For Google Apps, 2008 may be the year it realizes less is not more

Only 'several thousand' firms today ponying up for $50-per-user annual subscription

The elegant minimalism of Google Inc.'s search engine is a huge reason for its unparalleled popularity.

But that approach has yet to pay the same dividends for its other Web-based services, especially its online productivity suite, Google Apps.

According to a spokesman, Google Apps has "millions of active users" of its services, which include the three Microsoft Office-like applications of Google Docs -- a word processor, spreadsheet app and presentation package -- along with Gmail, Google Calendar and Google Talk instant messaging.

But the vast majority of those users are using Google Apps for free, via a university or small-business account. According to Google, thousands of schools and half a million businesses have signed up for a free standard account.

Only several thousand organizations have signed up for Google Apps Premier, which costs $50 per user per year.

Apps Premier offers 25GB of e-mail storage per user (vs. 6GB for nonpaying users), a guarantee of 99.9% e-mail uptime, e-mail archiving and security features through its acquisition of Postini, and administration and support features for IT managers.

Only 2.3% of Americans regularly use Google Docs or Apps, according to a recent U.S. survey by NPD Group Inc., with less than 0.5% using them to replace Microsoft Office.

Launched 10 months ago, Google Apps hasn't had much time to steal many of the 500 million global Office users claimed by Microsoft.

But analysts and even paying users say Google Apps needs to be beefed up with features, some already standard to Microsoft Office, if it wants to make inroads, especially into the enterprise.

Google Apps "lacks some fundamental security and enterprise capabilities," said Rob Koplowitz, an analyst at Forrester Research Inc. "I don't know of any business that has made the decision to standardize on Google Apps."

Side dish, not sustenance

"If we deploy it correctly, Google Docs can replace some our Office apps -- but not all of them," said Les Sease, IT director of Prudential Carolina Real Estate in North Charleston, South Carolina.

Prudential has acquired Premier licenses and deployed Gmail for all 1,200 of its office employees and real estate agents. But fewer than 200 are using Google Docs, with an even smaller number using it to replace Office.

Sease would like to switch everyone over completely to Google Apps. But first he would like to see better synchronization between Google Apps and mobile devices, shared online file storage similar to that of Apple Inc.'s .Mac, as well as a simple desktop publishing tool similar to Microsoft Publisher.

For Vance & Hines Motorsports, a Brownsburg, Ind.-based motorcycle shop affiliated with the professional National Hot Rod Association team of the same name, it's Google Spreadsheets' restriction on spreadsheet size and its lack of advanced number-crunching features that is keeping the 42-person firm from completing a migration off of Office, according to Vice President Paul Langley.

"So many people use pivot tables [in spreadsheets] that in my opinion, Google Apps Premier needs that feature," he said.

Moreover, Google's chief advantage today -- its cloud-based collaboration -- is being addressed by Microsoft's upcoming Office Live Workspace, which lets users share and view documents online.

Barriers and bloat

Google's response? That Office Live Workspace, despite a free Microsoft add-on that lets Office users open and save a document straight to Workspace, remains unnatural and forced compared with Google Apps.

"The moment you put a barrier in their way, people stop collaborating," said Rajen Sheth, senior product manager for Google Apps.

Sheth rejected claims that Google Apps is insecure.

"As you can imagine, we are one of the biggest targets on the Web. So we as a company have to be secure," Sheth said. Google has "the best minds in security" constantly testing and probing Google Apps' defenses, he added.

Sheth also pointed out that new features are regularly being added to Google Apps, without requiring IT managers to download and install patches or service packs.

But in terms of rounding out Google Docs with more Office-type apps, Sheth declined to commit, though he said Google will develop only apps and features that would be of interest to 80% of users.

A recent suggestion by the blog ReadWriteWeb that Google Apps should be bolstered with an accounting application would fail that test, Sheth said.

Sheth seemed to agree with a report earlier this month in which another Google executive strongly implied that Spreadsheets will never have advanced features such as pivot tables, macros or offline database integration because it would become too "heavy and bulky for the average user."

Where's the wiki, and does one size fit all?

Google Apps' biggest hole is a lack of a wiki app, Forrester's Koplowitz said, a hole made even more glaring because Google acquired wiki software vendor JotSpot in 2006. That has allowed independent firms such as Socialtext Inc. and Atlassian Inc. to win enterprise customers, and Microsoft to release SharePoint 2007 without fear of competition from Google.

But JotSpot is "a strong candidate" for being added to Google Apps, Sheth said, so wiki features may finally arrive next year.

But even augmented with JotSpot, "Google Apps doesn't kill SharePoint," Koplowitz said.

Making Google Docs work offline through the Google Gears Web plug-in is also "definitely down the line," Sheth said, as is offline capability for Gmail and Google Calendar.

Creating an offline version could make it easier to sell Google Apps Premier in retail stores such as Staples and Office Depot that target small to midsize companies. But Sheth expressed skepticism.

"Because we're a Web company, it's not one of our first inclinations," he said.

Sheth disagreed with the suggestion that Google is de facto engaged in an arms race with Microsoft.

"We're not looking or even attempting to equal the feature list of other apps on the market," he said. "We're not looking to be a replacement for Office. We're focused on collaboration more than anything."

For instance, Google Docs supports all Office document formats up to 2003 and could "potentially soon" add Office 2007's Open XML, too, Sheth said. That's despite Google's official corporate embrace of the OpenDocument format.

Finally, Sheth, who said he "believes" in the "consumerization of IT" trend, says there's no need to spin out another edition of Google Apps with more advanced and enterprise-level features.

"A user is a user is a user," he said.

Copyright © 2007 IDG Communications, Inc.

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