SMB users enthusiastic as they try out Google Apps

With small IT budgets and limited technical staffs, a sampling of small and medium-size businesses (SMB) have been kicking the tires of Google's free, Web-based Google Apps for Your Domain collaboration offerings and are finding that it meets many of their business communications needs.

Alejandro Pivaral, CIO of Miami-based 2night Entertainment , a local entertainment Web site, said his company's 100 employees have been signed up for Google's free services, which will allow him to dump an e-mail server and its associated expenses for upkeep.

"I don't use Outlook anymore," Pivaral said in an e-mail response. "I only use Gmail," which is Google's free hosted e-mail service. "Managing accounts is easier than ever," he said.

The key to trying the new hosted applications, he said, was that they are offered for free, but the value has turned out to be deeper. "Definitely [being free was] one of the main reasons" to use the services, he said. "It's ad-supported, but the ads don't distract; many times they are interesting. I love Google products. Their innovation is changing the way we work."

Launched under beta on Monday, Google Apps for Your Domain is a suite of free, hosted collaboration applications for SMBs and other groups. The company plans to expand to larger companies by year's end.

Google said a wider, "premium" set of the applications, which will carry fees, will be available by the fourth quarter for large enterprises. One of the big pluses of Google Apps, users said, is that companies can create free e-mail accounts using their own custom domain names, giving them added professionalism and credibility on the Web.

The suite includes Gmail and Google's Calendar, Talk and Page Creator applications, all of which have either been rolled out in recent months or are being integrating with each other this year. More applications will be added over time.

Another user, Michael Renzi, director of finance and administration at San Jose City College in California, said the school joined an early-user program last February and created the school's first e-mail accounts for its approximately 11,000 students.

"It's providing them with services that we haven't been able to provide before" because of budget restrictions, he said.

While providing e-mail access to students has been in the school's technology plans for several years, the money wasn't available to set up servers, administrators, software and other equipment, Renzi said. Gmail made it work for the school, which is a two-year college. "I know there are other products out there, but this is just the best fit for our organization," he said. "We wanted a primary means of communications with students," as well as training them to use e-mail so they could go on to use it successfully in four-year colleges and in business.

For teachers, the Google Apps package offers calendaring for assignments, Web page creation tools and other needed features without huge expenses, he said. The college has been testing Google Apps since the first trials last December. The school developed testing groups and provided additional training for faculty members so they could use the included applications.

"It's working out great," Renzi said. "There are of course things that we have that we have to change," including some work processes, but those adjustments are expected and are being made. "The faculty is getting really enthused about it."

Renzi said he's not sure how much money the free services are saving the college, but "there's no question that it's saved thousands of dollars."

Paul Sculthorpe, a senior Web developer at Rock Kitchen Harris, a 20-person advertising and design company in England, said in an e-mail that his company began using Google Apps several weeks ago when its internal mail server died. The company has been using the services for POP3 e-mail, although some users prefer the Web-based interface of Gmail.

In addition to its free use, the big gain so far, he said, is that it's "painless to set up and means we can get on with other things (i.e. earning money!). We were up and running in literally minutes."

The company has always done its own IT services internally to save money. The Google Apps package fits the company well, Sculthorpe said. "We're small, so we don't have an Exchange server or anything like that. We use Google Apps shared calendars -- very handy."

One feature he'd like to see improved, he said, is the spam folder control system. "We've had a few important e-mails go into the spam folder," he said. "You can only get to that via the Web interface. An option to disable it, or at least access it via POP would be good."

Also, he said, "there has been some concern over privacy and things" raised by staff members. "My general answer to that is that although our data is stored elsewhere, I trust Google to take better backups than we ever could."

Larger companies, though, might not look at Google Apps with the same enthusiasm.

Joe Poole, technical support manager at the Reading, Pa.-based department store chain Boscov's, said in an e-mail response that there's "not much chance" that his company would be interested in Google Apps in the future.

"If we need inexpensive office software, we use Open Office. The only time I would consider a Web-based application is if we went totally with thin clients. Even then, you can get a thin client from Neoware or Wyse with office software flashed onto the memory, so all you need is a file server to save the data."

Matthew Glotzbach, Google's enterprise division products manager, said the plan for Google Apps is to maintain a free, ad-supported version for SMBs and to unveil a fee-based, feature-laden premium version for large businesses by the end of the year, complete with support.

"We've had a tremendous response" from users asking to participate in the beta program, he said. Exact numbers are not being disclosed, but the pilot program preceding the beta included tens of thousands of active domains that were signed up, he said.

Much of the inspiration for Google Apps for business, Glotzbach said, has come from businesses that have watched the company unveil a steady stream of consumer-focused products over the past several years. "We received a lot of feedback from businesses and institutions saying that they liked the products and wished there were enterprise versions," he said. "It's really driven by market demand."

Analysts say the new Google offerings are intriguing for business users.

"At this point, the large enterprise looks at this and says 'I've kind of got this covered, folks,'" with an Exchange server, instant messaging and other IT software and hardware, said Whit Andrews, an analyst at Gartner. "But here's a question: Do employees agree? Do they have enough to do their jobs?"

Sometimes workers will want to share their calendaring application with an outside freelancer who won't have compatible software, Andrews said. "It would be handy to integrate everything with outside people. This is one of those cases where easy can trump power," he said.

"I think we'll see an uptake in this area," Andrews added. "Maybe it's not a realistic expectation for large enterprises to look to Google for e-mail, though."

What will make or break enterprise use of the upcoming premium Google Apps services, he said, are transparent, predictable service-level agreements for businesses.

"Their service has got to be kind of Apple-class -- you know what you're getting and you know it works," he said. "They need to have a good integration story about everything they've got, which is still building."

Maurene Grey, principal analyst at Grey Consulting, said Google's biggest challenge in making this strategy work is in convincing business users that Google is also a business-focused company, in addition to its established history as a consumer-focused vendor.

One way Google has been successfully making the transition, she said, is by introducing each new product offering loudly, which has helped it get attention in the industry. "That's really key for Google to be taken seriously as a contender in the enterprise space," Grey said.

Also important for Google has been its strategy of releasing new products as betas, which don't have to be perfect and which help the company gain user feedback. "If they can convince the market that they're moving toward an enterprise-ready position and it's free, then enterprises will play and test and give more feedback," Grey said. "I think that's real smart on Google's part."

Grey also said she views Google Apps as a rival to Microsoft's software as a service offering, Office Live, but not to its Office suite.

"It is a direct competitor to Microsoft at the Office Live perspective, but not from the Microsoft Office perspective," Grey said. "They are very different."

Office Live Basics is a package of Web-based services from Microsoft including domain names, e-mail and Web tools aimed at the SMB market, while more elaborate Microsoft Office Live Collaboration and Office Live Essentials versions are aimed at larger enterprises. None of the Office Live products include the applications of the widely used Office productivity suites.

"Is this a competitive move against Microsoft? From the software as a service perspective, it is, but understand that Microsoft has not been real successful with software as a service," Grey said. "Microsoft is known from an enterprise perspective. Google is a newbie from the enterprise perspective."

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