Google (NSDQ: GOOG) is getting more aggressive about eroding Microsoft (NSDQ: MSFT)'s dominance in the enterprise and taking away the software maker's business customers.
The stance was very apparent during a media event in San Francisco on Tuesday, where Google's enterprise group assembled a group of technology journalists and presented an update on its enterprise business.
Google introduced Google Apps Sync for Microsoft Outlook, which allows Outlook users to connect to Google Apps for e-mail, contacts, and calendar data. Think of it as Microsoft on the outside and Google on the inside.
Dave Girouard, head of Google's enterprise group, hedged on whether Google would develop similar tools to integrate other Microsoft Office apps with Google on the back end. "Office has its role and it's a great set of products for a great set of things," he said. "But users ought to have more choice."
The choice Google chose to highlight was "going Google," and as might be expected, Google's chosen converts had nice things to say.
"We've had a very fruitful experience with Google," said Chris O'Connor, IT director at Genentech, one of the largest companies to switch to using Google Apps. "What started out as an experiment culminated in moving everyone in our company. We now see Google as one of our five strategic IT platforms."
Bob Rudy, VP and CIO at Avago Technologies, dismissed worries that giving Google control over so much of corporate IT might dilute the "secret sauce," the strategic value of IT. "My secret sauce is better, faster, cheaper, and more of it," he said.
Rudy later dismissed the issue of security, which remains a worry for many enterprises. "Security in the cloud is a nonissue for me and for my board," he said.
Jason Harper, VP of IT at Morgans Hotel Group, which owns the Clift Hotel, said Google Apps worked very well for his roaming employees. "The employees have adopted it very, very quickly and it has completely changed the way we work," he said.
Google (NSDQ: GOOG) enterprise business is profitable and growing, said Girouard. Google Apps, he said, counts 1.75 million businesses as customers, for a total of 15 million users. Google is managing more than 4,000 TB of e-mail for its Google Apps users. And it has dozens of large customers with more than 1,000 employees, he said. As for revenue, he was less specific: several hundred million dollars. He declined to clarify the percentage of customers using the paid Google Apps Premiere Edition. At the same time, he insisted that the free Google Apps, which is limited to 50 user accounts, isn't a "fremium" play, an attempt to convert users of the free service to the paid one. Ads, he said, help pay for the users of the free service.
There are three main reasons that companies switch to Google, said Girouard: radically lower cost, constant innovation, and happier end users. In terms of cost, Girouard cited a Forrester Research report published in January that found Gmail was about three times less expensive than a hosted version ofMicrosoft (NSDQ: MSFT) Exchange. In terms of innovation, he cited 68 features added to Google Apps in 2008 and 49 so far in 2009. Happiness is a bit harder to quantify, but Girouard insisted that switching to Google leads to happier users. "The vast majority of people that you move into Google from legacy systems feel really happy about it," insisted Girouard. And for those who find happiness in Microsoft's products, there's now Google Apps Sync for Microsoft Outlook. All of this might just sound like the argument Google has been making since 2004, were it not for customers like Avago's Rudy. Rudy recounted a conversation he had with an Oracle executive that went something like this: "Get with the Google-Salesforce paradigm or I'm going to move off Oracle." Rudy, you see, is a fan of Google's ongoing software improvements. Google Apps, said Girouard, "just gets better every week. ... That's very different from the classic IT world."
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