Google's Tip of the SaaS Iceberg

In a non-surprise announcement that has nevertheless garnered major attention, a beefed-up version of Google's hosted productivity suite is out there for businesses for $50 per user per year. Its obvious target is Microsoft Office, but it's hard to say, with volume discounts so prevalent in so many companies, whether Google's offering will actually be cheaper than Office for businesses, especially larger ones. It's also hard to say whether corporate IT directors will open up to a hosted model for a productivity suite or whether users will be willing to accept applications that don't have all the options that Microsoft Office offers. (On that last point, actually, we've often wondered if Office actually offers way too much -- what percentage of Word's functionality do you actually use?)

Still, if software as a service is going to be the way of the future, this is where it starts: a lightweight, hosted, reliable (at least according to Google) suite that won't break the budget. Salesforce.com has done very well for itself in customer relationship management using the same concept, and Google has the name recognition, the resources and the innovative drive to make a serious run at Office -- if not with this somewhat limited offering, then certainly with the next one or the one after that. And small businesses tired of forking over $300 or $400 for Office might just have a look at Google's wares right now.

How should Microsoft respond to Google's effort? (Maybe not with something called Office Live, thanks to another lawsuit.) How much longer will Office survive as a massive suite? How coherent a strategy is Office Live (or whatever it will be called) right now? It's a cliffhanger for now, but we'd love to hear your take at lpender@rcpmag.com.

Posted by Lee Pender on February 27, 2007 at 11:54 AM