These comments indicate a move that will further fuel the rivalry between Google and Microsoft in the market for office productivity, communication and collaboration software.
Google, a newcomer in this market, has chosen to provide its suite under the Software as Service (SaaS) model, a popular approach in which manufacturers are the ones who host the software and information, supplying them to their customers through from Internet.
Microsoft, a veteran with its ubiquitous Office suite and the Outlook / Exchange messaging and collaboration platform, is beginning to react to this trend, although its software is still primarily designed to be installed on customer’s own servers.
Currently, Google offers a free and profitable version by including Apps advertising, designed for end users and small businesses; while the subscription version called Premier is aimed at companies of any size and is priced at $ 50 per user per year. This figure is considered an aggressive price compared to the cost of the equivalent Microsoft software.
While the end-user and enterprise versions share the same base applications, such as Gmail, word processing, calendar, spreadsheet, and presentation programs, App Premiere has a variety of IT management tools as well as several APIs (interfaces application programming) for integration with other software.
As Dave Girouard, president of Google’s Enterprise unit, said at the Pacific Crest Technology Leadership Forum, “Our intention is really to provide more value for the same price and offer an amazing proposition to businesses.”
Girouard stressed that the current strategy focuses on increasing the user base by making the suite more attractive without increasing its cost.
“We hope to maintain the price and add more and more value for the same cost. We want to have commercial relationships with many companies, and we care more about obtaining that than not the amount of dollars that we are obtaining per user. In fact we can maintain that price. We will continue increasing capacities. For us the cost of an additional application is small. There are certain types of applications that we could add and that would add cost so that we would have to price accordingly, although I do not think that the price will increase. That would not be my expectation”.
Girouard has not provided details on the type of applications or new features that Google is planning to add to Apps.
As Girouard has indicated, more than 500,000 companies and universities have signed up with the subscription versions of Google Apps, which translates to around 10 million active users of the suite.
In general, the concerns of App Premiere users are not focused on the price of the subscription, but rather these tend to be more focused on the security of hosting the software and information outside their facilities, as well as on Google’s plans for the future of the product.
