Businesses to buy into Google Apps Premier Edition?

Subscription version of Gmail, Google Talk and other services--$50 a year per user--now includes Docs & Spreadsheets.

Caroline McCarthy Former Staff writer, CNET News
Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.
Caroline McCarthy
4 min read
Google has repackaged and enhanced its business-oriented software offerings into a paid-subscription suite known as Google Apps Premier Edition.

The new suite, announced Thursday, replaces the set of programs previously known as Google Apps for Your Domain, which included the Start Page feature for creating a home page at a specific domain name, Gmail Web-based e-mail services, the Google Calendar shared calendar program, and Google Talk for instant-messaging and voice chat. The new Google Apps Premier Edition is comprised of those programs in addition to the Google Docs & Spreadsheets software.

Low-cost alternative to Microsoft Office
While Google Apps Premier Edition isn't yet on par
with the dominant productivity suite, the Google
mystique and the $50 price count for a lot.

The announcement of a revamped business application suite from Google had been anticipated for some time, as reported by CNET News.com.

Businesses can subscribe to Google Apps Premier Edition for $50 per year for each user account. While all of the applications are available in a free, ad-supported form to consumers, a subscription to the enterprise version offers enhanced customer support features, 10 gigabytes of storage per user, no advertisements and a set of APIs (application programming interfaces) designed to help companies' IT professionals further customize the service. Additionally, Google has assured business users that they will have the privilege of 99.9 percent reliability--an important point for the company to stress, as Google Apps outages have occasionally irked its consumer base.

In addition, with the launch of Google Apps Premier Edition, mobile Gmail access is now available for BlackBerry handheld devices. This is available to all BlackBerry users, not just those who have access to a subscription of Premier Edition.

"We're extremely excited, and we think this is something that will be good for the market," commented Matt Glotzbach, head the Google Enterprise Product Team. "Our goal is to provide an application that's a pleasure to use for the end user. All too often, we hear users, especially in larger companies, say, 'Why can't it just work like Google?' and that's what we want to provide: Google applications in a business environment."

The inclusion of the Docs & Spreadsheets applications raises the question of whether Google, which already boasts a business user base of approximately 100,000 small businesses and universities, is aiming to eat into the market share of productivity suites like Microsoft Office and OpenOffice.org. But Glotzbach insisted that the collaboration and mobility functionality served up by Google Apps, accessible from an Internet browser rather than an installed piece of software, makes it a different set of applications entirely.

"I think in some areas, it is competitive (with Microsoft and OpenOffice), but in a lot of ways, we see it as complementary as well," Glotzbach said. "For larger organizations, this is really an alternative that may better suit some types of users: people who are field workers or who aren't necessarily sitting at a desk all the time. This is a much lower-cost, easier-to-manage solution and has a lot of end-user benefits, in terms of portability."

Matthew Brown, a senior analyst at Forrester Research, agreed that Google's new business application suite may appeal to a different sector of the market than programs like Microsoft Office typically do.

"From a marketing perspective, (Google is) going to erode parts of Microsoft's business where people are either overserved by Microsoft's tools or priced out of them completely," Brown said, noting that Microsoft Office's programs are pricier and more feature-heavy than Google's light, Web-based software.

"Not every buyer needs to do complex applications in a spreadsheet," Brown added. "When you look at what Microsoft offers versus what Google is offering through Google Apps, it's very hard to compare them from a functional perspective."

Microsoft, meanwhile, attempted to look unfettered in the face of Google's announcement and drew attention to its Office 2007 product, which was launched last month.

"We are focused on providing our customers with the best productivity tools in the world," Microsoft spokeswoman Whitney Burk said in a statement. "The 2007 release of Microsoft Office is a dramatic step forward."

But Brown disagreed: in his opinion, Microsoft will maintain a sharp eye on Google Apps' expansion.

"Clearly, Microsoft will perceive it as a direct attack," he said. "They've offered Office Live, which is their on-demand set of productivity tools that's supported by an advertising-based model and a subscription model, but there are some barriers that Microsoft will have to face to building a real critical mass around that offering."

In other words, after making a name for itself by selling boxed software, Microsoft may find it tough to tackle the less functional but more versatile Google Apps.

Google, after all, has already grounded itself in a profitable business model for Web-based applications, regardless of whether it charges for them. The advertising model built into its free Google Apps has already proven successful.

"Even if people don't decide to up to the $50-per-user rate per year on a paid-subscription basis, Google still has a lot of runway to make money off of this," Brown said.