If there is one company whose entire business is based on software services delivered via the internet, it is Google. Through its online applications, supported by online advertising, Google is changing how people approach software.
Simply by releasing beta code to an internet browser, Google is mounting a serious challenge to Microsoft's dominance of desktop applications and operating systems, if some IT commentators are to believed.
In the first week in September, with the launch of the early code of Google's Chrome, US commentators have spotted that the new browsers will encourage people to use applications direct from the internet, or other IP networks, and bypass the desktop OS and applications - Microsoft's cash cow and the most common corporate interface and productivity tool.
"Chrome is nothing less than a full on desktop operating system that will compete head on with Windows," according to TechCrunch blogger Michael Arrington.
Potentially, users could boot straight into a browsers and never be aware of any underlying OS on the local machine.
Google says Chrome will include an improved Java-Script engine and Google Gears, which will let users store and access web applications off-line. If it lives up to its promise, web 2.0 applications, such as searchable maps and online applications, will enjoy greatly improved stability and performance. It will also be open source, so other browser makers can use its technology and applications builders can adapt to it.
But is corporate IT really ready to ditch the Microsoft technologies that office workers and IT support teams in their millions are so used to working with?
David Mitchell, senior vice-president of IT research at Ovum says, "Chrome is more of a threat to Windows than to Firefox or Internet Explorer. Google talks about launching apps and managing them, protecting them from crashing within the browser, stop apps from writing to the desktop and corrupting the disk. These are things that you would normally see an operating system do."
Google has subtly made its intentions clear. In its blog it promised Chrome would be more than the browser we know. "What we really needed was not just a browser, but also a modern platform for web pages and applications, and that is what we set out to build," the blog read.
But we have been hear before. Sun and Oracle famously tried, and failed, to usurp Microsoft's dominance on the desktop with the network computer. From 1996 to 2000, they appealed to businesses hit by the rising costs of supporting vast networks of PC, with helpdesk staff having to physically maintain complex remote device. The Network Computer collaboration envisaged a world where application processing was done at the server, where it was easier to maintain and control. Only a diskless, easy to maintain device, running lightweight operating systems, and a screen, would sit on a user's desk.
The idea never took off because PCs fell dramatically in price and manufacturers became better at creating "standard builds" that were easier to maintain. Microsoft also improved its remote support protocols so fewer visits to the user were necessary and companies such as Citrix, and eventually Microsoft itself, allowed PC users to access server-based applications. The advantage of the Network Computer fell away and the idea was canned in 2000.
Google's concept of internet-based applications is not entirely dissimilar to the Network Computer vision - although applications are more distributed in a server "cloud" rather than running on a specific in-house machine.
Is there any reason to believe that Google can succeed where the might of Sun and Oracle combined has already failed?
David Armstrong, product marketing manager for Google Enterprise, says he sees the parallels between the two situations, but this time huge number of people are already accustomed to online, browser-based applications such as e-mail and photo-sharing. That familiarity could lead to acceptance in the corporate market, he said.
According to Gartner, Google Apps already has a surprising degree of penetration in business - 33% of business staff use some form of Google Apps - but this is as a secondary application, supplementing, not replacing, Microsoft Office.
But some companies are already convinced by Google approach to productivity applications. Building firm Taylor Woodrow has moved 1,800 employees to Google Apps, including Google Mail, Google Docs and Google Calendar. The products are all hosted and managed by Google, removing the need to install any software or hardware on site.
Taylor Woodrow's director of IT, Rob Ramsay, says the architecture suited his mobile workforce at construction sites and client premises. "The mobility coupled with the speed of roll-out, the lack of requirement for a physical infrastructure and the pace of new product development is very beneficial," he says.
So are the savings. The business has seen costs fall by around £1m because of the hosted nature of the technology and the fact that telephone, e-mail and web support is included in the package, he says.
In this way, Google does have more chance of usurping Microsoft than earlier efforts, Mitchell says. But inertia among IT departments, in terms of their technology investment and skill sets, will prevent most IT leaders from making a rapid move, he says. "If you are looking for a CIO who will make a major change in platform away from Office or Windows, the demographic will be two years from retirement. You can lose many friends with that kind of decision, and your job could be threatened by it. The ones who do it will be the ones who do not care about that."
Although, in the future, applications may be presented in the browser, and hosted in "the cloud", they will create a demand for a lightweight operating systems. Microsoft may well be the most likely to provide them, Mitchell says. "I can see Microsoft offering a 'Windows Skinny' operating system, just to launch a browser where the applications run. Microsoft has a really good record of denying a trend and then saying it was a mistake, catching up and being really successful. It denied the internet and then made a huge success of it."
In the end, Mitchell believes there is a limit to the software as a service model because suppliers have yet to find a profitable business model to accelerate development, while users are still wary of relinquishing control of their architecture.
"One of the biggest responsibilities of the CIO is to design the corporate architecture and align it to the business. But with SaaS they do not get a choice in architecture. A UK company may want its datacentre in the UK, because of privacy issues, but they will not get that choice from the SaaS supplier at the moment."
He sees a hybrid model evolving, where established software firms start to offer their applications as a service, and SaaS suppliers offer their software to run on in-house systems. Users should be allowed some flexibility between the architectures, Mitchell says.
Microsoft sees the model evolving, but is not pushing users onto a SaaS model, says Tim Kimber, Office Live product manager. Office Live gives users the collaborative aspects of software as a service, but does not run the application remotely. "Not everyone wants software as a service over night. We will be there move to this sort of model as people want to do that," he says.
Regardless of whether, and how quickly, the SaaS model achieves dominance at the expense of Windows and Office, there will still be a positive outcome for IT directors, according to Gartner. By 2011, Microsoft pricing for Microsoft Office, e-mail and collaboration licensing and services will be constrained by competition from Google Apps, the research firm says.
Microsoft Live Vs Google Apps
Software as a service
Office Live is not truly software as a service. Documents are only stored and share online - in the cloud. Application code is still required to run on the desktop. This is good for working offline - and then synching documents for collaboration. However, it does not get away from the downside of running desktop applications: they are difficult to support, costly to license and place demands on local storage and power.
Google applications, including word processing, presentation software and spreadsheets, are all processed off the desktop, so they take the power and storage burden from that device. This approach also makes support easier - in fact Google hosts these applications and, therefore, supports them too. It also make them "versionless" which means Google upgrades, and patches applications as it goes along, without interrupting users or burdening IT departments. It also means IT departments could offer users very light desktops - with lower memory and processing power - and still get these applications. Bandwidth and network availability would need to be assured though.
The suit still has the functionality of desktop applications. For example in Word, not only do you have the full range of fonts, you can embed images and tables, use HTML and XLM code, and offer complex formatting. They also give as-you-write grammar and spell checking.
These are very much stripped down applications, including word processing, spread sheets, presentation, e-mail and calendaring. Basic word processing is offered, but any more complex formatting is off the menu. Since observers have commented that much of the functionality of Microsoft Word goes unused, IT departments may see them as fit for purpose for many users. More demanding Microsoft Office users will not get the functionality they need.
The legendary headache of IT helpdesks in supporting different file formats in the 1980s through to the mid 1990s was largely wiped out as Microsoft Office began to dominate personal productivity apps and began backward version support.
Google Apps support most major file formats including Microsoft, Adobe and Star Office.
Microsoft Office. These applications are so ubiquitous in the work place they have a high level of acceptance. However, some high functions of Word and Excel are complex and users require training.
Although there may be some resistance to working on programs which are not on the desktop, most people have already used some form of software as a service application in the form of internet e-mail. The most basic word processing interface is fairly standard and intuitive.