Gen Y takes to Google AppsAugust 27, 2008: 6:20 PM ET
By Yi-Wyn Yen
While Google struggles to sell Google Apps, its web-based version of Microsoft Office and Outlook e-mail, to large corporations, it has found success with young entrepreneurs. Each day 6,000 businesses are signing up for Google Apps, and more than 10 million office workers are using the company's office suite, according to Matthew Glotzbach, the product management director for Google Enterprise.
The adoption is driven by Generation Y entrepreneurs like Aida Mollenkamp and Noah Starr, two twentysomething cohosts who feature Gmail on the Food Network's new interactive show "Ask Aida." Then there's young business owners like Robert Khoo, a 28-year-old from Seattle. Khoo is the president of operations for Penny Arcade Expo, a three-day confab in Seattle for 55,000 video game enthusiasts that is sponsored by big corporations like Microsoft (MSFT), Electronic Arts, and Activision Blizzard.
Khoo says Google Apps has helped the company scale the conference, which has doubled in size every year since 2004. Khoo and his coworkers used to use a large whiteboard to plan the gaming conference as they found it a better alternative than e-mailing a single Microsoft Excel back and forth.
But he says, "You couldn't work on it when you were traveling. There was no real-time data." Khoo switched to Google spreadsheets last June. "We needed something where everyone can collaborate at the same time and track changes. This has completely changed the way we do business."
Though Google doesn't track the demographics of Google Apps users, company executives say a Web 2.0 savvy generation is a major growth market. They insist that young trendsetters who grow up on Internet-based consumer products like Twitter, Facebook, and iChat, expect similar tools in the workplace. Gmail can turn an e-mail into a chat session when the other person is online and Google Docs allows multiple users to collaborate on files at the same time.
Google (GOOG) has barely made a dent in the office software market since launching Google Apps 18 months ago. The company earned $4 million from Google Apps compared to Microsoft Office's $12.2 billion in 2007, according to research firm Gartner. But Google is banking that the Gen Y workforce who want more web-based solutions will help the company close the gap. "We're not waiting 15 to 20 years. The generation of new users is already here," says Glotzbach.
Not everyone has faith that Gen Y office workers and business owners will dramatically shake Microsoft from its strong grip on the desktop software market.
"Google will get some bump from a younger generation coming into the workforce, but I don't think that will switch things as broadly as Google thinks," says Burton Group analyst Guy Creese. "Google is saying, cloud computing is the way of the future and software is dead. But it's not like companies have been making stupid decisions for the past 20 years. That's too binary of a view."