Google will basically pay your business to switch to Google Apps

20 Oct 2015 | Author: | No comments yet »

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

The assault is targeting companies and government agencies paying for Microsoft’s suite of word processing, email, calendar, spreadsheet and other Office programs. SAN FRANCISCO—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.Case in point: Google is now so hell-bent on attracting new Google Apps customers, it’s offering to cover the costs of outstanding enterprise agreements companies may have with other enterprise software companies like Microsoft.

Google Inc announced on Monday that it will offer its Apps for Work suite free to businesses currently locked into agreements with other office software vendors. Google Apps includes Gmail, Hangouts for voice and video calls (single or group), Calendar, Drive for cloud storage, Docs for word processing, Sheets for spreadsheets, Forms, Slides for presentations and a web site builder. 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. Employing an offer associated with wireless and long distance companies, the company wants to entice consumers to switch to its productivity suite, which includes email and video services for businesses.

The price for the ”Google for Work” software will be waived for the duration of the defecting customers’ existing contracts with Microsoft or any other supplier. 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. The free trial may grab some attention, but Ross MacMillan, Microsoft analyst with RBC Capital Markets in New York, doubts it “will have material impact” on Google’s biggest enterprise competitor, Microsoft Corp.

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. During the fourth quarter of 2015, Microsoft’s cloud-based Office 365 Commercial, a competitor to Google’s App product, saw its user base grow 74 percent from the previous year, and it was adopted by 50,000 new small businesses per month during the fiscal year, according to a Microsoft spokesperson. The blog post never mentions any rivals by name, but it’s safe to assume that Microsoft MSFT 0.19% is in Google’s crosshairs, although so to are customers still using IBM IBM -5.77% Domino (once known as Lotus Notes).

And it says it will chip in on some of the deployment costs following the earlier contract’s expiration, by also connecting the new customer with a Google for Work Partner. 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). Google’s aggressive grab for Microsoft and other enterprise productivity business is less surprising when you consider how former enemies like Apple and IBM have gotten in bed together to go after large-scale vertical industries like travel and construction with industry-specific mobile apps.

Google hopes to boost its reach by tackling what it sees as the two biggest roadblocks to businesses trying Google Apps for Work: customer enterprise agreements and the challenge associated with changing from old software to a new service. “It’s a barrier because companies are trapped and they’re locked in to some contractual term to their previous provider,” said Mr. 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.

The Surface Pro 4 and Surface Book are both pitched as productivity devices, not entertainment tablets, and Apple’s iPad Pro is a big-screen tablet with an optional digital Pencil and Smart keyboard (Microsoft actually took the Apple stage and touted Office for the iPad for the iPad Pro). 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. 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. 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. Microsoft’s Office 365 for consumers is a success, but there are also a lot of young, future productivity workers who have grown up using Google Docs in school.

Microsoft, which is based in Redmond, Wash., also has been trying to chip away at Google’s dominance in Internet search and advertising for the past decade, with little success. Enterprise has a history of using powerful productivity apps, which means Microsoft has the advantage, but Google is willing to fight for its piece of a valuable pie that looks better than the consumer business because it includes monthly and yearly fees and contracts.

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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