Google sees its Postini acquisition as helping to convince more CIOs to consider the company's Google Apps suite of productivity software. Yet providing companies with E-mail archiving and security is just a tiny step in the long haul Google faces to gain ground on Microsoft Office.

Joe Graves, CIO of Stratus Technologies, is among the doubters. Graves is a huge proponent of hosted software, using the offerings of Salesforce.com and others, and raves about the Google Enterprise Search box he's got plugged in. He's watched Google execs give presentations and calls Google "just a sharp company." But Stratus, a $200 million-a-year computer maker, has standardized on Microsoft Office and will likely stay that way.

"Google Apps would save us some money, but probably create some headaches that would surpass money savings," said Graves in an interview. "It's not clear with Google Apps that we'd have the same interoperability that we do with Microsoft Office." It's even the simple things, he said, like having someone from outside the company e-mail him a meeting invite that automatically pops up on his Microsoft calendar.

Besides, "I took a look at Google Apps and wasn't really impressed with it," Graves added. "It doesn't seem like a comprehensive package."

The $625 million Postini acquisition will help Google pursue businesses of "all sizes," Google CEO Eric Schmidt said in a statement Monday. But it won't be easy selling Google Apps to those with more than a few thousand employees. Google Apps cost just about $50 per person a year, but large corporations that buy in bulk from Microsoft are able to get Office for as little as $100 per license. Plus, moving thousands of people off of Microsoft Office to a new set of productivity tools also carries the challenges of training workers who may be resistant to change.

While Google Apps are meant to be simple, Microsoft has been moving in the other direction, adding more collaboration capabilities in Office and tighter links to its SharePoint server. That appeals to some large companies looking for more collaboration tools to improve communications among employees in far-flung regions.

There are situations where Google Apps makes sense for large companies, and Proctor & Gamble and General Electric are among those testing them. They're not the only ones. "We're talking to a major retailer," said Glen Stoffel, VP of business development at Bluewolf, a Google Apps implementation partner, in an interview. Bluewolf's unnamed prospect has about a thousand stores, each with about eight people using Microsoft Office. Yet they're probably using just a few things in the suite, which makes some 8,000 employees good candidates for Google Apps, Stoffel said.