Google moves to shake up software, take on Microsoft
Programs will be sold to businesses
By ROBERT WEISMAN
THE BOSTON GLOBE
Search provider Google Inc., moving to broaden its revenue beyond advertising, is poised to shake up the business software market.
The company is bundling the Web-based software programs it offers free to consumers into a premium package and, in a challenge to Microsoft Corp., it will be selling a paid version to businesses.
Google's enterprise product, which will include e-mail, calendar, word processing, spreadsheet, instant messaging and voice-over-Internet programs, is expected soon, said Dave Girouard, vice president and general manager for enterprise at the Mountain View, Calif., company.
The move comes as Microsoft rolls out Office 2007, the new version of its best-selling productivity software suite, as well as Vista, the latest upgrade of its ubiquitous operating system.
Some businesses, faced with the cost and disruption of upgrading their software, may be ready to turn to Google, said Rebecca Wettemann, vice president at Nucleus Research in Wellesley, Mass.
"I think this could pose a significant threat to Microsoft," she said. "Had this happened 10 years ago, it would have been a different story. But we see a lot of folks willing to explore the Google applications right now."
Girouard, in Boston last week to address the annual meeting of the Massachusetts Technology Leadership Council, said Google won't market its corporate product as a direct substitute for Office or Outlook, the Microsoft e-mail program. Rather, the Google software will be offered as "a set of tools that will give business people more choices," he said.
But he acknowledged that the Google choice represents a challenge to existing software suites on desktops across corporate America. Google also is selling customized business search engines.
"There's not a CEO I've talked to who doesn't want to investigate," said Girouard, a veteran technology executive. "There's curiosity, but there's also caution."
Much of the caution stems from Google's model of hosting software, such as its free e-mail application, on its own servers rather than those of its customers, meaning they would be outsourcing software programs that are critical to running their business.
Thousands of small and midsize companies, along with dozens of colleges and universities, already use a free version of Google's product called Google Apps for Your Domain, which was introduced in a beta test version in August. Google adopted the Web-based productivity suite for its own business in October. The company's executives won't give details of what they will add to make the premium package appeal to paying customers, when it will be launched, or what they will charge.
Microsoft recognizes Google's bundled applications as an effort to fashion a rival software ecosystem for enterprise customers.
"It's bigger than any one application," said Don Dodge, senior technical evangelist for Microsoft's emerging business team in Waltham, Mass., who heard Girouard's presentation to the technology leadership council. "Essentially, they're saying they'll take over your infrastructure and free you up to do other things."
Dodge said Microsoft, while continuing to improve its robust productivity applications, is countering Google by developing its own Web-based business software, called Office Live, marketed to smaller businesses. "We're both going in the same direction," he said.
Serial software entrepreneur Mike Kinkead said Microsoft's new Office and Vista releases could present an opening for Google, because many businesses will be pondering whether and how to upgrade their productivity software.