IBM Corp. (NYSE: IBM) is a name many businesses know very well. The former largest computer company on the planet left the hardware game a long time ago to concentrate on consulting services and business software. But, IBM's next nemesis won't be a company out of Redmond -- but a name on the tongues of millions these days -- Google Inc. (NASDAQ: GOOG).
Google's recent expansion into the software-as-a-service market with Google Apps, Google Docs and even Google Gmail has many wondering how one of the top consumer brands in the world can fare in the business segment. IBM may be trying to head off that challenge by offering a bare-bones business email service for $36 per year per user compared to Google's offering at $50 per year per user. That $14 difference? Google give you just about everything a standard office or remote worker could use, including word processing, spreadsheet and presentation tools, a video channel to use for video conferencing and 25 times to email storage space IBM is providing. IBM, however, has to do something.
Google's increasing popularity and Microsoft Corp.'s (NASDAQ: MSFT) extremely popular Exchange server service are slowly eating IBM's Lotus business to death. This isn't IBM's first foray into "cloud computing" -- where companies trust corporate communications to providers on the internet instead of expensive local IT installations -- but for Google it's confirmation that the cloud-based (the "internet" is the cloud) software-as-a-service industry as about as live and well as it's ever been. This is Google's only home and it's been successful there, so entrenched computer companies want a piece. That is, if you believe Bill Gates' memo from 2005.
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