Google’s apps no threat yet to Microsoft

May 21, 2007, 5:06 PM UTC
Fortune

It’s amusing how good Google (GOOG) has gotten at the PR game. An item (behind-the-paid-wall link alert) in Monday’s Wall Street Journal about a partnership brewing between Google and Salesforce.com (CRM) notes how in February Google launched a paid version of its collection of online productivity software applications called Google Apps. I wrote an article here about the launch, and I wasn’t the only observer to point out that Google now was going directly after Microsoft’s (MSFT) Office franchise.

There’s just one catch. Three months on and Google hasn’t started charging the $50 per user per year it said it would charge for the “premier” edition of Google Apps. (The high-end version gets each user Gmail, Google Calendar, Google Talk and Docs & Spreadsheets, plus 10 gigabytes of storage and round-the-clock customer service.) Initially, Google was going to begin charging at the end of April. Now, Dave Girouard, the Google vice-president in charge of the product, tells me the money will start flowing at the end of May. What’s more, says Girouard, Google is contemplating an ongoing “trial period” for new users. He won’t say how many users Google has signed up or the names of any significant companies that are using the product in large numbers. (In fairness, the target market is small companies.) Girouard dismisses chatter that users are dissatisfied with the product, though he allows that “there are some areas where it is rough around the edges. These are still early days.”

Precisely. The media tends to get carried away by Google product announcements, much the way any new Microsoft offering once was greeted by the sound and the fury. Microsoft may be in a pickle over its continuously stillborn online advertising business. But it needn’t worry about losing out in the word-processing game to Google just yet.