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Now a sizable business, Google Apps (GOOG) will no longer be provided for free to groups of 10...

Now a sizable business, Google Apps (GOOG) will no longer be provided for free to groups of 10 users or less. Google charges $50/users/year to paid business users, who get customer support and 25GB inboxes for their trouble. Sources tell the WSJ Google is now generating ~$1B/year from Apps, used by 5M businesses, and mapping software sales. This has made it a headache for Microsoft's (MSFT) Office cash cow, though many large enterprises remain loyal to it. Office 2013's subscription pricing seems to have Google in mind.
Comments (8)
  • Transcripts&10-K's
    , contributor
    Comments (692) | Send Message
     
    Anytime somebody talks about Google Apps impact on Office, just remember these few things: Bing has more market share than Google Apps in their respective U.S. markets (by industry estimates), has been around for a shorter period of time, and is essentially targeting Google's ENTIRE business (Office is big for Microsoft, but isn't all that they do); it's funny that even with that being know, I can't remember the last time I saw a post about Bing being a "headache" for Google...
    7 Dec 2012, 09:56 AM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (753) | Send Message
     
    1. Microsoft had MSN/Live search before it created Bing. In that sense, it wasn't entirely new.

     

    2. A big chunk of Bing's gains come from the Yahoo deal. Which, from Google's standpoint, simply meant one rival was replaced with another.

     

    3. Most importantly, Bing's international market share is a small fraction of its U.S. share. And its mobile share is also tiny.
    7 Dec 2012, 10:05 AM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (692) | Send Message
     
    I was referring to Bing stand-alone share, which is at 16%; as I noted, this is a U.S. number. Add in the Yahoo piece (as you suggest), and Bing-powered search moves to the high 20's. Care to venture a guess on Google's peneration? Microsoft quantified it as "hardly noticeable".

     

    Adjusted for the write-down of aQuantive, MBD (which encompasses more than just Office) was about 55% of MSFT's operating income in the most recent fiscal year; Google's business is just a bit more concentrated, wouldn't you say?

     

    I simply think these numbers should be in context, that's all; I've yet to see any mention of Bing being a "headache" for Google, despite the fact that it appears their respective impact on the incumbent's business is more meaningful (or at least pretty comparable to one another).

     

    If Google Apps took 16% of the market, I think we would be hearing a whole lot about it (a Garnter 2010 estimate pegged Gmail's share of enterprise email at under 1% - with the math suggesting that gains since then bring the total to 2-3% at most...)
    7 Dec 2012, 10:41 AM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (753) | Send Message
     
    I think you could arguably call Bing/Yahoo a headache for Google. They are forcing Google to innovate some. But I wouldn't call them a growing headache. StatCounter's data suggests global share gains have been very limited. And with mobile quickly cannibalizing PC search, they could soon reverse.

     

    http://bit.ly/TJDzgF

     

    Regarding Google Apps, its impact on Office doesn't just relate to market share, but also pricing. Microsoft has definitely been getting more aggressive with its Office subscription pricing, particularly for home and SMB users.
    7 Dec 2012, 10:58 AM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (692) | Send Message
     
    Once again, looking at US data (where Bing is focusing most intently on); in terms of Bing not growing, the data disagrees - comscore pegs the growth since 2009 at about 7 share points (from 9 to 16).

     

    The pricing comment could certainly use some numbers - the numbers suggest that the pricing continues to be driving solid financial results...
    7 Dec 2012, 11:18 AM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
    Comments (753) | Send Message
     
    Google gets over half its revenue from international markets. Thus, if we're debating how much of a "headache" Bing is to them, it's necessary to look at both its domestic and international impact.

     

    Microsoft is offering Office 2013 for $100/year to home users and $150/year to small businesses, with support for 5 PCs, 25GB of SkyDrive, and mobile devices. They're clearly getting more aggressive to head off the cloud threat.
    7 Dec 2012, 11:31 AM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (692) | Send Message
     
    This is true, just over half; obviously Bing's presence internationally is much smaller as bourne out in the market data. As I noted, the market sizes (in term of the company's business) are comparable at roughly half (harder to tease out Office piece as % of MBD, but we know US for Google is high-40's); again, talking about 2-3% market share compared to upper teens...

     

    When you say clearly getting more aggressive, how so? Do you mean cheaper? If I buy a computer and keep it for five years, that certainly doesn't appear to be true based on the pricing presented...

     

    Here's some pricing data from PC World that differs from what you seem to be implying:

     

    http://bit.ly/WO7WQw
    7 Dec 2012, 11:41 AM Reply Like
  • jammerculture
    , contributor
    Comments (391) | Send Message
     
    Google apps: no project, visio, active directory, exchange, access, sql, onenote.

     

    Not even in same league as Office suite.

     

    When did it become cool for computers to do less?
    7 Dec 2012, 07:22 PM Reply Like
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