If you’re still skeptical about Google (GOOG) Apps and software as a service (SaaS), spend a day at Long Island’s Hofstra University. Roughly 13,000 Hofstra students have access to Google Apps Education Edition to collaborate online, according to Robert W. Juckiewicz, Hofstra’s VP of IT.
The university’s ongoing experience with Google and SaaS — and Hofstra’s future goals — provide some clear hints about how the corporate software market may evolve to increasingly include Google.
Nobody is predicting the death of Microsoft (MSFT) Office, but it’s clear that Google Apps and Microsoft’s desktop productivity suite are on a long-term collision course.
Consider the situation at Hofstra. Increasingly, Hofstra’s students are required to complete their coursework in teams, working together in an enriched learning environment on everything from case studies to economic modeling, notes Juckiewicz.
Over the past year, Google’s Gmail has become Hofstra’s mainstay email platform for students and alumni. On average, according to Juckiewicz, roughly 8,700 students out of 13,000 students regularly use the Google Apps system. While Google Docs is beginning to gain traction across Hofstra, students are also using Google Talk for live chat and instant messaging and Google Calendar to share class schedules.
Nobody is suggesting that universities running Microsoft Office will pull the plug on that desktop suite anytime soon. After all, Office provides a far more comprehensive feature set than Google Apps. Plus, students don’t have to be connected to a network to access and use Office. And finally, Microsoft has announced its own set of SaaS and online efforts.
Still, several major developments will put Microsoft Office and Google Apps on a collision course. For instance, Google in November 2007 indicated that future releases would allow users to edit Google Apps while offline, according to TechCrunch.
Assuming the offline capabilities arrive this year and work as advertised, Google Apps will become at least a partial replacement to Microsoft Office over the next two to four years, predicts a Texas college CIO, who requested anonymity.
But Google's SaaS efforts go far beyond productivity applications. The company recently introduced managed security services for email systems. Online storage could also become a commodity within the Google Apps framework.
The challenge for investors is to understand how SaaS services from Google and others will eventually meld with so-called managed services.
A lengthy list of small, privately held software companies -- with names Level Platforms, N-able and Kaseya -- are focusing on this SaaS/managed services opportunity. Level Platforms CEO Peter Sandiford has pointed out that managed services platforms increasingly will need to optimize SaaS environments.
Short term, keep an eye on Google's SaaS moves, and their potential impact on Microsoft. Longer term, it's logical to expect some of those smaller managed services firms to launch IPOs or seek acquisitions within the next two to three years.
Dell (DELL), for one, has already made multiple SaaS and managed services acquisitions. The feeding frenzy should continue, as more technology companies shift their develop efforts from traditional desktop and server applications to SaaS.
Disclosure: none
