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Gartner Dissects Google v. Microsoft Cloud Battle
Organizations should start experimenting with Web apps from Google, Microsoft and other software companies. That's one of the conclusions from a Webinar presented by two Gartner analysts Tuesday.
Web apps are becoming "just good enough" for the enterprise, said Tom Austin, a Gartner vice president and fellow. Austin, along with colleague David Mitchell Smith, provided some general guidance to organizations trying to react to shifts in the IT software market, such as the potential use of Web service offerings and thin clients in the enterprise.
In the "Google vs. Microsoft: A Battle for the Clouds" Webinar, the two analysts mostly dissected the ongoing Internet cloud slugfest by the two software giants.
Smith explained that Gartner doesn't think that Google attacked Microsoft's business first. Instead, the real story is that Microsoft is pursuing Google's business, which is almost wholly focused on search and advertising. Google's push into the enterprise space is considered to be more of a defensive reaction to Microsoft's attack. About 97 percent of Google's $23 billion in revenue came from search and advertising. Google Apps Premier Edition (GAPE), which includes the corporate Gmail service, represents a drop in the bucket in terms of Google's revenue.
"GAPE is a tiny, tiny, tiny sliver," Smith said. "In fact, [Google] reported in Q1 of 2010 a total of $300 million in revenue attributed to 'licenses and other,' of which we estimate that less than $100 million came from enterprise sales of GAPE."
Google has the potential to do much more than search because it has built out a massive datacenter complex running Linux, which gives them "a significant cost advantage" for delivering services such as Google Gmail, Austin explained. G-mail is "good enough for enterprise use," he added, and "a viable contender." Google had a 57 percent growth rate in Gmail use between the first quarters of 2009 and 2010. However, Gmail use is not anywhere near the mass adoption rate of Microsoft's solutions. Other enterprise Gmail targets for Google include IBM Lotus Notes and Novell GroupWise users.
Google Docs, Google's hosted productivity suite, "isn't there yet" for enterprise use, according to Austin. "We don't see it as an aim for Google to replace [Microsoft] Office," he added. Organizations could consider using a hybrid approach, with some users getting Google Docs and some getting Microsoft Office. However, document fidelity is still an issue when round-tripping a document from one format to the other. Austin said that "typically 30 to 70 percent of users could get along with using Google Docs" even though Google Docs is "two generations behind where Microsoft is [with Office]."
Smith said that the Google Apps service (which includes the Google Docs productivity suite) is less of a threat to Microsoft now that the company has rolled out its Office Web Apps service.
In terms of the cloud, Google took a "clean sheet" approach to building out its datacenters, which is something that Microsoft has not done, according to Gartner. Microsoft, in contrast is a platform provider focused not just on external clouds but also on private clouds as part of its "Software plus Service" vision.
Microsoft "recently invested in being good in the enterprise space" and has proved to be very successful, Smith said. The company's current pursuit of the search and advertising space aims at increasing its growth prospects. Microsoft's $13 billion revenue reported in its fourth-quarter 2009 financial statement derives mostly from Windows and Office. Microsoft's online ventures so far have been a "100 percent loss," according to Gartner.
The Gartner analysts described a laundry list of areas where Microsoft and Google clash. Battleground areas include:
- Community and social networking
- Search and advertising
- Collaboration and portals
- Web platforms and APIs
- Office and productivity apps
- Consumerization of IT, and
- The mobile space
Smith noted that Google's forthcoming Chrome OS operating system, which supposedly will bypass traditional operating systems such as Microsoft Windows, will be the first OS that is not a platform. However, Google took a different approach with Android, which is a mobile OS platform. Google needed a platform approach in the mobile space because it still has to catch up with Apple, Smith said.
Users will have more choice with Google Android over Apple's mobile OS. With Android, users can run Flash, which Apple CEO Steve Jobs has banned from Apple platforms. Smith noted inroads for Google's Android strategy. He said he's counted three models of the Apple iPhone, whereas there are 100 models of phones using Android.
While Microsoft has tended to have some floundering in the consumer mobile space, Smith didn't see mobile as Microsoft's biggest threat. The main threats to Microsoft include OS pricing for netbooks, Google Chrome OS, Microsoft's "leadership focus" and its future sources of growth.
|Editor's note: This article has been updated since its original publication to correct inaccuracies specifically related to Google's revenues. [Last updated June 24, 2010 at 11:19 a.m.]--David Nagel |