GAYD gone; Google Apps takes on Microsoft Office

The Google Apps for Your Domain (GAYD) brand may be no more, but its successor, Google Apps, has taken on a much higher profile today: Google’s announced the for-pay Google Apps Premium targeted at large organizations.

The premium package bundles:

• Gmail (10GB storage, ad-free, with BlackBerry support)
• Google Calendar
• Google Talk
• Google Start Page
• Google Pages Creator
• Google Docs & Spreadsheets

For $50 per user/year.

Premium users get access to a set of APIs (such as single sign on through parter services from Sxip), which should allow enterprise customers to integrate their Google Apps suite with other applications.

The New York Times is just one of the many pubs covering this announcement to note that this is Google’s most direct threat to Microsoft yet:

By comparison, businesses pay on average about $225 a person annually for Office and Exchange, the Microsoft server software typically used for corporate e-mail systems, in addition to the costs of in-house management, customer support and hardware, according to the market research firm Gartner.

Google said initial customers of Google Apps would include a unit of Procter & Gamble and SalesForce.com, a pioneer in the business of delivering software as an Internet service.

“We are in the process of phasing out Microsoft Office and Exchange from our company,” said Marc Benioff, the chief executive of SalesForce.com and a frequent Microsoft critic.

GE, incidentally, is another enterprise charter customer for Google Apps.

Despite the coverage, this is by no means a battle of equals. Yet. Microsoft’s Office suite is more complete (it includes a local database and presentation program, and is tightly integrated with Microsoft’s business graphics and project management tools), more powerful, works offline, and is more entrenched (a scary amount of people’s work involves Visual Basic for Applications scripts). Those strengths, however, are also Google’s opening.

Microsoft claims nearly a half-billion Office users out there, about 7.5% of the world’s population (that number seems crazy, but I bet that official estimate doesn’t even account for people using pirated copies!). You can be sure that a huge chunk of that user base barely scratches the surface of what Office can do. They use Excel to make lists and perform simple arithmetic. They use Word as a glorified text processor. They never touch the journaling features in Outlook. If big companies can serve those users’ needs with Google Apps tomorrow as well as they do with Office today, I’m sure they’ll at least take the time to crunch some numbers and ask some questions.

Their business cases will, no doubt, be created in Word and Excel, and presented in PowerPoint.

Source: Google Press Center: Press Release