Will Google Apps crush Web-software startups?
When Google announced Google Apps today, a package of Web-based communications and office-productivity software, most of the coverage portrayed it as a straight-up Microsoft vs. Google fight, with Microsoft's lucrative Office suite locked in Google's sights. But in this battle between giants, there may be collateral damage to a host of startups trying to tackle the same business-software market, says venture capitalist and former Business 2.0 Magazine columnist Paul Kedrosky. For all those startups thinking of taking on Microsoft Office -- Red Herring counts 17 of them -- Kedrosky asks a simple question: "Why? What makes you think that you can do it so much better than Google can that the inevitable free Google Apps product doesn't kick your ass out of the office market?"
Well, here's a simple answer: Google's magic touch in search and advertising hasn't translated to hits in any other product category. While it's released dozens of neat little features, none of them is a runaway hit. And Web 2.0 blogger Richard McManus, who's reviewed a number of competing Web-based office-software products from Zoho, ThinkFree, Zimbra, and others, likes the startups' chances. Will it be Microsoft, Google, or a startup that prevails in the fight to create a Web-based alternative to Microsoft Office? Where does Foldera fit in?
One of the bedrock issues that will have to be solidly addressed by Google or any other outfit that wants to provide web-based office applications is the issue of privacy.
Nobody in their right mind will use applications to create or store business or personal documents or data on web-based servers if there is a perceived risk of loss of privacy. No matter how "free" web applications may be, to put valuable business or personal information "out there" where governments, crooks, or greedy capitalists can exploit such information is simply never going to fly with anyone who has a brain. The issue of information protection and privacy is critical. Recent failures by mega-web service providers points to a serious flaw that cannot be ignored. I would rather pay a large license fee for software that produces data safely stored on my home system, than to use even the cheapest and most razzle-dazzle web apps, if using them puts my private information and business documents at risk. Come on! Promise me the moon, but deliver information security, and then let's talk. Even if a startup succeeds, it will get swallowed by either Google or Microsoft. It is not clear that another company will rise from being a startup to being another Google.
Come on..Google is not free--the price we pay is our PRIVACY. When will the community catch on? Startups that offer scalability and security will prevail.
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