Google Apps Premier Edition: Time to start keeping score
Not like anyone didn't see this coming, but now Google has officially entered the Office market and is competing for dollars - $50/per user/per year. While I still generally agree with what I wrote over a year ago, Google has the resources to pull this off given time. This is classic Innovator's Dilemma - the question is at what point is the Google offering going to be good enough to seriously present a challenge to Microsoft's revenue from Office and what is Microsoft's response. I'm of the opinion that MS has got to go a lot further down the Excel Services track and then extend it to a wider audience - not just Enterprises willing to pony up for Microsoft Office SharePoint Server (MOSS). Also - not just Excel of course - Word too!
Additionally, let's not forget the developers. Custom solutions on top of office suites present not only phenomenal value creation opportunities for end-users, they also create increased switching costs. Obviously this works for you if you're the entrenched vendor, against you if you're not. The more that the developer community as a whole dismisses (or ignores?) the viability of solutions built on top of office suites, the lower the switching costs of changing office suites. There are a couple of implications for vendors here. First, developers need to be convinced of the benefit of targeting a particular platform and given the tools to take advantage of it. Second, there must be a way to "grow" new developers from the ranks of the end-user community. Many of the best Office developers I know did not come from IT departments or with CS backgrounds - they came from the trenches and learned as a means to achieving an end. They need easy, accessible ways to extend their office suite.
One of the drawbacks I hear about the Google offering or other online offerings is "do you really want to trust a third party with all of your documents?". Another common drawback cited is the lack of an offline experience. I'm not sure we should consider these huge points in the whole competitive scheme of things. Wouldn't you think that Google can address the first point by offering it's software for sale to corporations much the same way as Microsoft sells MOSS? In other words, they say "fine - pay us $X and you can put it in house on your own server". Regarding the offline experience, there are two forces that are chipping away at this. First, the increasing rate at which we have the ability to be online if we choose. Almost ubiquitous connectivity depending on your locale. Second, I don't think it is a huge technical challenge to figure out an offline solution if you already have the ability to provide a sophisticated online experience. I guess what I'm saying is that while these drawbacks are real today - I don't think they provide long term protection to Microsoft's position.
It has been and will continue to be an interesting story to follow.
As an aside, I think the piece I wrote over a year ago is motivational fodder for somebody - it gets many more hits than I ever thought it would.