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Office Hijinks: Microsoft Faces Down Challenge From Google Apps

Following the successful roll out of Office 2010, Microsoft remains the reigning king of software and computing applications. Still, Google and other rivals seem undeterred, and continue to build on their own successes amid the current app renaissance.

"Microsoft Corp. has vanquished most competitors to its Office suite of software," reports The Wall Street Journal. "But a new version of the popular program will be challenged by free or low-cost Web-based alternatives from Google Inc., which some businesses are adopting."

Most companies that spoke to The Journal said they never seriously considered using Google, "but they did use Google as a threat to negotiate a better deal from Microsoft, which is the first sign of trouble," notes The Business Insider.

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What's more, Google Apps now have 50 million users. "True, only 1 million of these are paying users," remarks The Business Insider. "Many of the paying users, moreover, probably pay less than Google's asking price of $50 a year ... But the size of the revenue contribution to Google should come as no solace to Microsoft."

"The big unknown in the story," as ZDNet's Between The Lines picks up on, is "How this Google scrum is impacting Microsoft's pricing power on Office."

Bottom line, "Google Apps is gunning for Microsoft's stronghold of the office computing industry," writes Gadgetell. "Google Apps represents a potential threat to Microsoft's core business of selling office-oriented software ... Apps's incredibly cheap price also serves as a way to entice companies seeking cost-cutting measures ... There are less people who will purchase Office licenses and Exchange-related services if they can get similar services from Google that are much cheaper and 'good enough' to meet their base needs."

Read the whole story at The Wall Street Journal et al. »

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