Serena Software expects to save $750,000 per year by shedding
Microsoft Exchange Server in favor of Google's Gmail application for its 800 employees, officials of
the Web development software maker told eWEEK Nov. 12.

The move, slated to be completed by the end of 2008, is a coup for Google. The
search engine provider has been struggling to entice customers to switch from the
Microsoft Outlook e-mail client and Exchange Server on-premises application to
its SAAS (software as a service) Web mail, word processing, spreadsheet and
other applications.

If you haven't read CIO.com's account of Microsoft's frantic attempts to keep Procter and Gamble from using Google Apps, read it now. As I reported last year, I've personally seen very large companies kicking off large pilots of Google Apps to wean themselves off Microsoft, but I've yet to see such a dramatic response from Microsoft.

Microsoft is blase about Google Apps in public, just as it used to be about open source, but incidents like P&G are making the software giant realize that it has a serious problem on its hands.

CIO: Steve, I guess the $64,000 question from a lot of people’s point of view is, is there going to be an Office for the Web, something that really competes head on with Google Docs, Google Apps?

Ballmer: Well, those are not very popular products! I hope that we are not competing head on with those! I hope we actually compete head on with Microsoft Office. If you take a look at it, Google Docs and Spreadsheets have relatively low usage and have not grown over the last six months or so.

There’s a reason. I think what people want is something as rich as Microsoft Office, something that you can ‘click and run’, if you are not at your own desk. Something that is compatible, document-wise with Microsoft Office and something that offers the kind of joint editing capabilities that is nice in Google Docs and Spreadsheets. Will Microsoft Office offer that? Yes! Standby for details in the next month.

Much is made of the fact that Google's empire relies solely on its advertising search prowess, for example, but the truth is that Internet search is responsible for just 3 percent of the time people spend online. So while Microsoft will continue working on search, it also feels that the other 97 percent is important as well.

Breaking down the average Web user's time online, Microsoft sees that 32 percent of that time is spent viewing content, 33 percent is spent engaged in online commerce, and 33 percent in communications tasks (like email, IM, or social networking). They can break down these broad categories further as well. For example, email takes up 9 percent, IM 13 percent, and social networking 10 percent.

The Power of Choice Is Yours.

Microsoft, then, has not been sitting still, waiting to be run over by Google. It has been quietly spreading SharePoint throughout enterprises. SharePoint opens up enterprise data to Microsoft services, running in Microsoft's browser. Unlike Google, however, Microsoft already has an impressive beachhead in the enterprise. It's called Office, and most enterprises are addicted to it.

In sum, if Google is aiming for Windows, it's going to lose, because the table stakes are much higher. For Microsoft, the game is SharePoint. For the rest of the industry, including Google, the response needs to be content standardization. Watch this space.

Though reports of the project have been circulating in the blogosphere for months, Microsoft has not publicly described the service. Microsoft did not respond to repeated requests for comments for this story.