Google takes on Microsoft | SC Media
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Google takes on Microsoft

September 17, 2007
Google rationalized its $625 million acquisition of on-demand messaging security and archiving provider Postini as a signal it is committed to bringing secure hosted applications to businesses of all sizes.

But, considering the search giant's blood-stained history with Microsoft, the July purchase is just another move to one-up the Redmond, Wash.-based software powerhouse, experts say.
“This acquisition was about obtaining an [enterprise] email platform that competes with Microsoft,” says Peter Firstbrook, Gartner research director. “Google is not really an enterprise company. They don't have a channel.”

Postini's approximately 30,000 business customers, already familiar with using on-demand services, will provide a formidable starting point for Google's attempt at stealing market share from Microsoft Exchange, Firstbrook says.

But, as analysts note, Exchange comes with built-in security and a much richer client experience, and businesses simply may be unwilling to give up the investment they've made in Exchange.

The rivalry between Google and Microsoft is well documented. Among the recent battles, Google outbid Microsoft to purchase ad firm DoubleClick for $3.1 billion (now Google is facing anti-trust inquiries), while Microsoft has hinted it may buy Yahoo.

So it is fair to say that Microsoft will not exactly be handing over control of the enterprise application market to its Mountain View, Calif.-based competitor. The software company is expected to release an Exchange hosted service by the end of the year. Meanwhile, consumer-minded Google could prove its own worst enemy, experts say.

“Google trying to undermine Exchange, I think that's a long term process,” says Eric Goodwin, CEO of Fortiva, an on-demand email archiving provider.

Google may instead opt for making continued headway in the growing small to medium business space, experts say. But, considering its track record, Google can never be counted out.

“Google has the resources to be good at anything it wants to be,” says Andrew Lochart, VP of marketing at St. Bernard Software and a Postini veteran.
— DK
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