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Google Eyes the Enterprise Market

Google Eyes the Enterprise Market

The search giant is showing signs of making progress in the enterprise as it targets Microsoft’s cash cows of Office and Exchange

Early gains

Just how important are these recent wins for Google Apps? Experts say it's worth keeping them in context.

"It's still pretty early," says Ovum's Mitchell. "These are two biggish deals but if we compare the number of enterprise deals Microsoft has, it's pretty small stuff. Taylor Woodrow was less of a surprise because it's for an industry dependent on collaboration but TMG is interesting because it's for a professional writing organization and I've been critical of Google Apps for being not particularly writing-friendly in terms of layout, formatting, outlining and grammar checking," he says.

"It's interesting because it's core to TMG's business, like ERP is to a bank. They've been convinced by the productivity and cost structure, and that the service levels have been strong enough."

Also, even though some firms seem happy to accept reduced functionality for lower cost and other bonuses, not everybody will feel the same.

"If you stopped most business users and said: 'We only use 10 percent of Office, can I give you Microsoft Works instead?', theoretically it's the way to go but most users will tell you where to go," suggests Mitchell.

For David Bradshaw of analyst IDC, Google's recent signs of progress suggest that they could well succeed. "They're a potentially serious challenge to Microsoft in the long term. With Google Mail you get an enormous inbox and search is good so you can find things and never have to delete them. I'm a little less enthused by the state of Google Docs but if you're filing a story or report from the field or doing a memo it's fine," he says.

Richard Payling, vice president of global outsourcing sales at Capgemini, which is working with Google on selling opportunities to large organizations, -believes there is much more to come.

"We've had a lot of companies wanting to explore and we've been qualifying hard," he says. "For companies with a Lotus Notes user base or Windows 2000, you can build a case."

Google's Robert Whiteside is predictably enthused. "These are exciting companies to be dealing with. Half a million companies already use Google Apps but people have been keen for us to demonstrate these larger organizations. Any companies looking for reference customers will be taking heart."

Google's chances of making more inroads could be helped by any further decline in economic conditions, believes Whiteside.

"If the economy gets tougher, decisions on any spend get more scrutiny. Finance directors would be well within their rights to question their IT departments' current spending. Google Apps has the potential to take cost out of the business. Even in customers that take a stricter attitude and rule cloud computing firms out, we'll see users vote with their feet," he says.

Even if this might currently appear a mere blip on the radar to Microsoft, it is likely that this is the most significant challenge to the company's desktop tools dominance for some time, according to Ovum's Mitchell.

"It's difficult sometimes to unpick the Office component from Microsoft infrastructure but the market is completely different to five years ago," he says.

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