Google caught in a hailstorm?

With the launch of Google hosted applications that compete with Microsoft Office, it seems natural to look at the history of hosted apps to see if Google Apps will really threaten Microsoft. Mary Jo Foley  compares Google Apps to Microsoft’s 2001 hailstorm service. She has some good points, and anyone launching a hosted service will face the IT department’s resistance to letting go of company data. However, I also think that things have changed significantly in the 6 years since hailstorm and I think that Google will get a much better reception in 2007. So why do I think things will be different this time around?

  • The need to share information outside of the corporate network is bigger than ever. In order to do business, companies need to communicate quickly and efficiently with their geographically dispersed colleagues, suppliers, partners and customers. We all know that emailing large spreadsheets around is a poor way to manage information and an efficient alternative will be welcomed by information workers.
  • SAAS has also become part of the IT manager’s scorecard. The use of portals, and application servers means that they are used to working with data that sits outside of their control, so the tight grip on company data is loosening slightly.
  • There are clear precedents for outsourced applications (the obvious one being, whose subscribers only really started to take off in 2004/5).
  • And finally, I’ve seen a huge change in the way that IT is adopted by companies. BlackBerries, iPods and RSS all began their life in the hands of the end-user, and IT departments had to adapt to the ever increasing demands of their clients. IT departments are becoming more service oriented (I wonder if this has anything to do with the increased offshoring of IT). And if they’re not service oriented, then users are willing to go elsewhere. (I’ve just got off the phone from a client who was complaining that it took 6 months for their internal IT team to update the fields of one of her databases. She’s now looking to outsource it (and host it externally) so that she can get more responsive updates.

That’s not to say that Google Apps is going to have it easy. Attitudes towards enterprise outsourcing are changing, as the business benefits become clearer, but there still a long way to go before the default choice is to rent your application over the internet.


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