Bizarro World: Microsoft Lashes Out at Google Apps

If you ever doubted that Google's Web-based office productivity suite, Google Apps, was a competitive concern for Microsoft, doubt no more: The software giant issued a bizarre public statement about the suite, first published by ZDNet blogger Mary Jo Foley, which suggests that Microsoft is quite concerned that Google Apps will begin chipping away at its dominant Office platform.

"Our long history in meeting the complex needs of enterprise customers, a partner ecosystem that has grown 43 percent on the Office platform since last year and our current and future investments in the software + services arena will deliver even more flexibility to customers," a Microsoft spokesperson writes in the statement. "We believe competition is good for customers and the industry. That said, customers tell us that our solutions deliver the ease of use, reliability and security that enterprises need."

The statement devolves from there, listing 10 hypothetical questions that businesses should ask when considering switching to Google Apps. Some of the questions--"how many 'USERS' of [the Google Apps] applications truly exist within the enterprise?" are somewhat pointless given this nascent time in the history of cloud-based computing. But others are legitimate if hastily-worded concerns for any business seeking to move to this new usage paradigm.

For example, the second question states, "Google has a history of releasing incomplete products, calling them beta software, and issuing updates on a 'known only to Google' schedule--this flies in the face of what enterprises want and need in their technology partners--what is Google doing that indicates they are in lock step with customer needs?" Fair enough, though one might point to Microsoft's own always-in-beta Windows Live services as being somewhat similar.

The eighth question offers other concerns. "The world of business ... is always on and always connected. As such, having access to technical support 24/7 is essential. If a company deploys Google Apps and there is a technical issue at 8pm PST, Sorry. Google's tech support is open M-F 1AM-6PM PST--are these the new hours of global business? And if a customer's 'designated administrator' is not available (a requirement) does business just stop?"

As it turns out, Google Apps is hardly enterprise-ready at this point, though the suite, which offers Gmail-based email, online calendaring, and basic word processing and spreadsheet functionality, will likely meet the needs of many consumers, students, small businesses, and other organizations. What triggered Microsoft's haphazard response, presumably, was an announcement yesterday that consulting services firm CapGemini was reselling Google Apps to large companies for $50 per user per year. Based in France, CapGemini represents major corporations Eli Lilly and PricewaterhouseCoopers. It's worth noting, however, that the company also supports software sold by Microsoft and others.

The real issue, of course, isn't whether Google Apps is viable competition for Microsoft's Office platform today, as it clearly is not, especially for the large corporations that matter most to the software giant. Indeed, Google says it earned just $70 million from software licenses and other services during the first half of 2007, representing less than 1 percent of the company's revenue during that period. That amounts to a rounding error in Microsoft's enterprise sales.

But as with Netscape a decade ago, Google represents a threat to Microsoft that can only grow over time. And Google, unlike Netscape, has almost unlimited funding and is growing rapidly, and increasingly finds itself moving into Microsoft-controlled markets. This, I think, explains Microsoft's almost spastic response to this emerging threat. Hey, at least they're aware of the competition this time around: A decade ago, Microsoft lost years of time waiting for then-CEO Bill Gates to get Internet fever. The company's belated and over-reaching response at the time still resonates today in its various antitrust troubles around the globe.

Microsoft offers its take on CapGemini-Google deal (by Mary Jo Foley)