Google joins corporate software fray

Google on Monday fired the opening shot in a new long-term battle with corporate software giants like Microsoft and IBM, as it launches new versions of Gmail and some of its other consumer internet services designed for workplace use. Initial apps are Gmail Web e-mail, the Google Talk instant message and Web phone-calling service, group scheduling on Google Calendar, and Google Page Creator for Web page design. The move marks a stepped up challenge to rival Microsoft Corp as the software giant prepares to upgrade its Windows and Office franchises. The free set of Web-based programs for small businesses, universities and nonprofit businesses goes by the mouthful. The initiative takes the internet company into a new market called “software as a service,” where companies rely for some of their technology on services delivered over the internet, rather than buying software to run on their own machines. “I think it’s an incredible opportunity: software as a service is really taking off, because you only buy what you want,” said Dave Girourd, general manager of Google’s enterprise group. “Our view is that a lot of our consumer applications over time really make sense as corporate applications.” Corporate Gmail, which companies will be able to brand with their own names, will carry advertising, like the consumer version.

Google said that by the end of the year it planned to offer a separate version that companies would pay a subscription for. However, while the rapid growth of new companies like Salesforce.com has demonstrated the appeal of software as a service, this is still a nascent market where most big companies are still treading carefully, analysts warned. “Companies won’t drop everything and move en masse to Google,” said Matt Brown, a senior analyst at Forrester Research. Particularly when it comes to the communications and collaboration tools used by office workers, “they face all kinds of security and privacy issues” that will make them hesitant to switch, he added. Defending the reliability and security of its services, Girouard said: “All of these are very important to consumers as well.” He added, though, that Google would also seek to make its products more appealing to big companies, for instance with a support service and with features designed to meet regulatory requirements that public companies have to follow. He also suggested that Google is likely to extend other services to the corporate market, such as word processing and spreadsheets, which offer lightweight alternatives to some of the features of Microsoft’s Office package of PC software. Referring to Google’s online word processor, Giroard said: “It’s pretty clearly a good candidate, as are other Google applications.” Microsoft has created online services of its own under the Windows Live brand, but has so far stopped short of offering an online word processor or other services that could be seen as competitors to Office. However, some of the communications and file-sharing tools it has already made available online are more advanced than those that Google is launching on Monday, said Brown. While they are unlikely to appeal to big companies, Google’s online applications may be taken up by “small businesses, families, educational institutions, ones that don’t have big budgets for IT departments,” said Brown.

Google began a limited limited trial of the Gmail service for corporate users earlier this year. Other services offered beginning Monday are Google Calendar, Google Talk and Page Creator, a tool for creating web pages. The search engine company launched its first product for corporate customers, a “search appliance” that can be plugged into a corporate network and be used to search a company’s internal data, two years ago. (ft.com, Reuters)