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With Rewrite, Google Docs Takes Microsoft Office Head On

Google's strategy marks a huge bet on real-time collaboration and online-only software.

Intensifying its pursuit of business customers and its competition with Microsoft Office, Google has rewritten its online word processing and spreadsheet applications. The new versions show Google making a few major bets: That what people want most is real-time collaboration on documents, that they'll do it entirely in the cloud, and that, when it comes to features, less is more.

For the past year and a half, Google engineers have been rewriting the browser-based software, taking products the company acquired and turning them into a single online software suite.

Outwardly, the revised apps appear only slightly different. There's a new ruler for adjusting margins. Consistent integrated chat and presence means you can see where another person is working in a file. Documents imported from Microsoft Word retain their layout better, keeping things like tab stops. That's important because companies nearly always keep Excel and Word, and employees move between the rival apps.

The biggest leap forward, however, is that changes from collaborative editing--two or more people working in a document or spreadsheet at the same time--now happen almost instantaneously, rather than the roughly 15-second delay they used to have. Google is betting that real-time, online collaboration is the feature people want. In today's business world, how quickly you can write a pitch or whip up a financial model is often less important than how quickly you can share, iterate, and get agreement (see "Down To Business: Google Changes Rules Of Productivity Race")

Google's other big bet is on the all-cloud environment; it's dropping for now the ability to use Docs when not connected to the Internet. Google thinks most employees don't care about offline mode, but the company knows that C-level execs--the ones who need to approve Google apps--do. They're often on airplanes without Internet connectivity, so not having offline access could be a big strike against the rewritten Docs.

Microsoft Office Stays

Nearly every big company using Google Apps keeps Microsoft Office. They go Google for its e-mail at $50 per user a year, and Docs comes with it, so they let people use it as needed. (Apps is Google's full suite, including e-mail. Docs is its name for the word processing, spreadsheet, and presentation suite, as well as its word processing app. It's confusing. We'll use Docs to refer to the entire suite.)

At biotech pioneer Genentech, 8,200 people--more than half of all employees--use Google word processing or spreadsheets in a typical week, double the usage from a year ago. "To be honest with you, I didn't know whether people would use this, and there was no mandate or driver to do it," says Genentech CIO Todd Pierce.

Video: David Berlind explores new Docs features
More analysis: Of Microsoft's cloud offerings, and other cloud productivity vendors
Research: A report including this analysis and more, along with the complete data set of 14 charts based on our survey of 571 business technology pros
The city of Los Angeles does have a mandate: It's moving 30,000 employees to Google Gmail and letting them keep Office, but it won't upgrade them for 18 months. People are expected to try Docs and will have to justify getting upgraded on Office. The city's ROI studies predict that about 80% of staff will be able to use Google Docs and just 20% will keep Office.

Make no mistake: Office is entrenched, easy to use, and generally well liked, so Google faces a tough battle. "As scary as people thought my idea of giving them a new e-mail system was, taking Office away was earth shattering," says Kevin Crawford, L.A.'s assistant general manager, which is why he's easing Docs in over 18 months.

Asked if Office generally meets all their needs, 78% of the 571 business technology professionals who responded to a recent InformationWeek Analytics survey say they agree or totally agree, and only 6% disagree or totally disagree. Some 87% of respondents say they expect their companies to still be predominantly Office shops in two years. Just 9% expect to rely mainly on non-Office Web tools.

Power Excel users won't find everything they need in Google's spreadsheet. It lacks pivot tables, for example, and if you want more than 100 rows, you need to add them manually. Google's word processing doesn't have the mail merge of Word. But everyday users will find most features they need in each suite.

When Office users switch to Google Docs, it's usually for easy document sharing. Microsoft's Office 2010 will be available to businesses in May, and IT teams should watch closely for how it matches the collaboration features people like in Docs.

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