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Google Apps To Start Making Real Money

According to an article in the latest issue of BusinessWeek, Google will turn Google Apps For Your Domain into a subscription service for corporations sometime in the next few weeks. If true, it would turn the service (which offers services for company domains, currently Gmail, Google Talk, Google Calendar, and Blogger, and is expected to add more services) into an actual revenue generator for Google, a rarity for a company that many say needs to diversify its earnings.

Soon, it’s expected to add word-processing and spreadsheet services to the suite, which includes an online calendar, chat service, and Web page builder. In coming weeks, Google Apps will turn into a real business as Google begins charging corporations a subscription fee amounting to a few dollars per person per month. “We’re dying to use something like this,” says Brandeau. He’s “on the cusp” of signing a contract with Google.

I still don’t see companies dumping Microsoft Office for Google’s solution, even if it eventually has email, calendaring, a word processor, spreadsheets and presentations. Google’s solution, at “a few dollars per person per month”, (assuming that is anywhere from $3-7 a month) amounts to a cost of $36-84 a year per employee for a product with similar capabilities to Microsoft Office 2007 Standard, which costs $239 to upgrade (and considerably less to businesses who use volume licensing).

Considering that (a) Google’s office products require and internet connection (b) companies don’t like giving up their data, even to Google (c) companies take years to upgrade for one version of Office to the next, I can’t see a company using Google Apps when they can use Microsoft Office, which is going to be positioned as the more powerful and flexible option, for an equal or lower price. Why would you buy less features, when Google’s subscription rate isn’t actually cheaper than Microsoft’s retail price?

Google Apps, Money Making, Monitizing

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