The launch of Google Apps Premier Edition last week has been welcomed by IT chiefs as potentially offering a means of delivering office productivity software at low cost.
But some CIOs and analysts have also said that it will need to offer more than the attractive £26 per-user per-year charge to win over enterprise users and present a viable alternative to Microsoft.
Google's offering is a web-based office suite comprising e-mail, word processor, spreadsheet, instant messaging, calendar and IP telephony, plus 10Gbytes of online storage per user. It is free from advertising and includes round-the-clock technical support.
It also provides programming interfaces, plus links to third-party single-sign-on and directory services software.
Robert Whiteside, Google Enterprise UK sales manager, said, "Premier Edition is aimed at the largest to the smallest groups, from the public sector to charities."
A key benefit, says Whiteside, is that Google Apps Premier Edition does not require businesses to support the software themselves.
However, Owen Williams, group head of IT at property firm Knight Frank, said that Google's model to store users' data centrally meant that "data security would need to be clearly understood".
Analyst group Forrester also expressed doubts about the level of collaboration Google could offer. Principal analyst Erica Driver said that, when compared with Microsoft Office, Google offered limited team collaboration and lacked an equivalent to Microsoft's Groove peer-to-peer software and its Onenote annotation tool.
Another factor, according to Ovum principal analyst David Bradshaw, is that the service requires a live internet connection to work.
"Google Apps lacks a detached client. It does not appear to allow users to work when there is no connection," he said.
Bradshaw said that this could create additional costs for firms looking to deploy Google Apps Premier Edition.
Carl Ricketts, former global CTO of Standard Chartered Bank, said some IT directors looking at Google might want to consider alternate routing of wide area network internet links. However, Google's offering guarantees a 99.9% service availability.
Bob Tarzey, service director at analyst firm Quocirca, forecast that within five years firms would favour on-demand tools.
Microsoft is also working on hosted software through its Office and Windows Live products.
Related article: Google challenges Microsoft with business software
Comment on this article: email@example.com