I'll bet Microsoft (NASDAQ:MSFT) isn't exactly breaking a sweat over this week's rollout of Google Apps Premier Edition. Google's (NASDAQ:GOOG) premium suite of Web-based application software is just a speck on the radar.
For now.
Come May, Google will begin charging users of the enterprise-friendly software collection $50 a year. Upgraded versions will include Gmail accounts with five times the storage capacity of free accounts, in addition to phone support and the ability to remove Google's contextual ads from the offerings. But for now, everything is still free.
Google has done things right so far with these applications. It has been giving them away, and it has done well, supposedly having signed up 100,000 different organizations. More importantly, it has won campus accounts at the likes of Arizona State University, San Jose City College, and Lakehead University.
The strategy has been a lot like Apple's (NASDAQ:AAPL) move to flood elementary schools a couple of decades ago with its computers, until Dell (NASDAQ:DELL) took over. Nab 'em while they're young. If you can strip the tethered grip that Microsoft Office holds on college kids, it should pay dividends down the line as they grow up and move into the corporate world.
Naturally, this won't be an immediate blow to Microsoft, though the timing couldn't be any better. Just as Mr. Softy is trying to talk users to upgrade to Office 2007, along comes the equivalent of a Chick-Fil-A guy with an arsenal of toothpicks.
Folks will also need to warm up to the premise of Web-stored application software. It's already happening on the corporate front, with companies like Salesforce.com (NYSE:CRM) leading the way. Sure, there will be security and uptime reliability issues when you're leaning on someone else's server. But Google's no dummy. Besides, when you're drastically undercutting the market-leading Goliath, you've got a pretty impressive slingshot.
The only real question that remains: Can you effectively fire off toothpicks with a slingshot?
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Longtime Fool contributor Rick Munarriz does do Windows, but he's also an active user of Google's free apps. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
