Google Apps Has No Future

For a little more than two years Google (GOOG) has been in the productivity apps business, trying to chip away at Microsoft’s Office dominance with over 500 million users. First they went out and bought a bunch of start-ups including Writely, Tonic, XL2Web, and JotSpot. Then Google gave them a new paint job and duck taped them together calling them Google Docs & Spreadsheets.

For the past two years they have been trying every strategy in the book to try and get traction in the market. First it was consumer free then it was an enterprise paid model. With all the P/R hype, all the data points to Google Apps being an utter failure. According to Compete, Google only gets 4M unique vistors to their Google Docs & Spreadsheets Web sites. Still the irony is while jouranlists were busy predicting web based apps would make Microsoft Office obsolete, they were busy typing away using Microsoft Word. Google even got on the feature treadmill and started banging out must have features like “print” and “charting”. Still no one is showing up to their party.

Microsoft has not been sitting still. They launched Office Live Workspace in March 2008 and later in October announced Office Web apps at their professional developer conference. People have also not been shy about buying Microsoft Office 2007, it doubled sales over the 2003 version. Even still Microsoft Office 2007 is a hot product this holiday season topping #2 on Amazon’s best seller list. Who says paying for software is a dead business?

With all the hoopla about Google Apps so far its really not been a threat to Microsoft Office. The future also does not look bright. Microsoft has a history of being a fast follower and closing the gap quickly. Once people have both a rich client and a web based version of Office at an affordable price, Google really has no chance. It seems like Microsoft finally got their act together just in time to suck the wind out of Google’s sails.