Microsoft takes cloud fight to Google

Google and Microsoft are scrapping to get their office apps into the enterprise cloud

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After all, while Google may have been first to the market, the company still makes most of its money from search. Google Apps hasn't yet proven to be a money-maker. Microsoft, on the other hand, may be late to the dance, but its Office applications are known around the globe and account for much of Microsoft's revenue.

"If history is any indicator, Microsoft is well positioned to succeed within what has become a very cloud-centric collaboration and productivity marketplace," said Brad Shimmin, an analyst at Current Analysis.

"In the '90s, Microsoft ignored the importance of the Web, for example, allowing rivals such as Netscape to dominate the browser market. But Microsoft was able to quickly turn the tables, creating what has become the de facto standard for Web browsers, Internet Explorer," Shimmin said.

"Given the central role Microsoft's desktop-based collaboration software will play in Office 365, I think it is likely that Microsoft will give Google a run for its money," he said.

Rob Enderle, an analyst at Enderle Group, however, said Microsoft might have a harder time making headway into the enterprise cloud market. "[Microsoft's] user base is tied tightly to their client-based offering, and Microsoft doesn't want to move them," Enderle said. "This limits how much they will want to promote the [Web-based] offering."

Analysts said that if Google really wants to compete in the productivity application market, it better focus its efforts more sharply.

"They need to decide which fights they want to really fight," Enderle said. "They do most things outside of search half-assed and, at some point, they will need to bring up their game and focus more if they want to be more than just a search vendor living off advertising revenue."

Olds agreed that Google needs to improve its game.

"They're going to have to improve the quality of their apps, the integration of their applications and do whatever they can to match what Microsoft is bringing to the table," Olds said.

"It's not like this move is suddenly going to make people drop Google Apps. It's more that this will be a real impediment to its growth," he said. "A large number of people using Google Apps are using it because they either hate Microsoft or they're people who really just need that Web interface. Those latter folks will be the ones in play now. They're the ones that Google could lose if they're not careful,"

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at  @sgaudin, or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com.

Copyright © 2010 IDG Communications, Inc.

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