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February 22, 2007 | Comments: (0)
Can Google Apps Premium make money or is it just meant to pop Microsoft's balloon?
For me it is not a question of whether or not Google Apps Premium Edition for $50 per year, per user, will be a Microsoft killer.
Over time, as SaaS [Software as a Service] becomes ubiquitous and is acceptable to enterprise-level companies, it certainly could put at the least a very big dent in Microsoft revenues.
Imagine all the money a large company with 10,000 or more employees would save if they didn't have to license Microsoft Office? It would be in the multi-millions of dollars saved.
My question is will Google Apps Premium Edition make money for Google? Certainly not at $50 a year.
The more business subscribers they get at that low rate that have to be supported, the bigger the drain not gain it will be on the Google bottom line.
No, either Google would have to slowly up the price or make it pay for itself by supporting some form of advertising model. But what kind?
Google's current financial success rests on the fact that they get paid every time a user goes from the Google site to a company's site.
Can Google Apps support that model? I don't think so.
Will it support a banner advertising model? I don't see how.
Nobody reads banner ads much and besides you don't want anyone messing around with your screen as you type a report or crunch numbers in a spreadsheet.
We are left with two reasons why Google is doing what they are doing. One, they just want to deflate Microsoft or two, they have a business model in mind that we don't yet know about.
Well, we'll have to wait and see.
Posted by Ephraim Schwartz on February 22, 2007 03:19 PM
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I am all in favor of popping Microsoft's Office bubble. However, I use OpenOffice.org which is free (not $50 per year), has far more features, and accessibility does not depend upon the vagaries of Google's servers. I really loved Google calendar but I had to stop using it because once the file got too big it would not load properly no matter what. Now I keep my calendar on my desktop with Mozilla Sunbird.
Posted by: Jeffrey W. Jensen at February 22, 2007 05:21 PMGoogle Apps is competition for Exchange NOT Office. My bet is Google Apps will move towards file synchronization... and you will be able to do that through the API.... and the API is the key.. not the AJAX interface. for example we are developing an FREE open source "business application platform" (think salesforce.com). Our first application is working tightly integrated with GOOGLE APPS. Check it out if you are interested. www.applicationexchange.com
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