Capgemini , a major global services provider, has just partnered with Google to enable large-scale adoption of the enterprise version of Google Apps. Capgemini will provide training, support, integration, and other services to large organizations that implement Google Apps Premier. It’s a small but momentous event, signaling increasing enterprise interest in free Web-based apps that look and feel like Word, Excel, and other Microsoft Office software.
Google Apps was added to the portfolio of products Capgemini supports because the company believes demand for SaaS (software-a-service) productivity suites will grow strongly in coming years. Steve Jones , a CTO at Capgemini, is quick to note that Google Apps will not displace Office, but will fill two niches: enhancing the ability of knowledge workers to create documents collaboratively and bringing Office-like capabilities to workers who would not otherwise have them.
Nonetheless, adoption is bound to increase. "I'd expect more and more IT services companies will offer that kind of help desk and support around the Google Apps Premier environment," says Rebecca Wettemann , an analyst with Nucleus Research .
"Now is the time to definitely have advanced technology folks and strategy people, the ones who look a year or two ahead, to look at this stuff and stay abreast of it, even if the time isn't yet right to purchase," says Burton Group analyst Guy Creese . "A huge mistake would be to look at the offerings today, say they're immature, and then not pay any attention."
At this point, with viral adoption of Google Apps happening under IT’s radar, attention is already being paid by rank in file employees. And Google is far from the only provider. Several smaller vendors with strong offerings, including Zoho and Zimbra , compete directly with Google Apps. Cisco Systems now offers its WebEx WebOffice platform for collaboration, while a number of applications in Salesforce.com’s AppExchange venture into desktop productivity territory
Waiting for Redmond’s shoe to drop
Conspicuous by its absence is Microsoft, which has been unable or unwilling to come out with a hosted suite comparable to Google Apps. Many wonder if Microsoft is having a hard time figuring out how to develop a hosted version of Office without cannibalizing its offline business. "A challenge for Microsoft is to figure out how to get people to buy the next version of Office if there is also an on-demand version," says Wettemann.
Yet few doubt that Microsoft will eventually respond with a direct competitor to Google Apps and other similar suites. When it does, the effect on the market will likely be significant. "I think Microsoft needs to worry about it now because it takes a while to get right," Creese says. "In hosted office suites, it's going to take a while for companies to figure out how they want the thing to work."
In defense of the current strategy, Microsoft officials have said that Office has steadily gained hosted service components for years, and that combining local PC software with services in the cloud is the right approach. Steve Ballmer elaborated on this point last May at the Software 2007 conference.
Last week, Microsoft released a unified installer to help users download updates for its family of Windows Live hosted services. Yet those who have been waiting for Microsoft to make a power move found the announcement underwhelming and dismissed it as cosmetic.