Google and Microsoft office apps war rages on

The online office application showdown between Microsoft, IBM and Google continues to build. Why are people selecting Microsoft's online version of Office versus Google Apps? Jo and Carl discuss recent wins in the market on this week's episode of Cloud Cover TV.

And check out the Cloud Cover TV home page for the rest of the episodes.

Read the full transcript from this video below:

Google and Microsoft office apps war rages on

Jo Maitland: Hello, from Cloud Cover TV, in San Francisco. This is our
weekly show on all the juiciest news in the cloud computing market. I
am Jo Maitland, I am the editor of Search Cloud Computing.

Carl Brooks: I am Carl Brooks, Senior Technology writer for the site.

Jo Maitland: This is our second test run on the Cloud Cover Show,
so bear with us while we iron through some of the technical issues
and also some of our nervous ticks. Carl, this has been a pretty big
week for the “Office in the Cloud” wars. Tell us what is going on in
this market.

Carl Brooks: Sure. It is been fun. Last week Google landed the GSA,
Government Service Administration, contract for Gmail on Google
apps which is pretty big; 17,000 users or so, a big win for them. This
week Microsoft came back and announced it had landed the USDA,
United States Department of Agriculture, with something like 150,000
users for Microsoft Office Online, which is a pretty good size win for them.

Jo Maitland: Why is one winning versus another one? What is happening
here? Is it about who gets the best price? Why is this shaping up?

Carl Brooks: It is a good question. There is a couple things, one of them is
that Microsoft definitely has a little bit of an edge over Google into selling to
big organizations, they really know that market inside and out. They know
what they are worried about; they also may have a little flexibility where
Google does not. Google is a pure 100% online offering. You sign up for Gmail,
you use it through the web. Microsoft, on the other hand, it can sell you
Microsoft Office Online, it can sell you Microsoft Exchange, it is basically the
same thing. Some organization might feel like they get a little bit more of a
chance. It is all the same platform some of it is in-house and some of it is
out of the house, and interestingly, in this case, it looks like the USDA might
actually be not be moving all of its users out to the cloud, as they say, but if
you partially . . . a statement they made very carefully, it says that they are
transitioning from 21 different emails systems to Microsoft Online and an
internal EMS system that they have been involved in for several years that
might not include online service. It might include plain old in-house email.

Jo Maitland: Interesting. This is the more of a hybrid cloud approach.

Carl Brooks: It could be called that, yes.

Jo Maitland: Where does IBM fit in the picture? Are they winning any
deals anywhere, or what is happening with IBM?

Carl Brooks: IBM is shedding customers for Lotus, like a tree in autumn.
They have Lotus Live, which is their online communication collaboration
service, but they are not getting the same kind of wins that Microsoft or
even Google is. Partly because they are maybe in different spaces, or
partly because if you have been stuck with Lotus for a long time, you
might be jumping at the chance to move to something you might consider
a little fresher. They are, however, landing customers for new services. It
is funny, people are sick of one thing, they will move off of it and onto another,
but IBM is not the front runner at this point.

Jo Maitland: Right, it is interesting, because I think you told me before there is
actually some technical aspects of the Lotus Live Suite that are definitely
further ahead than what you could get from Office 365 or from Google.

Carl Brooks: Definitely. The Lotus Live stuff, the collaboration stuff is
really interesting. You can do things like open a document, in real time
you can collaborate with someone who wants to help you write that
document, and while you are doing that you can see their name. You
can right-click on them and get options to do things like start a video
chat with them or kick them out of your document session, if you will.
It is very interactive and very advanced, there some interesting technology,
it is just that IBM has to get people to use it. Microsoft says they will be
able to do things, but they are not really delivering exactly all that same sort
of stuff. It is on the way, but they are behind IBM in this.

Jo Maitland: Are there any other players here, besides these big three?

Carl Brooks: Yes, there is a few. There is Zoho, which is an Indian firm,
and they got some decent traction. They basically do Google apps in
their own way, it is interesting. They have very a la carte pricing, you
can literally buy any one single service from them that you want or you
can buy all of them, a very, very flexible model. I think they are up to
8 or 9 million users at this point, so a good sized player, definitely behind
the pack.

Jo Maitland: Interesting. Also the big news this week is Dream Force here
in San Francisco, which is the annual user show. There is
about 15,000 people in town for it. For the first time this year, the company
has also running a show called Cloud Stock which was on Monday this week.
There were about 5,000 developers here, so this was just for the developer
audience. I think for the first time, SalesForce is really putting its money
where its mouth is in supporting the developer market in the cloud computing
world. They actually acquired Heroku this week; it was a $212 million
acquisition to buy Heroku, so there was a lot of buzz at the show about that.
We covered it this week. I do not know what you think about what has been
said so far.

