Another big enterprise win for Google Apps

Much is said about how Google is attacking Microsoft in its cash-cow, Office applications. But another side to the same story is that some 97% of Google's revenue comes from ads and its stock has dropped about 50% so far this year, reports Investors realize that the search giant needs to diversify if it is to continue on its meteoric rise in power. (To be fair, many think Google's stock is still overvalued at over $300 a share, even if it is no longer trading at the astounding rate of $600 a share.) Google needs its enterprise IT apps to be successful, and it is winning accounts, but Microsoft Office is hardly drying up in the wind.

Still, early user case studies of Google's successes are interesting to IT executives looking for cloud-based office apps. We all know the story of how Microsoft's COO Kevin Turner met personally with IT executives at Procter and Gamble to convince them not to sign a contract for Google Docs. But Bloomberg now brings us the story of the city technology chief of Washington, who signed a contract worth almost $500,000 annually in June to bring Google Docs to its 38,000 municipal employees. The CTO hasn't yanked Microsoft Office from users, the story reports, but he has added Docs as an Internet-based alternative. While Google Docs has less features than its Microsoft PC-based counterpart, its document sharing features are encouraging new levels of collaboration between Washington office workers, the story reports.

Meanwhile, Microsoft is working on its own cloud offerings -- and for the worker accustomed to Office, these cloud apps (named Office Live) are a no-brainer to use. Those who sign up for Office Live will see a button integrated into their PC-based Office window that says "Go to Office Live." By pressing that and entering a Windows Live i.d., users are taken to an online workspace that is similar to Google Docs. Office Live Workspace has its failings (installation is a pain), but it also offers more features than Google Docs and tight integration with the PC versions of Microsoft Office. This in turn may offer a good balance between easy-to-share cloud documents and documents that are only stored in the cloud (at the mercy of the cloud provider) and are not available without an Internet connection.

As for the vendors, they both face challenges. Google needs contracts for IT applications but has large volumes of users with accounts to its freebie services. Microsoft has large volumes of IT applications installed but needs more users to create Windows Live accounts so that a broader set of users has access to Office Live Workspace. IT executives need affordable but reliable Office applications. Ultimately, the early IT executive adopters will be the ones that decide who will be the 800-pound gorilla in online office apps -- Google, Microsoft or some other alternative.

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