Microsoft: Google Apps have 'hidden costs'

The war of words between Microsoft and Google over the use of Google Apps in the enterprise continues.

Sharing his thoughts yesterday in a blog called "The Hidden Google Tax," Microsoft's director of online services, Tom Rizzo, took some swings at Google Apps, proclaiming that it's not a cost-effective solution for the enterprise.

Rizzo, who in the past has offered his no-holds-barred opinion of Google Apps, said that Microsoft interviewed almost 100 small and midsize businesses that use Google Apps.

Among the findings, Rizzo said that 90 percent of the companies use Google Apps in conjunction with Microsoft Office and in fact continue to rely on Office for productivity reasons, security concerns, and the ability to work offline. Further, most of the companies included in Microsoft's survey use only Gmail and Calendar, with only two out of five using Google Docs and two out of three continuing to rely on Office.

Describing what he calls the "Google tax," Rizzo pointed a finger at three potentially taxing and often unanticipated costs that he ascribes to Google Apps.

First, businesses that have already standardized on Microsoft Office face the time and expense of migrating their corporate e-mail, folders, distribution lists, and other data from Microsoft Exchange to Google Apps, according to Rizzo. IT administrators are also called upon to use third-party software to help migrate and synchronize all the data from one system to another.

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Second, Rizzo cited overall high IT support costs in migrating data, pointing to one app available in the Google Marketplace that migrates Exchange data to Google Apps at the cost of $20 per user. Beyond internal IT support, though, support from Google can also pose a problem in that the company doesn't offer 24-7 support. On weekends and holidays, Google responds only to certain priority 1 requests, with no support for lower-priority issues, Rizzo said.

Finally, Rizzo pointed to user training as another stumbling block. Claiming that Google Apps offers only basic functionality and lacks certain key features, users can experience confusion over formatting issues and potentially even lose data when converting documents between Google Apps and Microsoft Office.

In response to Rizzo's allegations, a Google spokesman told CNET that "there's a reality distortion field over Redmond. Customers know Google's much less expensive than Microsoft."

This is not the first time Microsoft has publicly tried to dissuade businesses from using Google Apps. The company released a statement in 2007 laying out such arguments. And Microsoft's claim about a "Google tax" is also reminiscent of the company's past digs at Apple, complaining of a so-called "Apple tax" that Microsoft claims people pay when they opt for a Mac over a PC.

Of course, Microsoft customers aren't immune to hidden or unexpected costs. Ron Markezich, corporate vice president for Microsoft's U.S. Enterprise and Partner Group, recently acknowledged to AllThingsD that businesses using Microsoft Office and Exchange also end up having to pay for support and licenses and other related products. Markezich offered a revealing admission by saying that "every dollar you spend on software from Microsoft, you spend $6 trying to get it to do anything. What we're trying to do is drive that $6 to zero."

Microsoft and Google have often found themselves at odds battling over business from the enterprise and government markets. Microsoft traditionally enjoys the upper hand as it's a known element, recently scoring a contract from the U.S. Department of Agriculture. But Google has been aggressive in courting business, out-dueling Microsoft over a bid to win a contract with the U.S. General Services Administration.

But the two companies have also relied on legal manuevers and allegations to gain the upper hand. Google last year launched a lawsuit against the federal government claiming that the U.S. Department of the Interior failed to properly evaluate Google Apps when it was looking for a new Web-based document system.

With government contracts a lucrative business, Microsoft recently claimed that the Google Apps for Government suite doesn't meet the necessary level of security that Google says it does. Google, though, said Microsoft was off-base.