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August 28, 2006

Google targets business users; Microsoft threat?

Posted by Kim Peterson at 11:09 AM

Google moves into what it calls its "starting point" for reaching business users: a software bundle that includes e-mail, chat, calendaring and a Web site development tool. The package will be free, at least initially, and Google's Writely word processing application and spreadsheets software are likely to be included later.

Predictably, analysts are saying this will put Google head-to-head with Microsoft, particularly with price-sensitive markets like small business and education. But that doesn't make a whole lot of sense for two reasons.

First, Microsoft has struggled to gain a foothold with small businesses. Mom and pop operations really haven't had much use for the Microsoft Exchange e-mail program, for example. Microsoft recognizes this and since 2003 has been aggressively wooing small businesses. Educational markets have historically been very receptive to Macintosh and Linux, though Microsoft seems to be gaining more traction there.

Second, can you really compare Google's applications with Microsoft's? Would customers really be deciding between Gmail and Outlook? These are totally different creatures, and may not share the same customer base at all.

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"The Google solution is what I'd call patchwork, or Frankenstein, software," Tom Rizzo of Microsoft tells InformationWeek.

"That doesn't mean Microsoft should sit back and celebrate. They are gonna get their *** kicked in this space because of their lack of attention to the Macintosh." says former Microsoft employee Robert Scoble.

"Google is smartly couching its package, at least initially, not as a replacement for Microsoft Office, but as a way to add collaboration features," says blogger Kent Newsome.

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