Google Apps vs. Microsoft hosted application services battle heats up

Microsoft takes steps to attract more Business Productivity Online Suite customers as it faces increased competition from Google Apps in the hosted application services market.

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NEW ORLEANS -- Microsoft's hosted Business Productivity Online Suite hasn't exactly taken the world by storm, but the company is taking steps to boost sales and fend off competition from Google.

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Several sources here at the Worldwide Partner Conference (WPC) 2009 said Business Productivity Online Suite (BPOS) adoption has not met expectations since its November launch. Since then, Google has ratcheted up the pressure on Microsoft by taking its hosted Google Apps service out of beta and, more recently, announcing its Chrome Operating System.

But John Betz, director of Microsoft Online Services, said Google and others still have a long way to go to match the quality of Microsoft's offerings.

"You see the Web providers trying to play catch-up to provide an advanced experience," he said. "It's not really the richness that people are looking for."

Microsoft tweaks hosted application services

BPOS sales have been hindered by a laborious sign-up process. When the service first came online, it required potential customers to answer 71 questions -- and even then, it often took weeks to activate. Especially troubling for the channel: The process wasn't the best at tracking partner referrals.

"We heard pretty clearly that that was too many steps," Betz said. "We were trying to collect too much information, and partners were saying, 'I have no assurance that I'll be the partner of record.'"

The process is now down to 19 steps. Microsoft has also extended a 25% BPOS discount through the end of August. It had been scheduled to expire at the end of June.

If we're running Chrome and the Wi-Fi sucks, we're out
of luck.

Dave Sobel, CEO, Evolve Technologies,

The biggest applause during Monday's WPC keynotes came when Microsoft said it would give all BPOS partners up to 250 licenses to use the suite internally. The company will also credit partners that refer trial customers who end up subscribing to the full service.

BPOS consists of Exchange Online for calendars and email, SharePoint Online for collaboration and Office Live Meeting for Web conferencing.

Active Directory and Exchange Server let users synchronize their data between hosted and on-premise versions of the software. Microsoft has stressed synchronization as a major competitive advantage over companies like Google.

"I remain convinced that Microsoft has the best of both worlds," Betz said.

Google Apps vs. Microsoft: War of words

Google has taken some steps to make Gmail and other hosted applications available offline, but its focus is still in the clouds (cloud computing, that is). That strategy even applies to the Chrome OS, where Google has said most of the user experience will take place on the Web.

The problem is that Google's strategy assumes constant access to the Internet and that isn't always possible, said Microsoft partner Dave Sobel, CEO of Evolve Technologies in Fairfax, Va. He pointed out that many WPC attendees had trouble accessing the conference's wireless signal on Monday.

"If we're running Chrome and the Wi-Fi sucks, we're out of luck," Sobel said. "Google is visionary. They're doing some really neat things. But I don't necessarily think they've solved real-world problems with it yet."

Microsoft CEO Steve Ballmer also discussed competition with Google during his keynote this morning. In response to an audience question, he said Google hasn't been very specific about Chrome OS.

"Who knows what this thing is?" he said.

Ballmer also pointed out that Google already has an operating system, Android, and he drew a parallel to Microsoft's failed Windows 95 and Windows NT experiment.

"I don't know if they can't make up their mind or what the problem is over there," he said.

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