If I had any doubts that Google Apps poses a serious threat to the software business, they have been dissipated after reading the following article from Network world.

In short, the author talks about a report from the Burton Group which describes why the set of applications (and associated hosting services) provided by Google just don't cut it for large-enterprise use although for SMB and even universities its use is, however, seen as appropriate.

Although this is debatable and I am sure many would take a stab at debunking the argument exposed, I don't find it particularly surprising and so should no one.

What this article does (although it does not recognize it) is merely to expose Google Apps for what it is: a disruptive technology.

Disruptive technologies start out as really shabby versions of existing software applications (such as Office) which are laden with functionality that 80% of the users do not use such as:

• "Google Docs does not support a table of contents, headers, footers, automatic creation of footnotes or end notes."

• "Google Spreadsheets does not support some of the more esoteric functions within formulas (eg, database functions), and cannot hide rows or columns."

So what? It is not supposed to do that anyway...

Furthermore, what characterizes disruptive technologies is the fact that they appeal to the less demanding users that have been overshot by the overwhelming amount of functionality that they have to pay for with Microsoft Office — i.e. the schools, the universities and the home users

These are users that really don't care about nifty functionalities that a minority uses and are not willing to pay for them.

The report ends by saying that although Microsoft and others will take a hit from this, in the end they will be just fine. This might be true in the short term — another characteristic of disruptive technologies is that the type of customers they attract are the low-margin customers for Microsoft. So, in the short term, Microsoft will actually see its margins improve due to the disappearance of this lousy customers from the customer mix, but as Google Apps improves and it will improve, then the business customers will start migrating to Google Apps AND THEN it will be too late for Microsoft — the floodgates will open...