Burton Group: Gotchas Lurk Behind Google Apps' Low Price Point

Market Wire, March, 2007

Cost savings, smaller data center footprints, and simple licensing are just a few benefits driving the popularity of the software-as-a-service (SaaS) model. Google's recent foray into the enterprise SaaS market with Google Apps Premier Edition is radically changing the content and communications market, and is disrupting traditional models offered by Microsoft, IBM and Oracle.

SaaS is a departure from traditional IT software solutions in several ways, including low pricing, and its ability to deliver a complete, usable, finished application, which is nearly always available on-demand. However, one key component most often overlooked when selecting SaaS is the provider's reputation.

"SaaS requires significant changes in the traditional role of IT," says analyst Lyn Robison , "for one thing, SaaS moves business data outside the walls of the enterprise. Entrusting this critical data with another organization should cause companies to evaluate more than the SaaS provider's services, but its business priorities and corporate culture."

According to Burton Group analyst Guy Creese , Google Apps, Premier Edition is compelling, but companies must look beyond the price hook and thoroughly investigate what they're signing up for.

"Google's corporate culture is to assume chaos and deal with it," says Creese. "This can be unsettling and may be a deal breaker if your company embraces document organization and order."

Creese advises enterprises to wait for Google Apps Premier Edition to move beyond its current rudimentary offering. Pointing out the solution does not address records management and electronic discovery for memos and spreadsheets stored at Google, for example.

Google's plan for organizational communication, collaboration, and content management will likely produce both direct and indirect disruption to business-as-usual in this domain. Burton Group believes this will result in some interesting new opportunities for enterprise IT as well as some new competitive dynamics with Microsoft, IBM and Oracle.

A four-part series of complimentary podcasts and Take 5 audio enhanced presentations delving into the pros and cons of SaaS and Google's Enterprise strategy are available for free at Burton Group Inflection Point http://inflectionpoint.burtongroup.com/ .

About Burton Group

Burton Group ( www.burtongroup.com ) helps technologists make smart enterprise architecture decisions in increasingly complex environments. Burton Group's research and advisory services focus on technical analysis of infrastructure technologies relating to security, identity management, web services, service-oriented architecture, collaboration, content management, and network and telecom.

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Contact: Amie Johnson Burton Group 801.304.8136 Email Contact