Can Google Apps move up market?

Despite its enterprise forays, Google will be hard-pressed to dislodge Microsoft Office

The long road to the enterprise

Google claims its efforts to crack large enterprises, including forging a partnership with Salesforce.com in April, are paying off. "We are working with three to four dozen large-size enterprises in various stages of deployment right now of Google Apps," Google's Sheth says. "Some of them, such as Genentech, have announced they'll be doing larger deployments."

In a single week in June, Gartner analyst Austin had three inquiries from companies -- "each with tens of thousands or more users," he says -- asking about using Google Apps in the next year or two. The timing is somewhat surprising since most large companies upgrade e-mail and collaboration applications on a minimum 10-year cycle. "That argues against any quick success for Google," Austin says.

The three companies were not seeking full deployments, either. "They wanted to know about segmented strategies for a certain class of employee, such as a highly mobile person who doesn't really need a laptop but has to access e-mail and corporate information," Austin says. "They asked, 'What about cloud computing? What about Google?'"

And herein lies the rub. Although Google Apps may carve out niches, it's unlikely that basic applications in the cloud will play a major role in the way giants of industry conduct business. Imagine sensitive business documents being shared in the cloud without comprehensive enterprise controls.

Not only is Google Apps not ready, says Tier 1's Shih, companies aren't either. "The general trend toward more applications, more collaboration being done online in the work environment, is pretty irreversible," he says. "But enterprises making the leap from the desktop to the cloud is still a bit of a stretch right now."

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