Google tries to entice Microsoft Office shops with free Apps for Work

19 Oct 2015 | Author: | No comments yet »

Google Goes After Microsoft & IBM By Making Google Apps For Work Free While Customers Still Under Competitor’s Contract.

SAN FRANCISCO (AP) — Google is escalating an attack on Microsoft’s lucrative Office software in an attempt to hit its longtime rival where it will hurt the most.Google wants to make it as easy as possible for businesses that now use Microsoft Office or Office 365 in bulk to give Google Apps for Work a serious look.“If you’re worried about switching to Docs because you still have an enterprise agreement (EA) with another provider, we’ll cover the fees of Google Apps until your contract runs out.

The assault is targeting companies and government agencies paying for Microsoft’s suite of word processing, email, calendar, spreadsheet and other Office programs. To that end, the company just announced that any customer with an “enterprise agreement” can use the Google alternative for free for the remaining life of their existing contract, according to this blog post. The company is using a marketing ploy long used by wireless and long distance companies to entice consumers to switch to its productivity suite, which includes email and video services for businesses. Google, which has been working to make its products more compatible with Microsoft’s software, will also help pay for the cost of transitioning to Google, the Web company said on Monday.

While Google didn’t call out Microsoft or IBM by name when making the announcement, it’s well understood that these are the top competitors for its Google Apps productivity suite and related tools. Google for Work Apps is a web-based platform including email tools, document creation, spreadsheets, and presentation software that focus on collaboration. Then, Google will give customers $25 per user, for up to 3,000 users, to help them manage the change, whether they need to spend that money on data migration or training on advanced features for employees. The blog post never mentions any rivals by name, but it’s safe to assume that Microsoft MSFT 0.38% is in Google’s crosshairs, although so to are customers still using IBM IBM -0.88% Domino (once known as Lotus Notes). In exchange, Google is asking potential customers to sign up for its Apps services at least a year after a competing contract expires. “A lot of companies are entrapped in a costly and opaque licensing agreement,” said Rich Rao, who oversees sales for the Google Apps business.

The package has made great strides with new features like “voice typing,” but Google remains dogged by the perception that it doesn’t know how to sell into big companies the way Microsoft does. Microsoft, of course, has reacted and in recent years has promoted the use of Office 365, a subscription-based version of Office (along with email and other capabilities depending on the version). The offer underscores Google’s confidence in the quality of its software and its resolve to undercut one of Microsoft’s most valuable franchises, said Aragon Research analyst Jim Lundy said.

Microsoft, which sells both cloud-based and packaged software, is the dominant provider of productivity software to businesses, according to Mr Lepofsky. Although Google pioneered a number of Web-based technologies to let multiple people work on a single document at the same time, that hasn’t translated into a leadership position, he said.

Microsoft’s Office division generated $23.5 billion, or roughly one-quarter of the software maker’s revenue during its last fiscal year ending in June. If Google can truly make this easy that could be attractive to companies wary of sifting through terms and conditions and facing software audits by those vendors. There can be technical, cultural, political and financial challenges involved in switching vendors and products, said Alan Lepofsky, vice president and principal analyst for Constellation Research.

But the Mountain View, California, company has diverting some of the money it makes from advertising to chip away at Microsoft’s dominance in office software since it introduced a suite of competing programs nearly a decade ago. At that time, Google was trying a different approach by requiring an Internet connection to use its software instead of installing the programs on the hard drives of individual programs. By taking on the costs associated with an EA – a tool Microsoft uses to keep customers locked into contracts for longer periods of time in return for better pricing – Google is fighting back against one of Microsoft’s most powerful tools associated with retention. In the past, some analysts have questioned the company’s commitment to business services, but Google says it’s fully committed to delivering enterprise-grade services. “We’re at a point where we’re doing things CIOs typically expect,” said Mr. Now, Microsoft and most other software makers sell subscriptions that allow online access to their programs so they can be opened on personal computers, tablets and smartphones.

That includes regular roadmap updates, customer summits and measuring customer satisfaction. “Google has been all in for our company,” said Jim Nielsen, a manager of enterprise technology planning at flooring company Shaw Industries, a subsidiary of Berkshire Hathaway, with approximately 23,000 employees. Google’s new business software offer “represents a continuing saga in the battle with Microsoft for control of the desktop and mobile devices,” Lundy said.

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