Genentech Assists Google in Its War Against Microsoft

(MoneyWatch)  Genentech is to rely on Google's online email and document products instead of buying the expensive computer-based software that Microsoft sells to large corporations, according to the Associated Press. Genentech will rent the products from Google:

The Internet search and advertising leader will run Genentech's e-mail, as well as some word processing, spreadsheet and calendar applications, and it will do it over an online connection -- an unconventional approach called "cloud computing."

The decision has turned Genentech, a biotechnology pioneer, into a lab rat for Google and other alternative software services trying to convince skeptical corporate decision makers that cloud computing is more than a pie-in-the-sky concept.

Genentech CEO Arthur Levinson sits on Google's board of directors, but Genentech denies that was the reason they chose Google to provide them with IT services.

Genentech, with 16,300 employees, is the biggest company to cut a deal with Google so far. The company believes it would otherwise have had to spend $70 million to buy a datacenter to run the software.