It may be time to pay attention to one of
underappreciated lines of business.
On Tuesday, the company announced Presently, an online presentation service that will compete most directly with
PowerPoint while rounding out Google's online application suite, Google Apps, which already offers an online word processor and spreadsheet.
The move comes just a week after
, one of the world's biggest consulting firms, threw its weight behind Google Apps and announced that it would start recommending the service to its business clients.
While a cornerstone of Google's strategy, its applications business tends to be eclipsed by the other stated areas of its focus -- namely search and advertising. But over the long run, Google's push into applications has the potential to have a major impact on the company's already sizable bottom line.
And if recent events are any indication, Google's applications business may be ready to move to the next level.
Google's applications are usually considered the realm of individual users and small businesses. But the search giant's new partnership with CapGemini could help kick off adoption in the largest corporations as well. Big cost savings, increased collaboration between employees, and the ability to draw in employees who may not have their own dedicated machines are key pluses to Google's approach over traditional software, says Steve Jones, who heads up software-oriented architecture for CapGemini.
But big companies also have another reason to get on board. Given Google's popularity in the consumer market, many employees of large companies may already be relying on Google products to work with one another. And without official clearance from above, most of this usage takes place through back channels that can wreak havoc for companies down the road.
"A lot of the use of Google applications is through covert means that are not controlled," says Jones. "So when someone leaves, there can be issues." For example, a company can find it difficult to track data that leaves with an employee; this process is easier if the company's technology was involved from the beginning.
Another big advantage over traditional software is that companies don't have to worry about upgrading from one version to another since Google is making tweaks all the time, says Jones. That frees IT departments from having to go through the hassle and expense of making upgrades every five years and trying to squeeze the most out of each purchase in between.
The benefit of delivering software as a service is not lost on Google, either. By constantly being in touch with clients and having visibility into how they are using their applications, the company is able to very quickly identify tweaks it should make and new features it should roll out, says Rajen Sheth, product manager for Google Apps.
"One of the things I really like is being able to have a very direct conversation with our customers," Sheth says. "That is much more powerful than the old desktop model, when engineering and marketing teams were constantly guessing at what would work."
With nimbleness on its side, Google's online suite may well garner a greater share of the roughly $12 billion that Microsoft's Office line rakes in each year. And while the advantages of Google's version of software delivery are clear, its not so easy for Microsoft to copy Google and follow suit -- doing so would mean cannibalizing its own lucrative, if aging, business.
Google, meanwhile, sees big potential in its application business -- even beyond its immediate benefits. Documents and presentations that people create are full of vital information -- the very information for organizing that Google considers central to its mission.
By making it easier to share and publish these documents, Google is also increasing the amount of information available on the Web. If a wave of new information flows onto the Web thanks to the spread of its applications business, that will only make the company's search capability more useful.