Google shares closed up sharply today to end the Monday trading session at $380.95, an increase of $7.69, or 2.08% over last Friday's close. The main reason: Google yesterday announced that it would enter the full fray of the managed hosting business by offering email, calendaring, instant messaging and other services to small businesses.With many small businesses having large costs to manage in-house systems for email and calendaring -- Microsoft Exchange comes to mind -- Google wanted to apparently take another shot across the bow of Redmond with this latest offering. Basically, Google is offering to offload main business communication tasks onto its bank of worldwide servers and relieve the expense and expertise of running in-house systems that could potentially save businesses large amounts of cash.
This happens, of course, once an enterprise announcement occurs. Details are sketchy on how Google is going to make any money on this -- outside search ads in its Gmail service -- but if businesses are willing to trust their communications needs to Google, some cold, hard cash may be able to be saved. Sometimes money talks. you know? And then, there's Google's agreement with eBay today, just months after eBay and Yahoo! signed a cross-advertising agreement. Everyone wants to be everywhere these days I guess. As Sheldon recited in the post from The Art of War -- "keep your friends close, and your enemies closer." That strategy works.
Reader Comments (Page 1 of 1)
8-29-2006 @ 7:31AM
douglas mcintyre said...
Google's Tepid Move Into Business Software
Stocks: (GOOG)(MSFT)
Google is challenging Microsoft in the business software arena. At least that is how the headlines read. But, it is a limp beginning.
Google will bundle its Gmail program, its scheduling software, and instant messenging applications so that they can be used by small businesses and non-profits. Universities will also be targeted. The strongest part of the offering is probably that Google will host the software on its own servers which means that small companies will not have to keep the software on their PCs. Google maintains that this PC hosting function is expensive for smaller firms.
Google will also offer a premium version of the service that will be free of advertising and will have the administrative functions that larger enterprises want.
The move is viewed as a challenge to the Microsoft OS and server platforms which will be upgraded next year under the name Vista.
The Google offering does not have spreadsheet or Word-like features to create written documents. Although the hosting aspect of the software my be attractive to businesses, the lack of important features like work processing make it a partial solution at best. It is difficult to imagine that many companies will make the change. It may be used as a supplement to Vista, but it is hardly a direct competitor.
Microsost has no need to worry, unless Google adds the other critical features that make the bundles applications complete.