Microsoft and IBM Compete for Space in the Cloud as Google Apps Turns 3

Google may have been celebrating the third birthday of Google Apps Premier Edition on February 22, but Microsoft and IBM want a piece of the cake, errr cloud, too. reports that Google is trying to dislodge legacy on-premises installations from Microsoft and IBM while simultaneously fending off SaaS solutions from said companies. In addition, Google has to fend off offerings from Cisco Systems and startups like Zoho and MinTouch, to name a few. Despite the up-and-comers, Google, Microsoft and IBM are the main three companies competing for pre-eminence in the market for cloud collaborative software.

Three year ago, Google launched its Google Apps Premier Edition, marking a bold gamble on the future of collaborative software. Back then, and perhaps even still, the collaborative software market was controlled by Microsoft and IBM. Microsoft and IBM have over 650 million customers for their Microsoft ® Office, Sharepoint and IBM Lotus suite combined. These suits are licensed as “on-premises” software which customers install and maintain on their own servers.

When Google launched Google Apps Premier Edition (GAPE), it served as a departure from this on-premises model by offering collaboration software hosted on Google’s servers and delivered via the Web. We now know this method as cloud computing.

Until the introduction of GAPE, Google Apps was available in a free standard edition (which included Gmail, Google Docs word processing, spreadsheet and presentation software), but with GAPE Google meant to make a profit. For just $50 per user per year, companies could provide their knowledge workers with GAPE, which featured the aforementioned apps as well as additional storage, security and, most importantly, 24/7 support.

Google Apps now has over two million business customers–of all shapes and sizes–and is designed to appeal to both small companies desiring low-cost collaboration software but are lacking the resources to manage it and large enterprises desiring to eliminate the cost of managing collaboration applications on their own. At the time, Microsoft and IBM were not aggressively exploring this new cloud approach.

Fast-forward to 2009. Microsoft and IBM had released hosted collaboration solutions (Microsoft ® Business Productivity Office Suite and LotusLive respectively) to keep Google Apps from being lonely in the cloud.

On the third birthday of GAPE, Google has its work cut out for it. Google is trying to dislodge legacy on-premises installations from Microsoft and IBM while fending of SaaS solutions from Microsoft, IBM, Zoho, Mindtouch and the list goes on.

Dave Girouard, Google Enterprise President, states that while Google spent 2007 and 2008 debating the benefits of the cloud, the release of Microsoft and IBM products validated the market. quotes Girouard as saying, “We now have all major competitors in our industry in full agreement that the cloud is worth going to. We view this as a good thing. If you have all of the major vendors suggesting you look at the cloud, the consideration of our solutions is going to rise dramatically.”

For his part, Ron Markezich, corporate vice president of Microsoft Online Services, thinks that there is room for everyone in the cloud because customer needs vary by perspective. Said Markezich to, “Customers are all in different situations. Whether a customer wants to go 100 percent to the cloud or if they want to go to the cloud in a measured approach in a period of years, we want to make sure we can bet on Microsoft to serve their needs. No one else has credible services that are adopted by some of the larger companies in the world.”

Microsoft’s counter to Google Apps is Microsoft’s ® Business Productivity Online Suite (BPOS). It includes Microsoft ® Exchange Online with Microsoft ® Exchange Hosted Filtering, Microsoft ® SharePoint Online, Microsoft ® Office Communications Online and Microsoft ® Office Living Meeting. Microsoft also offers the Business Productivity Online Deskless Worker Suite (which includes Exchange Online Deskless Worker for email, calendars and global address lists, antivirus and anti-spam filters) and Microsoft ® Outlook Web Access Light (for access to company email) for companies with either tighter budgets or those in need of lower cost email and collaboration software. Sharepoint Online Deskless Worker provides easy access to SharePoint portals, team sites and search functionality.

The standard version of BPOS costs $1 user per month or $120 per user per year while BPOS Deskless Worker Suite is $4 per user per month or $36 per user per year. Users may also license single apps as stand-alone services from $2 to $5 per user per month, which serves as a departure from Google’s one-price-for-the-year GAPE package.

The same code base is used by Microsoft for its BPOS package, on-premises versions of Exchange and SharePoint, thus making legacy customers’ transition into the cloud easier should they decide to migrate to BPOS. Microsoft thinks that this increases the likelihood that customers will remain with Microsoft rather than switching to Google Apps or IBM Lotus.

At Lotusphere 2008, IBM offered a hint at its cloud computing goals with Bluehouse, a SaaS extranet targeted toward small- to mid-size business. The product evolved as LotusLive Engage, a general business collaboration solution with social networking capabilities from IBM’s LotusLive Connections suite, at Lotusphere 2009. In the later half of 2009, the company sought to fill the void left open by the absence of email, by introducing the company’s hosted email solution LotusLive iNotes. iNotes costs $3 per user per month and $36 per user per year. Additionally, IBM offers LotusLive Connections, a hosted social networking solution, as well as the aforementioned LotusLive Engage.

Vice president of online collaboration for IBM Sean Pouelly told that IBM is banking on companies using email to adopt their social networking services saying, “It’s unusual that they just buy one of the services.” Currently over 18 million paid seats use hosted versions of IBM’s Lotus software.

IBM’s efforts in the cloud began to really get attention when the company scored Panasonic as a customer late last year. In its first year of implementing LotusLive iNotes, the consumer electronics maker plans on migrating over 100,000 users from Lotus Notes, Exchange and Panasonic’s proprietary email solution to LotusLive.

When it comes down to it, customers have different reasons for choosing Google, Microsoft or IBM. All three companies have major plans for 2010, and each company has a competitive edge. For more information regarding Cloud Computing please visit

  1. April 14th, 2010
    Trackback from : Social Network Specialist

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