The Tipping Point

I read on TechCrunch today that Google just beat out Microsoft to provide email service to 1.5 million students in Australia.  Highlights are:

  • BETTER:  With Gmail, students will have 6GB of storage.  With Exchange/Outlook, they had 35MB.
  • FASTER: It took Microsoft 4 years to roll our Exchange/Outlook to all students.  Gmail will be rolled out by the end of this year.
  • CHEAPER:  The Google contract is AU$9.5 million over 3 years.  The Microsoft contract it replaces was $33 million over 3 years.

For years, people have been talking about web-based applications replacing their desktop counterparts.  But it’s been slow to happen.  Historically, desktop applications have had a few key advantages:  they were faster (because processing happens on the local machine), they had better UI’s (due to limitations of HTML), and they could be used both online and offline.  Desktop apps also have their disadvantages; namely, that they are hard to deploy/update/manage and they have to be written for each operating system they support.

But I think we’ve reached a tipping point where web apps are better in every way.  Email is a great example.  My company uses Exchange/Outlook for email and it works OK.  But for email “power users”, Outlook is really slow — to the point that it impacts my productivity.  Outlook and Exchange just can’t handle email accounts with thousands (or tens of thousands) of messages.  And Outlook doesn’t have a decent search feature (so I use Google Desktop).

Gmail provides all of the same basic functionality as Exchange/Outlook, but it effortlessly handles large volumes of mail.  And I think the Gmail UI is actually better than Outlook’s UI.  And of course there’s no software to install — it’s all centrally managed by Google.

If you run a small business, you’d be crazy not to use the whole suite of Google Apps — email, calendar, work processing, etc.  Over time, big companies will come to the same conclusion.  Microsoft has enjoyed a monopoly in the apps business for a long time, but they’re coming under full-scale attack.  It may take a few years to see the effect because Microsoft is so entrenched in corporate America and owns the de-facto standards for electronic documents.  And of course they’ll roll out their own (lame) web-based versions of their Office apps to stem the bleeding.  But over time better, faster, cheaper always wins.


4 thoughts on “The Tipping Point

  1. I’m sure this is the way that things are going to go but there is one issue with web-based software services: they can be accessed from anywhere. Intuitively that seems to be an advantage but there are certain disadvantages when it comes to control. It’s harder to log what staff are using the service for, and indeed harder to monitor what staff are doing if they can genuinely access services from any computer not just when they are in the office. Large organisations have the resource to address issues like this – smaller ones don’t.

  2. I’m not sure I understand the downside of being able to access apps from anywhere, but if that is an issue for a lot of companies it would be pretty easy for Google or others to limit the IP addresses from which an app can be accessed.

  3. Yes, what Zoho is doing is very similar to what Google is doing (although they provide a more comprehensive set of business apps). Not sure I’d want to compete against Google, but I’ve read that Zoho is doing well.

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