Google, Microsoft Jockey For Enterprise Dominance

Microsoft and Google go head-to-head next year over online apps for business.
Office Web apps won't have all of the functionality of traditional desktop apps -- for example, the online version of PowerPoint won't offer high-performance video editing tools. And deals with big companies in most cases will be part of a larger Microsoft contract. That will require CIOs to work with Microsoft or its partners to decide what makes sense where.

It could be worth the effort: companies using Microsoft's existing Business Productivity Online suite, which includes Web-based versions of Exchange, SharePoint, and Office Communications, are seeing a 10% to 50% savings compared with what they were spending for licensed versions of those apps, he said.

Microsoft plans to use Office Web to get closer to customers and sell them other Microsoft products and services. With Business Productivity Online sales, "the level of connection and partnerships we have with customers is quite a bit higher," Markezich said.

But don't count Google out. Young people are using Google Apps at home or at school, and increasing numbers are entering the workforce more familiar with Google Apps than Microsoft. Google Apps is getting enterprise street cred, too, with big deals, such as for 15,000 users with Genentech and 12,000 with Johnson Diversey.

And by the time Office Web comes out, Google will have had a 3.5-year head start in selling online apps to the enterprise. Microsoft will have to play catch up in an area increasingly dominated by Google.

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