Thursday, February 22, 2007

Google versus Microsoft - the enterprise battle heats up!

Google (NASDAQ: GOOG) today introduced new innovation with the Business version of Google Apps - Google Apps Premier Edition in direct competition to Microsoft's Enterprise applications.

Google is one of the top 20 Innovators of The Innovation Index.

Google Apps Premier Edition is available for a yearly subscription of $50 per user account per year.

Google Apps Premier Edition communication and collaboration suite includes the following Top Ten Features:

1. Google Gmail webmail services including Gmail for Blackberry
2. Google Calendar shared calendaring services
3. Google Talk instant messaging and voice-over-ip
4. Start Page branded and customized to company domain (e.g. companyname.googleapp.com)
5. Google Docs & Spreadsheets
6. 24 x 7 Phone support for critical issues - extended business hours support
7. 10 GB storage per user
8. New set of administration and business integration capabilities - Application-level control and APIs for business process adaptation, policies, data migration, user provisioning, single sign-on, and mail gateways
9. 99.9% uptime - SLAs (service level agreements) for monitoring and credits
10. French, Italian, German, Spanish, Chinese, Japanese and Korean language versions (possibly more)

Importantly, Google Apps Premier Edition builds on the success of 100,000 small businesses and universities using the free Google Apps Standard Edition and Google Apps Education Edition introduced in 2006.

Proctor & Gamble (NYSE: PG) and General Electric (NYSE: GE) are also two of the top 20 Innovators of The Innovation Index. Both P&G and GE applauded the new Google Apps Premier Edition.

P&G statement:

"Procter & Gamble Global Business Services (GBS) has enrolled as a charter enterprise customer of Google Apps, a successful consumer product suite now available to enterprises. P&G will work closely with Google in shaping enterprise characteristics and requirements for these popular tools," said Laurie Heltsley, director Procter & Gamble Global Business Services.

GE statement:

"So much of business now relies on people being able to communicate and collaborate effectively," said Gregory Simpson, CTO for General Electric Company. "GE is interested in evaluating Google Apps for the easy access it provides to a suite of web applications, and the way these applications can help people work together. Given its consumer experience, Google has a natural advantage in understanding how people interact together over the web."

Google also has the backing and adoption of smaller yet critical businesses such as San Francisco Bay Pediatrics.

San Francisco Bay Pediatrics:

"When it comes to our email systems, our doctors don’t have the time or the budgets to deal with managing technology or defending against spam," said Andrew Johnson, chief information officer, San Francisco Bay Pediatrics. "With Google Apps Premier Edition we don’t have to worry about downloading the latest spam filters or navigating unwieldy servers. This is where we let Google do what it does best, so we can do what we do best – help our patients."

Finally, Google made a very important announcement which was embedded towards the later paragraphs of the Press Release:

"other early adopters of Google Apps Premier Edition include Salesforce.com and Prudential Preferred Properties in the U.S., as well as Essilor and Mediametrie in France. "

Google is touting Salesforce.com as an early adopter.

Could this be the beginning of an early indicator that Google will go on to buy Salesforce.com?

Does Microsoft Live or Microsoft Business Services division have an answer for Google? Can Google find many distribution and enterprise partners such as Avaya and Postini to support, integrate and service Google Apps Premier Edition in the enterprise? For now, Google is knocking at the enterprise doors, and if Google is able to obtain early adopters such as GE and couple of other larger Fortune 500 corporations, Google will generate the kind of momentum where major enterprise customers will be compelled to take a look at Google Apps Premier Edition and evaluate at the price point of $50 per user account per year.

New Revenue Opportunity

With the introduction of Google Apps Premier Edition, Google has the opportunity to create new market share, and grab market share from Microsoft Office and Email applications. Google Apps Standard and Education Edition has 100,000 business customers today; at an average of 10 users per customer, this translates to 1 million end users potentially using Google Apps today. Google Apps was introduced in 2006. Thus, in about 1 year, Google Apps has an end user population of 1 million potential users. If Google Apps Premier Edition can attract 100,000 new businesses in one year, or 1 million end users, this will translate into new revenue opportunity of $50 million per year. However, knowing Google, and with the tremendous marketing muscle it exerts at Google.com, the goal is possibly much higher: 10 million end users or $500 million in annual revenue. Where will these customers come from? From new market growth and a sizable number from Microsoft. If Google goes on to buy Salesforce.com and introduces Google Apps integrated with Salesforce.com CRM applications, the vision of $500 million in annual revenue is within reach. In five years or less, Google has the potential to create a $1 billion business for Google Apps Premier Edition. Disruptive innovation in motion.

Google versus Microsoft - the enterprise battle heats up!

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