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Issue Date: April 2008

AnalystWatch: Google disconnected and Microsoft connected

April 2008
David Mitchell, Ovum analyst

Yesterday, Google announced that it was rolling out functionality to enable Google Docs to work offline - Google Docs Offline (GDO). This allows documents to be viewed and edited offline, and to be re-synchronised when a network connection is restored.

All of this is enabled by Google Gears, an open source browser extension. Offline access to presentations and spreadsheets is not yet provided but is likely to follow.
Google has been hard at work recently following its recent Google Sites release. The question that everyone is asking is "How will this impact Microsoft Office?"
At the same time, Microsoft has also been busy, bringing out online versions of some of its products, such as SQL Server Data Services or Microsoft Office Live Workspace, that bring some of its traditional on-premise applications into the cloud.
The impact of Google on the Microsoft Office heartland has been relatively limited to date. There are three broad reasons for this.
First, the usability of the online applications has been lower than its on-desktop competitors, partly genuine usability differences and partly driven by less attractive GUI eye-candy.
Second, the range of functionality provided by many of the applications is appropriate for many users and use-cases, but is not enough for intensive information workers. Here, for example, few professional authors would use Google Docs for long pieces of writing but would use it for shorter pieces where collaboration is a key part of the piece.
It is a different product for a different use-case. However, both of these factors are steadily declining as differentiators for on-desktop software, with each incremental release of the online applications bringing improvements, although much work still needs to be done.
The third problem has been more stubborn until now. Despite advances in communication and connectivity not everyone is continuously connected to the Internet, and being locked out of both your application and data when the connection drops is not acceptable. Google's recent announcement of the Google Gears enabled Google Docs Offline begins to address this issue.
This starts to remove one of the biggest barriers to the adoption of online applications. Just as Microsoft steadily gained market share with successive improvements through successive generations of Microsoft Windows, so will Google progressively gain share.
How much is a key question. Although SaaS is rapidly gaining mindshare and market share it is very unlikely to replace on-desktop or the broader on-premise software category completely, just as client-server computing did not kill off mainframe computing and the PC did not kill off the departmental server. On-premise and online will co-exist and users will want to use both, without having to understand which is which.
Of course, Microsoft is not standing still. It has embarked on a major transition itself to make its software available through online services. Over the next two to three years (or sooner) large elements of its product set will be able to be consumed as software plus service.
The really important thing behind both the Google announcement and those from Microsoft is what they signal. They signal the beginning of the end of the architectural bigotry that has pervaded some corners of the SaaS market. SaaS providers need to respect the fact that customers want to control their own architecture and remain agnostic to the near religious debates about on-premise versus off-premise, caring more about the business outcomes that come from using the software and less about its deployment plumbing.
Both Google and Microsoft are giving customers this choice, starting from different ends of the spectrum.


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