Google is making an aggressive move to grow its Google Apps for Work business with a new plan that will make it easier and cheaper than ever for big companies to switch away from Microsoft Office.
If you’re under a Microsoft enterprise agreement, or EA, Google will give you Google Apps for Work – free.
“We’re going to meet the needs of customers with EA,” Google Apps head of global sales Rich Rao says.
The EA is one of Microsoft’s most potent weapons for ensuring customer loyalty with its biggest customers. Basically, if you agree to a three-year contract, Microsoft gives you deep discounts on Office and other enterprise apps.
Microsoft loves it because it locks you in to Office, no matter what. But since you sign up in advance, it means customers can sometimes end up paying for services they don’t actually need, for the entire three-year span of the deal.
It also means most companies don’t even look at alternatives like Google Apps, since they have to pay for Microsoft Office during the term of their EA no matter what.
That is why Google is now rendering it a moot point.
The only catch with this offer is that the qualifying companies have to promise that once the EA is up, they will use Google Apps for Work for a year at its standard price of $5 per user per month for just the productivity tools, or $10 per user per month for unlimited storage.
Moreover, Google knows that a lot of companies rely on trusted resellers for help buying and deploying their business software, from small local IT contractor shops all the way up to global mega-firms like Accenture or Price Waterhouse Cooper.
And so Google is paying a bounty of $25 per user to these resellers, out of pocket, to help cover the costs of training new Google Apps users. The idea is that the savings gets passed on to customers, removing one more thing in the way of going with Google Apps.
“It’s cash from us, on behalf of customers, for resellers,” Rao says.
Google claims some momentum in the enterprise space, with 60% of the Fortune 500 using Google Apps in at least some capacity. And in a global sense, Google’s Rao says more than 600 companies outside the United States are using Google Apps, with more than 10,000 paying users.
Now, Rao says, a lot of Google Apps’ features, including real-time collaboration and voice typing, are standard in the industry. Strategic moves like this one are designed to push Google deeper into the enterprise, now that the product is so well understood.
But it’s facing stiff competition from Microsoft Office 365, which is using its established enterprise presence to push a cloud-based, subscription-based service of its own. And enterprises, with their deep pockets and hundreds or thousands of users, are the most prized customers of all.
So the question becomes whether Google can pry away those customers with the enticement of free software.