Ideas to Income BLOG

Google Apps Premier launches: The desktop just got a lot more interesting

Google Apps Premier, Google's very own version of Office(tm) debuted yesterday. The package, called Google Apps, combines two sets of previously available software bundles, bringing email, instant messaging, calendars and Web page creation together with docs and spreadsheets (which also allows users to read and edit documents created with Microsoft Word and Excel).

While today's announcement is obviously a clear attack on Microsoft's second-largest and second most profitable business, this move further underscores how significant the overall Google threat is. Google has consistently demonstrated its understanding of user simplicity and customer value. Tech pundits and users alike have understood the old axiom that "80 per cent of a product's usage involves 20 per cent of its features." Google gets this.

While many may dismiss Google Apps as an entry level collection of hosted web applications, it does appear to address a sizable segment of the market that only needs a shallow pool of the features that Microsoft has built into its products. While these Pareto Principles may not apply for power users of Office who appreciate having the power to build presentations to statistical models, over time the Google approach will probably resonate with a portion of the current user base that make up this $11.8 billion franchise.

Since its first debut, Google Apps has helped challenge how we think about and use software in general, bringing into question some of the infrastructure elements that we have traditionally thought of as chained to the desktop. It now brings into question the need for key elements such as an operating system and storage. Yet, even more intriguing is how this move to capture share of desktop will play out in Google's more traditional search business. Microsoft has become a reasonable player in the search game in large part due to the huge numbers of people who don't change default settings for search applications within the IE browser software shipped as part of the Microsoft Office suite.

Not only could Google erode lucrative paid search revenues, they could also make a considerable dent in Microsoft's plans to control the gateway to other web-based applications such as CRM. Controlling this part of the computing value chain at the desktop level provides an incredibly lucrative stream of consumer and business information that can be monetized.

And if Google wasn't busy enough, they have also just announced that Avaya will be integrating its communications products with the Google Apps initiative. This gives Google an strong enterprise partner as it moves closer to delivering on what appears to be a play to extend the power of its already hugely successful Gmail and IM platform into a fully integrated communications offering - marrying voice with IM, email and presence applications to compete not just with Microsoft, but other players such as Skype.

These and other factors certainly point to a need for Microsoft to carefully consider how they create, capture and deliver value going forward. Stay tuned this market is about to get a lot more interesting.

Add comment 2007-02-23 Peter Evans