Opinion: Read my lips: Google Apps for Your Domain does not compete with Microsoft Office.

Google launched today a hosted software package of productivity tools that places it closer into competition with Microsoft's Live products.

Google Apps for Your Domain is a software bundle aimed at small and midsize businesses. The free package combines Google's e-mail, calendar, IM and page creation software. The package creates a private label suite all hosted by Google. Aaron Ricadela at InformationWeek has a good in-depth story (although he doesn't even mention MS Live and focuses on Office instead).

But read my lips: Google Apps for Your Domain (GAYD?) does not compete with Microsoft Office. Microsoft's Office market may be $12 billion, but the lion's share of those billions comes from a relatively small number of large companies. Writely can't compete with Word, Spreadsheets can't compete with Excel. They cater to the soccer mom, not the corporate worker. Right now, you need both to do your job. It's not a zero sum game.

What Google gains from these apps is knowledge on how you use office software and what kind of information you're sending back and forth. This data goes into its advertising efforts so it can target you better. Everything in the service of advertising. Google is also firing a shot across the bow of Microsoft Live, which targets the same functionality.

Microsoft would be daft to ignore that. The money quote comes from Tom Rizzo, a director of SharePoint Server at Microsoft. He tells InformationWeek, "The Google solution is what I'd call patchwork, or Frankenstein, software. You have to put it all together yourself."

Please. That shows how out-of-touch Microsoft really is. The time when users expect, want or need a single suite of products that's gussied up to meet marketing needs (instead of user needs) is passing. Like Google's CEO Eric Schmidt said during SES San Jose this year, unifying the apps with a similar interface and marketing plan is easy. Getting the users in the first place, that's hard.

With Google Apps for Your Domain, Google is obviously following Schmidt's game plan: Build the apps, get users to embrace them, string them together like a makeshift raft, and worry about marketing later. This staggered release cycle keeps Microsoft off-balance. Google is practicing guerilla tactics. Microsoft is still announcing plans and suites ahead of time, stubbornly marching its phalanx of troops onto the battlefield like British red coats.

Below, a roundup of reasons why businesses will and won't use Google Apps for Your Domain.

Five Reasons You Will

1. Because it's not a zero sum game. You can (and should) use Google's apps in conjunction with Microsoft's software. Especially since Sally McSlowPants in accounts payable is still struggling with e-mail.
   
   
2. Because you've got a small company with wired employees, and you either don't want to pay or can't pay start-up costs for servers and software.
   
   
3. Because Google plans to offer APIs for integrating with directory servers and service-level agreements, potentially making the suite more attractive to larger customers.
   
   
4. Because you're looking forward to the day when Google also offers free online data storage (GDrive).
   
   
5. Because you really, really really want Google Talk to be successful. Really.
   
   

And Five Reasons You Won't

1. The privacy agreement. You don't want ads sold around your e-mails, and you don't want the prospect of ads being sold around your business data. You're not comfortable with Google's prying eyes.
   
   
2. To borrow a phrase from Pip Coburn's book, "The Change Function," there's no user crisis that will entice your company to change. Your users don't need offline access to their files (yet). The pain of using Microsoft Office isn't greater than the pain of switching to a new model.
   
   
3. Your IT group is gonna go nuts when they see they have to try to manage that distributed data. And besides, you'd rather have your apps and docs living on your own servers.
   
   
4. The Google apps aren't completely integrated with each other.
   
   
5. Sarbanes-Oxley or other industry regs prevent you from even considering using hosted apps.
   

What did I miss? Let me know in the comments. (Or digg this story here, if that's your bag.)

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