Microsoft: Google Apps No Threat (MSFT, GOOG)

How is Microsoft (MSFT) responding to Google’s (GOOG) new initiative to recruit salespeople for Google Apps, the cloud-based word processing and spreadsheet suite? We reached out to Microsoft to ask Alex Payne, a director on the Office team, for his view.

As far as Alex is concerned, Google Apps is no threat at all. Here’s what he told us:

  • Microsoft has an enormous number of resellers with deep connections to the enterprise, something upstart Google lacks.
  • Google Apps may be winning over a few users, but its number of paid users remains tiny.
  • Office 14 will have cloud-based capabilities too, if that proves to be a selling point with consumers. But Alex was confident there’s still a role for the client. “SaaS [Software-as-a-servce] isn’t a vision, it’s a product offering,” he said.
  • That said, many customers will never move to the cloud for “political or regulatory” reasons. He cited a lawyer working on confidential briefs, for example.

Also no comment on whether to expect Office 14 this year or in 2010.

We agree with Alex that Microsoft still has an incredible lead over Google in distribution and features. We also agree Google will have a devil of a time trying to make real money off Google Apps.

But that’s Google’s problem. The problem for Microsoft remains they’re trying to charge a lot of money for a product that hasn’t significantly changed in over 10 years, while Google has something 90% as good (and getting better) that’s free.

See Also:
Google Finally Hiring Salespeople To Sell Google Apps
More Microsoft Slowness: No New Office Until 2010?
The Google Apps Revenue Myth: $10mm In 2009


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