Microsoft attacks Google Apps with “Google Tax” claim

By Tom Warren, on 4th May 11 8:05 pm with 18 Comments

Microsoft is on the Google attack once again this week.

The software giant has created an iceberg info-graphic (see below) that reveals Google’s hidden costs. Tom Rizzo, senior director of Microsoft Online Services, who previously claimed Google is failing in the enterprise, penned a new blog post on Wednesday. Rizzo claims that Google Apps contains several hidden costs, especially when running Google Apps alongside Microsoft Office. Microsoft recently interviewed more than 90 small and medium-sized organisations using Google Apps across five countries, including the US, France and Japan. Microsoft found the following:

  • For 9 out of 10 companies surveyed, Google Apps are used in parallel to Office. These companies have not replaced Office due to user readiness, productivity requirements, security concerns and the inability to work offline. Interestingly, Gartner confirms that the vast majority of enterprises will continue to standardize on Microsoft Office, while they only evaluate free trials of Google Apps, and do not intend to spend money on deployments.
  • Of the small and medium sized businesses that participated in our survey, most were limited to using Gmail and calendar. Only two in five adopted Google Docs and two out of three companies still use Office as their primary productivity solution.

Rizzo explains that total cost of ownership increases when businesses use Google Apps. “The three general areas where organizations feel the Google Tax most strongly are deployment, IT support costs and user training,” says Rizzo. The blog posts finishes up with:

“Benjamin Franklin once said, “The only things certain in life are death and taxes”. While that may be true, it doesn’t mean that people and businesses should have to shoulder the Google’s hidden costs. Once people see through the sales pitch, they realize just how poor the return on investment for Google Apps actually is, and why 750 million people have chosen Office to power their business.”

Rizzo previously claimed in November that Google is “failing” in the enterprise. “Let Google say we’re way behind as we continue gobbling up enterprise customers. Let Google underestimate us. They’ll be shocked when they see all the momentum we have inside this space.” The ill feeling between the two companies continued this year when Google kicked off a search engine war of words. Search Engine Land posted a broad investigation into what Google claimed was Bing cheating search results. Amit Singhal, a Google Fellow who works on the company’s search engine ranking algorithm claimed that Bing was simply copying Google’s results. Google allegedly caught Microsoft’s copying by creating a “Bing Sting.” The search giant created one-time code that would manually rank a page for a certain term and create around 100 synthetic searches searches that hardly anyone would ever enter into Google. The searches returned little or no results on Google or Bing but Google created a special honeypot page to show at the top of each synthetic results page. The result? Bing started listing the random queries only a few weeks after Google began listing them.

Microsoft was quick to deny Google’s claims with a blog post entitled “Thoughts on search quality.” Microsoft’s Harry Shum simply shrugged off Google’s claims as part of over 1,000 different signals and features in Bing’s ranking algorithm. Google wasn’t happy leaving it at just that though. Amit Singhal published a Google company blog postentitled “Microsoft’s Bing uses Google search results—and denies it.” The blog post outlines much of the original report from Search Engine Land but also called Bing’s search results stale and a “cheap imitation” of Google results. Microsoft and Google employees also traded jibes over Twitter. Microsoft eventually “set the record straight” and both companies swept the incident under the carpet.

However, the feud came to a head recently when Microsoft filed an E.U. antitrust complaint against Google. The complaint is part of an ongoing investigation in the EU into whether Google has violated European competition law. Microsoft’s concerns center around the following:

  • Google acquired YouTube – puts in place technical measures to restrict competing search engines
  • Google blocked Microsoft’s new Windows Phones from operating properly with YouTube
  • Google is seeking to block access to content owned by book publishers
  • Google is restricting advertisers from accessing their own data
  • Google contractually blocks leading Web sites in Europe from distributing competing search boxes
  • Google discriminates against would-be competitors by making it more costly for them to attain prominent placement for their advertisements

The most recent example of Microsoft vs Google came in early April when Microsoft posted a stinging blog post publicly attacking Google. Microsoft’s claimed that Google had mislead its customers by claiming it has been certified under the Federal Information Security Management Act (FISMA). Microsoft’s Corporate Vice President & Deputy General Counsel David Howard, explained that the United States Department of Justice had rejected Google’s claim that Google Apps for Government, Google’s cloud-based suite for government customers, had been certified under the FISMA. “So why did Google tell governments and the public that Google Apps for Government was FISMA certified even before it had applied for that certification? We’ll have to wait for Google to tell us what they were thinking,” said Howard in his original blog post. Google claims Microsoft’s blog post was breathless and irresponsible. “We’ve been open and transparent with the government, and it’s irresponsible for Microsoft to suggest otherwise,” said a Google spokesperson.