Carl Brooks: It is an interesting move by them especially giving that they
also partner with VMware to run, which actually is not
running anything yet, it is just a website that you cannot sign up for. I
heard there was a rumor going around that VMware was actually not
informed in a fairly timely fashion of the Heroku buy, so they might have
been caught a little by surprise by this.

Jo Maitland: Yeah, I heard the same thing over here, too. I think it raises a
big question mark over what happened with VMforce. Right now the
companies are positioning the two things as completely different markets,
so VMforce is enterprise, Java, apps, it is a different community of developers.
Whereas, Heroku is Ruby, its developers writing web apps, social media,
mobile apps, that kind of thing. Clearly though, SalesForce has a set number
of marketing dollars, they have R&D money. Do they put that into the platform
they just spent $212 million acquiring and the one that they owe, or do they put
money into the one that they share with VMware?

Carl Brooks: Good question.

Jo Maitland: That is going to be an interesting thing.

Carl Brooks: For sure. You cannot argue with the fact that Heroku actually
works right now and VMforce does not, that is also something in their favor.  
So tell me, did they have those weird little no-software guys running around
at a developer conference?

Jo Maitland: Yes. Again, there is a few things that are a little bit, where SalesForce
were a little tone deaf. Certainly, that software guy running around in the big, red,
soft toy outfit does not quite jive with the push with software developers. Also, you
come in at 8:00 in the morning, into the Mascone Center, here in San Francisco,
it is like there is this dance party vibe, they have DJs playing slightly old fashioned,
late 90's house music, or something. You can tell there is a big developer
audience and they are rubbing their heads a little bit spaced out by this weird
scene. There is definitely an aspect of that is a little tone deaf.
I think that they have an idea of who their customer base is and who their
audience is, but they, it is a little bit cliché. I think they need to be careful about
that and be slightly less preachy in their approach in the cloud development
marketplace than they have been so far. was a proprietary language
that used APEX; they really miss the beat there. I think it is going to be crucial for
them now, they have bought this development platform to really talk to the
developers and understand what the roadmap should be and in which direction
to go in.

Carl Brooks: It sets them up to fight against the really big competitors that they
are probably, actually scared of like Microsoft, with Azure and Amazon. These
are companies that are much, much bigger than SalesForce, and can afford to
put a lot more resources behind a platform, so they need to have something viable.

Jo Maitland: Did you see the launch this week?

Carl Brooks: I did. That was interesting, it was fun. Mark Benioff was on stage
trashing Oracle, and yet again, then all of a sudden he opens up,
which runs Oracle. It is Database's own infrastructure, right? I mean, it is
SalesForce’s own infrastructure, right?

Jo Maitland: Right, exactly. They say that they got 87,000 customers’ data in
SalesForce, and all of that lives on the infrastructure, which the
hardware underneath is in many cases, the hardware and some of the software
there is Oracle. That is a little sweet irony. The notion with is that
you can build an application in any language, running on any platform, and from
any device and the data can live in I am assuming that competes
with the Windows Azure database service.

Carl Brooks: Yes, it could. When you look at databasing in the cloud,
there is a lot of new excitement around. There is Microsoft Azure SQL, which
Microsoft wants you to integrate that into your enterprise application
and into your Windows infrastructure. If you are using Azure and you
are a Windows shop, you can actually do that fairly deeply at this point.
Whereas, with something like Amazon, you store data at S3 and you can
use their database services as an easy-peasy way to getting things
accomplished  on that data without having to run your own database
server within Amazon. For them, it makes sense, everything is up in the
cloud, right?

Jo Maitland: Yes.

Carl Brooks: Another thing to watch out for is IBM, which is
the original database-as-a-service company. They have been
doing databases-as-a-service and out in the Cloud, if you will,
for 30 years or more, probably. It is unclear as to whether they
are going to step into this and what they are going to end up
offering. They may end up sticking with what they do now and
ignoring that loan developer public database cloud option that has launched and Microsoft Azure is also pitching.

Jo Maitland: It seems to be the theme of this show, is
where is IBM?

Carl Brooks: Where is IBM? I do not know. Where do
you hide a $100 million company?

Jo Maitland: Right, exactly. Thank you, Carl. Talk to
you next week.

Carl Brooks: Absolutely. Great fun.

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