not 80 percent). Google Apps will be good enough.
  3. Office software costs a small fortune over time. First, you have to upgrade regularly (or eventually) which never costs nothing. Second, sometimes staff need to be trained in the new versions (or just to be effective users) and third, possibly most importantly, there's administration. When you add it up, you quickly realize that if an organization ditches Microsoft Office for just some of its users, it will probably save more than $50 per Office user per year. The Google offering is a no-brainer, wherever Google Apps fits the need.
  4. Google isn't done yet. Think of this as release 1.0 of a server-based office applications suite and you get the picture. Google is going to build on this. As companies sign up, Google will have users to support and the users will bitch about the stuff that's inconvenient and it will all improve in time. Google will gradually move up the food chain to try to satisfy the more sophisticated users.
  5. Now think Web 2.0. The Google Apps software has all its interfaces exposed so that other software can link to it. Not more than 2 days after Google announced Google Apps, Avaya leapt straight in, announcing that it was going to integrate its considerable suite of communications software with Google Apps—its eyes firmly focused on the SMB market. Salesforce.com will also integrate with Google Apps and probably most SaaS (Software as a Service) vendors will follow suit. So without even launching a channels program, Google is acquiring pretty powerful partners.

So what does it all mean? Well the last point listed is the one that really threatens Microsoft. If Google Apps becomes the de facto integrated Office Suite then Microsoft Office is toast.

Reader Comments

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27th February 2007: 'Duncan' said:

Web apps are all very well and good if you have a large bandwidth allowance on your xDSL line and a reliable connection - but what about when you are on the move with limited/no connection? No thanks - lets keep the office suites firmly on the desktop. OpenOffice is as good a solution as any.

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27th February 2007: 'Gavin' said:

I believe the long-term outlook may be different. Many business users rely on IT, or an outsourced partner to make recommendations which will probably be based on current knowledge, likely to be Microsoft based. Also, many back-office systems (i.e. Sharepoint, Exchange..) will remain Microsoft with growing ties to Front-Office (Microsoft Office) applications, again strengthening the MS hold. Google will appeal to small cost sensitive start-ups who probably started the business using inexpensive applications, and due to historical reliance will continue to do so. But cost is not the only grounds for competition, while current solutions work well there is unlikely to be a large migration to Google-esque solutions.

Gavin

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27th February 2007: 'nio' said:

Wait, let me guess, Microsft will not counter and watch google take market share. If you had any idea of how business works you should already knwo that microsoft have already started working on something similar + the have the user base + have the apps already all thaty have to do is convert them to web based. So tell me oh wise man how will Google even come close to challenging?

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27th February 2007: 'Bill Porter' said:

Congratulations to Google for bringing competition where it is sorely needed. But there is an awful lot of MS Office users and if they don't love MS Office, they are very comfortable with it. So the adoption curve is a long one, and Microsoft have time to see how this plays out. And could it be that MS Office Live is a trojan horse to give Microsoft some options..?

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27th February 2007: 'Y Cooreman' said:

I doubt Google's road to Office domination will be anywhere near as easy as you make it out there.

I work in a company with technology at it's base and innovation and communication as a driving force.. yet, most of it's -rather intelligent- employees are as open to change when it comes to document creation than the US administration is open to afternoon tea with Mahmoud Ahmadinejad. And I don't think we're an exception at all.

Add to that the obvious privacy issue ("..share your work on Google.. especially with the ISA and FBI!!..") and I think Google will need to do a hell of a lot more than develop good applications to win over people.

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27th February 2007: 'Ren' said:

I don't agree with this at all. Microsoft in the office space may cost a little more, but you ultimately get what you pay for.

Web-based solutions take up bandwidth and I can only imagine how much bandwidth would be needed for something like this.

Where is the immediate support and tools necessary to fix issues.

If you are working on a document and your internet or computer crashes..what then?

It just seems like this was written from a business person point of view and not from a legitimate IT leader.

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27th February 2007: 'Duncan' said:

Robin, I would be interested to hear your views of SugarCRM (open source and commercial web CRM package).

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