Enterprises hold onto Microsoft Office despite Google Apps option

Google Apps is making headway over Microsoft Office in startups and SMBs. But inside enterprises? Not so much.

Cost-conscious companies and startups can ditch Microsoft Office for cheaper, more flexible Google Apps products, and it's no big deal. But large enterprises with their own data centers and IT staffs continue to resist.

IT consultant Louis Rosas-Guyon of Miami-based R-Squared Consulting migrated eight companies off Office and onto cloud-based Google Apps, but the largest customer had only about 200 employees.

Enterprise customers usually cite concerns about data security and compliance with regulations such as the Sarbanes-Oxley Act as reasons for their reluctance to use non-Office productivity apps.

"[Large enterprises] have existing solutions in place that provide the same services, so the cost savings aren't as strong an argument," Rosas-Guyon said.

Plus, it's tough to give control to an outside source. That's part of the reason Andre Preoteasa, IT director at Castle Brands Inc., a New York beverage importer, didn't pull the trigger on a Google Apps migration after evaluating it last year.

"If I had to tell people in my company, 'The email is out, and I have no control over it,' coming from the director of IT, that would undermine my title."

Google's secret weapon -- collaboration
While large companies aren't yet willing to move from Microsoft Office, they might not have a problem dropping SharePoint in favor of Google's collaboration capability.

Google recently added a feature to Google Docs that lets users upload any type of document, presentation or spreadsheet -- including Microsoft Word, Excel and PowerPoint files -- into Google Docs and share it over the Web in the same way Google Docs are shared. Users can also edit shared documents at the same time and view changes as they occur.

This feature gives Office shops a safe way to try Google without making a switch. Supporting Office is a smart move by Google, since many companies use both products now, said Michael Cizmar, managing partner of Chicago-based IT consultancy Michael Cizmar + Associates Ltd.

"There is tremendous value in sharing spreadsheets and data online, and that is where Google will compete," Cizmar said.

One indication of the interest in Google's collaboration offering is that software companies such as LTech offer tools like CloudMove to migrate users off SharePoint and onto Google Apps.

Good deal for SMBs with limited funds
Small and medium-sized businesses (SMBs), as well as startups, are attracted to the Google Apps suite because they can't afford to build and staff a data center or even buy Microsoft Office software licenses.

Users can get the Google Apps Premium Edition messaging and collaboration suite for $50 per user per year and get a 99.9% uptime service-level agreement. This compares with Microsoft Office 2007 pricing of $399.95 for the Standard edition. Microsoft's volume-license agreements lower this price, but volume packages don't make sense for startups with five or fewer seats, and it's still more expensive.

For $50, Google Apps Premier includes Gmail, Google Calendar and Docs, Google Talk, Google Video, and Google Sites with an additional 18 GB of Gmail storage (for a total mailbox size of 25 GB) and more.

Shaneal Manek, chief technology officer and co-founder of Postabon, a New York-based startup that offers deal-locator apps, went with Google Apps to keep IT costs low. He runs the company with almost no internal infrastructure, using Google Docs, Dropbox for file sharing, GitHub for coding, Google Apps for email and calendaring, and Basecamp for domains and task management.

"We don't want to have an IT department, run servers or be tied down to particular computers," Manek said. "Also, at the scale we're at -- about 10 employees -- a full-time sysadmin is relatively expensive. [Our] developers' time can be better spent building our competitive advantage instead of wasting time configuring a file server."

Similarly, Jason McAninch, president of the IT consulting firm J-TEK, said several of his clients have switched to Google because "the infrastructure Google provides is also better and more secure than many small companies can afford." It is also cheaper than Microsoft's licensing, and with Google Docs, "users are not tied to a specific PC," he said.

As for Google's support, the people interviewed for this article had no complaints. Rosas-Guyon said the one problem he had was handled by email and was resolved within 30 minutes.

"I don't deny that there will always be a need for the 'boots on the ground' technician that can troubleshoot problems locally. There really is only so much that can be done from a remote location," Rosas-Guyon said. "However, once a company makes the move to Google, they can reduce their in-house tech staff in favor of outside contractors that work either on a break-fix model or on a managed service model."

Who uses Google Apps?
Google says its Apps suite is catching on quick and claims that 2 million businesses use its productivity suite. Gartner's numbers are less optimistic: Analyst Michael Silver said in most cases people are using Google only for email, or they haven't moved completely off Microsoft Office.

According to a Gartner survey of 130 respondents representing 2 million PCs in October 2009, only four respondents said that Google Docs was sanctioned by IT in their organizations, and those Google Docs users said they also use Microsoft Office.

At this point in the game, Microsoft's Office products are more robust than Google Docs, but Google is constantly updating features, and the market has started to gravitate toward cloud computing apps, Silver said.

"Maybe in five years we will look at the Web products from Microsoft and Google and see that it is useful or a larger segment of the population," Silver said. "But even if Google [Docs] offers the same level of features as Office, Microsoft is resilient and competitive. They will do what it takes to maintain their position, and that includes jumping on bandwagons and lowering prices."

Let us know what you think about the story; email Bridget Botelho.

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