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Google Inc.'s (NASDAQ: GOOG) Google Apps project has gained steam (and customers) since its introduction a few years ago. Although it's not yet a true competitor to Microsoft Corporation's (NASDAQ: MSFT) Office juggernaut, it is making headway.
The "software as a service" camp is doing nothing but speeding up, as small and large businesses would like to offload expensive software installations and just use the Internet as a vehicle for getting things done across boundaries and time zones. Microsoft, though, is not capitulating just yet.
Ole' Softie has just slashed the per-user pricing for its online email and productivity suite to more closely align its pricing with Google's offering. Instead of hosting and maintaining a complete Exchange email/calendar/contact server, customers can rent Exchange Online for $5/month per user instead of the previous $10. Microsoft also substantially lowered access pricing to its Business Productivity Online Suite (a whole bundles of applications) to $10/month per user, down from $15.
In addition, the storage per user was raised from 5 GB per month to 25 GB, matching what Google Apps provides in terms or storage space "in the cloud." Microsoft is definitely playing catch-up here, and with the City of Los Angeles recently deciding to adopt Google Apps for 30,000 employees, yet another race between the old guard and the new blood is afoot here. If the "software as a service" arena is to become more competitive, Google already has a large foot in the door -- and Microsoft just stepped on its toe.
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