The software as a service (SaaS) trend is moving to the desktop, with companies like Microsoft and Google debuting hosted office productivity suites, but an analyst warns that, for the enterprise, they may not yet be ready for primetime.
Online desktop productivity suites targeted at businesses usually include desktop applications like word processing and spreadsheets, as well as e-mail and sometimes SMB tools such as Web hosting. While Google and Microsoft are among the larger players in the space, smaller companies are also in the mix.
Microsoft’s entry, dubbed Office Live, has been launched in the U.S. but is currently unavailable in Canada. Ryan Storgaard, strategy manager for search and online services with Microsoft Canada, said Office Live is targeted squarely at SMBs, not the enterprise space.
“The needs of the enterprise are definitely an order of magnitude more complex due to security, privacy and compliance,” said Storgaard. “SMBs don’t want to have to manage an IT infrastructure.”
Microsoft’s vision for Office Live, said Storgaard, is a blend of software and services: online tools with the ability to synch with offline tools like Outlook. At the moment, he said, SaaS is in its first generation, and it’s all about the browser. While there are some rich things you can do in the browser, limiting factors like connectivity do present challenges.
“It’s doing the right thing, given the context and the connectivity that you happen to have,” said Storgaard.
Looking at competitive offerings, Storgaard said when you consider the long history of competition to Microsoft Office in the offline space, with products like Star Office and Open Office, there are often tradeoffs around features and functionality. It’s a similar case, he said, in the online space.
“I think the challenge they’re going to have is taking something that was very consumer-driven and magically calling that enterprise- or SMB-ready,” said Storgaard.
While Microsoft may be sticking to the SMB space, with Google Apps Premier Edition, the search giant is aiming for the enterprise market as well. Rajen Sheth, product manager for Google Apps, notes that both General Electric and Proctor & Gamble have signed on as pilot customers.
The theme behind Google Apps, said Sheth, is collaboration and productivity. The offering includes e-mail, a calendar, a messenger, a word processor, a spreadsheet application and a Web publisher, as well as 10GB of storage, for US$50 per user per year.
“It’s not necessarily a replacement for things like Office or other Office-type applications, but really more of a collaborative tool,” said Sheth. “I think that’s where we shine.”
For example, Google Apps provides a central place for a workgroup to find the latest version of a document and allows for concurrent editing, with the changes propagating in real time. Changes can also be tracked, and the document rolled back to an earlier version if desired.
While the buzz around hosted desktop apps has been increasing, the enterprise case may not quite be there yet, said Guy Creese, an analyst with Burton Group.
“I think there are use cases where it would be useful, but I certainly don’t see people throwing out Microsoft Office and going wholesale to any of these anytime soon,” said Creese.
Microsoft admits Office Live is purely targeted at SMBs, and while Google is going after the enterprise space, Creese said it is constrained by rudimentary applications. Another major impediment, said Creese, is the lack of tools to enable records management and regulatory scrutiny.
“You’re having your documents hosted by Google but if you get hauled into court there’s not a really easy way to get at them,” said Creese. “That becomes worrisome.”
That assertion was disputed by Google’s Sheth, who said Google Apps was designed with compliance in mind. An e-mail gateway can be employed for filtering, or a partner service can be used, and he said documents can be exported out; APIs are also available for integration with other applications.
For the time being, Creese recommends enterprises evaluate all the offerings in the office applications arena, noting with new versions of Microsoft Office and Sharepoint, IBM’s Lotus and Oracle’s WebCenter have been released over the past six months. And SaaS is worth including in that look, he said.
“They shouldn’t be dismissed out of hand, but at this point it’s a study and finding out what the tipping point would be for you,” said Creese.
He also recommends really kicking the tires and ferreting out any hidden costs.
If Google Apps is going to be an employee’s sole word processing suite, and the applications and all their documents are only available online, does that mean the company will need to pay for broadband access at the employee’s home? That, notes Creese, could quickly cause any expected savings to evaporate.
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