Microsoft also posted an Office 365 vs Google Apps comparison last month. The software giant created a mini-site to compare its Word Web App against Google Docs. Microsoft highlighted several inconsistencies when the same Word file is saved on Windows Live SkyDrive (or SharePoint) and Google Apps. Microsoft’s aggressive approach to Office 365 and Google Apps shows that the company will fight to protect its core business. This isn’t the first Google war and certainly won’t be the last of 2011.

Google Apps hidden costs - Microsoft

  • Brandon

    I don’t use any @Google products. However I’m having a hard time believing that saying #GoogleApps is $50+$50 (100) one time, and $445 annually is dissuading anybody from buying 1000-seat licenses from Microsoft at hundreds/pop. Am I missing something?

  • MSisdying

    If Google is failing in the enterprise, why is Rizzo so desperate to spread FUD?

    • Grs_dev

      Because it’s his job to obliterate his competition… It’s called doing business. And yes Google IS failing in the enterprise. Go look up the City of LA’s experience with Google Apps. That’s google’s flagship account. Learn before you comment.

  • Grs_dev

    @MSisdying it’s called educating the consumer. Misinformed consumers such as yourself specifically. There is nothing wrong with defending your turf and playing counter attack. This is business. This is a battle between 2 FOR PROFIT entities.

    People should really stop making stupid remarks if they have nothing really worth while to say…

    • http://profiles.google.com/sabhishek Abhishek Sethi

      This is pure FUD. Most costs mentioned there are non-essential.
      Let’s not forget a Microsoft VP’s quote – “For every dollar you spend on software from Microsoft, you have to spend $6 to get it to do anything” :-
      http://newenterprise.allthingsd.com/20110418/office-365-hits-public-beta-today-so-microsofts-ron-markezich-gets-seven-questions/?mod=ATD_skybox
      (at the very bottom)

      Why arent they educating the customer about these, when talking total cost?

    • Grs_dev

      @google-54899cd5e153003b936a48a812121f3b:disqus

      I am not sure why the rest of your message is not appearing here, but I saw it in the body of the email.

      I agree that some of these cost may not be essential if you’re starting from scratch; however, that’s not what google is asking organizations to do now is it? They’re selling a product they’re claiming it could completely subplant Microsoft Exchange and allow organization migrate off Exchange, Active Directory and Windows all together.

      So to do that, you would have to have a practical approach and not the “in a vaccum” one which is what google is presenting. The google argument makes some sense if you’re a start up for example or a business that somehow has avoided adopting email, fax, telecommunication, instant messaging, collaborative work, remote work, telecommuting, etc over the last 20 years. I think you get the picture.

      I teach Microsoft Exchange, Windows Security, Windows Desktop, Windows Server, among many other products. I know what these products are capable of. I know these features were built because clients asked for them not because Microsoft felt like spending money on adding enhancements no one cares about. I know that these clients are very discriminating when it comes to bang for the buck. I know that a lot of the clients I work with are financial, healthcare, and government institutions who take their information super seriously.

      Google has a responsibility to outline how these organization would truly need to approach a major migration such as the one from Windows Server, Active Directory, and Exchange to Google Apps.

    • Grs_dev

      One more thing. The $1 for software = $6 to get it to do anything is simply a way to quantify how much the software costs in human resources to get it off the ground. Some organizations work more efficiently than others but on average if you spend $1 on Microsoft Software you’ll need about $6 in human resources to get it up and running. Just wanted to clarify.

      That figure is not $0 with google. Not by any stretch of the imagination. Microsoft is at least stating their mission clearly here. They would like to get to a world where the $1 an organization spends is the only $1 needed to get going.

      I can’t say it’s a wrong direction and I like the idea! For the record I am testing Office 365 and loving it!

  • Wourelia
    • Wourelia

      * you have to remove the “)” at the end of the first link manually

  • http://profiles.google.com/sabhishek Abhishek Sethi

    sdfsd

  • http://profiles.google.com/sabhishek Abhishek Sethi

    sdfsd

  • El Guido

    Bore off Microsoft.

    You might lose the lightweight office users who really don’t need all the bells and whistles (anyone have an idea of %’s?), but you will keep all the hardcore business users who have spent years developing complex addins and spreadsheets and are now too dependent on your suite to move to anything else.

