Giant Google Gets Rivalry From Tiny Firm

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NEW YORK ( TheStreet) -- Here's a hot question for a hot summer day: Who's the better small-business office play? Web giant Google ( GOOG) or tiny Rockville, Maryland-based HyperOffice?

Google is certainly "Googlian" scalewise. The company brags that 25 million people use its email, word processing and spread sheets on its free Google Apps product, with about 2 million forking over $50 a year for the hosted Google Apps Premier service.

HyperOffice, on the other hand, a 30-person firm started in 1998, claims just 300,000 customers for a similar offering of email, calendaring and the like -- albeit presented in a more controlled, high-touch, service-oriented offering.

Sounds like Google's got HyperOffice smoked, right? Well, maybe not. HyperOffice commands about $100 a person per year, or basically double what Google charges. And Google's 2 million paying customers amount to a measly 1% take rate when you consider that Gmail -- the heart of Google Apps -- is probably used by at least 150 million users. And HyperOffice is doing nothing but growing.

"We see our market up 15% per year, minimum," says Shahab Kaviani, executive vice president for marketing at HyperOffice. "Small businesses want to know that someone out there is backing them up on their office tools."

So what does it take for a 30-person small business to compete with the biggest, baddest technology company on the planet? I took HyperOffice for a test demo for the past few weeks to find out.

What you get: No big surprise here: HyperOffice is a fully supported collaboration work environment aimed at small businesses.

HyperOffice is simple: It is basically a Web-based version of Microsoft's mail, calendaring and task-management heavyweight Outlook, with functions like tasks, news readers, documents, links, Wiki and group collaboration baked in. It's all here: the familiar Outlookish splash page with news, meetings, new mail and other information. It has a nicely done column down the left of the page for other features like documents and collab tools.

I liked the super-clear delineation between personal and shared information, which is a major sticking point for most small businesses. And contacts, the pain in the digital butts of both Outlook and Google Apps, are smooth as silk in HyperOffice. For anybody who has struggled with Microsoft SharePoint or similar enterprise collab tools, HyperOffice is a major step forward.

The product is certainly up to small-business prime time.

What you don't get: HyperOffice's ease of use comes at a price. The software is nowhere near as sophisticated as other Web-based small-office tools.

Google Apps, for example, flat out crushes this product in terms of collaborative features and layout. In fact, HyperOffice is basically limited to mere downloading and updating files using Microsoft ( MSFT) Word, which really is not collaborative word processing at all. And HyperOffice is nowhere near as tricked-out as task management heavies like Liquid Planner, contact tools like BatchBook or Wiki work tools like Basecamp.

If you need high-powered, Web-based solutions for your business, HyperOffice is simply not for you.

Bottom line: HyperOffice knows its market: technophobe small businesses that don't want to worry about their work flow but still want to swim in the Web-based business waters. If your firm is struggling with getting hip with working online, be sure to give the product a test drive. It's fast, easy and customer service and support is excellent.

But don't mistake HyperOffice for a true, first-rate Web tool. Compared to other full-powered Web office tools, it really is just AverageOffice.

-- Written by Jonathan Blum in New York.

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Jonathan Blum is an independent technology writer and analyst living in Westchester, N.Y. He has written for The Associated Press and Popular Science and appeared on FoxNews and The WB.