Bill Gates on Google Apps – He’s Right and Wrong at the Same Time

I haven’t had much time for blogging lately, but this one caught my eye:

Gates to Google: “Your business applications stink” | The Open Road – The Business and Politics of Open Source by Matt Asay – CNET Blogs

(Disclaimer – I’m a former Googler and have been using Google products for productivity and personal purposes for over 2 years.)

Matt Asay, who does a good job covering open source developments, has a short piece where Gates points out the flaws in Google’s web-based productivity suite.

If Google ends up getting meaningful market share in this space (and I believe they will), this will go down as one of those quotes you see in a future version of “The Innovator’s Dilemma” – it’s just classic. This is my favorite pull quote:

If you’ve seen … the Google tools that have tried to do productivity type things, they really don’t have the richness the responsiveness. You can see that relative [to] the success they have had there. Most of these Google products, to be frank, the day they announce them is their best day and then after that ..

At the end of the day, Google Apps do not compare favorably to Microsoft Office apps on a head-to-head basis. And it’s likely to stay that way for some time given the richness available from Microsoft’s desktop products. Microsoft has built an ecosystem around Office and many people depend on it every day.

This reminds me a lot of the kinds of comments I heard about web-based email and mobile phones when they were relatively new concepts. My mobile phone is just now beginning to approach the reliability of my landline phone. Somehow mobile phones have managed to grow nonetheless. The reason is simple -for some use cases, the new technology far outshines the previous alternative and renders comparisons meaningless.

The real compelling use case for Google Apps is distributed collaboration. They really shine in a situation where a distributed group is trying to share information or iteratively update a group project. It’s also a great solution for small businesses who don’t want to or can’t afford to implement a full Exchange environment with Office on every desktop.

If Gates’ focus is on penetration among customers who value richness, Microsoft will get blindsided by Google Apps. Google Apps’ existing adopters are people who value the online collaborative elements over the depth of functionality offered by desktop alternatives. If Google does things correctly and continues to both add in popular features from MS Office and do things that simply can’t be done in an isolated desktop environment (like real-time collaboration on the same document where you can both see changes as they’re made, a common spreadsheet that everyone can work on simultaneously, etc), the Apps suite will become “good enough” for a larger number of users.

By the time Google Apps show up AND (and the AND in caps is intentional) are heavily used at major Microsoft houses, it will be too late for Microsoft to do anything about it – Google will have gotten there by improving the Apps suite until it matches the functionality that Office provides.

Aside from the ability to learn about what major enterprises need to have before they’ll flip the switch to web-based apps and the chance to land a few marquee accounts, I don’t see much value in pitching large, entrenched Microsoft houses today. I don’t believe there are a lot of large businesses out there ready to make the wholesale switch today.  There is a much larger opportunity for Google to go after people who don’t yet have a solution (new businesses, web-based SMBs) than to try to convert Microsoft users who have solutions that are more feature rich.

Aside from barking up the large enterprise tree, the real danger I see for Google is focusing too much on MS Office parity. At the end of the day, I’m of the mind that time is better spent building out features and functions that you can’t do on the desktop than simply trying to duplicate every feature in Office.

Last thing, life outside of Google has taught me that there are a lot of people who have really optimized their work around the use of MS Office desktop apps. They don’t “trust” cloud-based apps for their work any more than early mobile phone adopters would have lived without a landline as backup. Getting meaningful usage of Google Apps is going to be tougher than simply getting sales and closing deals – employees are going to have to get comfortable with the tools and see them as a better way to get their jobs done than the status quo.

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  • Given all the noise MS has made about building their own cloud-based apps, seems this is more classic FUD to help delay adoption of the Google offering rather than an actual strategic assessment.

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  • I don’t think Google’s target audience (right now) is the power user anyway; I think they’re accommodating the same type of person that pirates Adobe Photoshop. Some people only need the basics and rarely. Why pay for Word if I only read one document a month, if that, and create even less? Not to mention, there’s the convenience of being able to read a document without needing reader software or even to download it to my machine.

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