    To be honest all this fuss sounds like a “please let us keep our monopoly on office” and can only end in trouble if they bang the drum too long.

  • http://pulse.yahoo.com/_WUYMYBRIBJB64XASMRH63JBBGI B0B

    That infographic is so ridiculous, I don’t even know where to begin.

    At the top, it has the $50 price. This is PER USER, PER YEAR. So, to maintain consistency with the graphic, are all of the other figures PER USER PER YEAR? I know it says annual, but it doesn’t clarify whether it is PER USER or not. If it is, where is the $360 help desk support services coming from? Sounds like that number was pulled from a dark and humid place.

    The best part of the infographic is the caption at the bottom: “Google Apps hidden costs – Microsoft” In other words, the hidden costs at the bottom of the iceberg is “Microsoft”. As evidenced by, “For 9 out of 10 companies surveyed, Google Apps are used in parallel to Office.” So, if Google Apps users really want to avoid the “tax”, they should just finish the plunge they were brave enough to take in the first place, and just ditch the archaic MS products once and for all.

  • http://pulse.yahoo.com/_WUYMYBRIBJB64XASMRH63JBBGI B0B

    That infographic is so ridiculous, I don’t even know where to begin.

    At the top, it has the $50 price. This is PER USER, PER YEAR. So, to maintain consistency with the graphic, are all of the other figures PER USER PER YEAR? I know it says annual, but it doesn’t clarify whether it is PER USER or not. If it is, where is the $360 help desk support services coming from? Sounds like that number was pulled from a dark and humid place.

    The best part of the infographic is the caption at the bottom: “Google Apps hidden costs – Microsoft” In other words, the hidden costs at the bottom of the iceberg is “Microsoft”. As evidenced by, “For 9 out of 10 companies surveyed, Google Apps are used in parallel to Office.” So, if Google Apps users really want to avoid the “tax”, they should just finish the plunge they were brave enough to take in the first place, and just ditch the archaic MS products once and for all.

    • Grs_dev

      @yahoo-WUYMYBRIBJB64XASMRH63JBBGI:disqus

      Seriously are you that incapable of understanding a simple infographic yet you feel qualified to comment here? Really!?

      First of all, this infographic is clearly not intended for you. It’s intended for someone who’s trying to decide on an enterprise messaging solution. Microsoft is not trying to sell Exchange to small businesses and individual users.

      Secondly, the statement you tried to twist isn’t even grammatically possible. It would have had to have been written with a comma not a dash. But yet you feel like you’re qualified to make a statement about this topic… What am I missing here!

      Thirdly, the context is annual so therefore the rest of the slide would be understood to be annual as well. Simple logic here. Mid to large size organizations plan their budgets on an annual basis and break their cost down to a per user count. This slide is again intended to an audience that knows what they’re doing and not the masses.

      Moreover, the $50 google charges is simply to get access to the google apps system. You pay your $50 you get to go in, and then you’re on your own. The additional costs are to integrate and support google apps. The $360 Microsoft is mentioning is estimated based on their surveys of clients who have deployed google apps for business and enterprise. It’s specifically get help desk support in addition to the $50 annual per user. Microsoft should have used google’s own ROI calculator for Apps for business though. It shows a $1800 annual cost to support 1 user in addition to the $50 after you factor in the cost of administration and support.

      The rest of the costs they are describing are for tools and utiltiies needed to migrate your organization from a Windows, Active Directory, and Exchange based email and messaging system to a Gmail based one.

      Again, please unless you understand the topic, please keep your irrelevant comments to yourself, or simply ask the right questions before having diarrhea of the mouth on here…

    • Anonymous

      The $360 for support isn’t from a survey, it is an old marketplace listing that no customer ever purchased. There was no real research done here other than looking at the Google Apps Marketplace. Power Panel and Promevo gPanel do the same thing, but both are quoted as needed for apps. Pure FUD.

    • Anonymous

      $1800 to support 1 user on Google Apps? Does the cost stay the same with more than 1 user if that is what the calculator shows? Let’s not just pick facts that suit our side here. There is nothing accurate about Google Apps really costing $1800/user/year. Even Microsoft isn’t going there…

  • Victor

    The cost of end user training is not unknown. It is $10 per user, provided by Boost eLearning. With the benefit of end user eLearning available with single sign-on there is a productivity increase. The benefits sharing and collaboration result in a productivity increase.