Google Launches Fee-Based Biz Apps

Google dropped yet another shoe Thursday.

As of midnight, the company has added its Web-based word processor and spreadsheet to its existing apps packet and is selling the resulting bundle into business accounts. The move has been widely expected.

For $50 per person per year, Google Apps, Premier Edition gives a business Google "Docs & Spreadsheets" plus GoogleTalk instant messaging/VoIP, Gmail, Google Calendar, and Web page creation tools. Each user also gets 10 gigabytes of storage, a five-fold increase over the free, ad-supported version.

The company will continue to offer that freebie, which has been available since August as Google Apps For Your Domain. It will also offer the business version of the applications free to students. All of the bundles now include the spreadsheet and word processor.

A company executive was careful not to state what nearly everyone else seems to believe: That this business applications suite is a broadside fired on the Microsoft Office franchise.

For one thing, there is no on-line (aka disconnected) capability, although Google might consider adding that down the line, said Rajen Sheth, product manager for Google Enterprise. Instead, users can save their Google work in virtually any of the popular word processing and spreadsheet formats.

Google employees themselves use Microsoft Office, and the company sees Google Apps as a way to ease collaboration on documents and spreadsheets, Sheth said. As such, they see a scenario in which business users utilize both local applications and Web-based apps in a cooperative scenario.

But, companies weary of what some see as pricey Office upgrades might be tempted to forego them and use Google's offline capabilities along with existing applications, some VARs said. Estimated retail price for the Office 2007 Professional edition is $329 as an upgrade. Even the least expensive Home and Student Edition of Office is $149. And, not many volume-based discounts will bring Office down as low $50 per user.

Microsoft's lengthy list of Office 2007 SKUs may also prove daunting to some buyers who would prefer to see a straight-and-simple desktop applications purchase.

Google Apps sales will be direct: There is no role for traditional resellers. However, Sheth said he foresees good opportunities for VARs and integrators needed to tie the Google apps into corporate directories and other infrastructure. The company is offering APIs for data migration, provisioning, single-sign-on and mail gateways.

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