Last Updated Sep 18, 2009 10:09 AM EDT
This "impressive uptick in the use of Google Docs" isn't taking share away from Microsoft's Office suite just yet, the IDC analyst says, as the two sets of products feature differing strengths. Google Docs is much better when it comes to sharing and collaborating on documents in real time, while Office offers a richer feature set.
But Google offers customers the opportunity to reduce their software expenses considerably by providing tools that are "good enough" for 80 percent of their workforce. Webster writes that
the growth in adoption of Google Docs should worry Microsoft. Google's momentum could indirectly threaten some of Microsoft's Office 2010 upgrade revenue by providing buyers some negotiating leverage.More than that, Google is giving customers reasons to get excited (Google Wave, a forthcoming collaboration and communications tool, has been compared to "real-time email on crack" and is generating enthusiasm among both developers and end users who have had a chance to see it) whereas Microsoft hasn't created anything new or innovative since it introduced Excel.
Moreover, Google doesn't have to win wholesale replacements to win this game. Business applications vendor Salesforce.com showed that software-as-a-service vendors could win enterprise accounts piecemeal, even against the likes of an SAP or Oracle, by starting with small departmental buys and allowing customers to do the rest of the selling for them.
The two rivals aren't competing for productivity application suite deals head to head in many enterprise environments just yet, but Google versus Microsoft bake-offs will become more prevalent as Microsoft begins rolling out an online version of Office 2010 and Google's offline editing tools gain traction. The stakes are high for Google as it tries to diversify from purely ad-based revenues, but are much higher at Microsoft, for which Office is one of its two big cash cows.