Not only has it added key business applications -- a word processor and spreadsheet -- to Google Apps, but the company is offering the kind of support corporate IT would expect: IT management tools, technical support, and service level agreements for uptime.
Even all that, however, does not tell the entire story or give the scope of Google's plans.
In its press announcement and in an interview with a Google executive, Dave Giroud, vice president and general manager of the Enterprise Unit, Google made it clear that it will offer APIs for business integration, thus creating a business platform not unlike what Salesforce.com offers with AppExchange.
[Related story: " " | Podcast: | Talkback: " "]
If that happens it could become the center of an application ecosystem that leaves traditional desktop applications in the dust.
Both Avaya and Postini participated in the Google announcement on Thursday saying they would develop a "variety of solutions" based on Google's APIs. Included among those third-party applications will be e-mail gateways, enhanced security, calendar synchronization, and VoIP integration between Avaya and Google Talk.
The reason some analysts have characterized the announcement as historic rests with the fact that Google is the first top-tier company to offer a 21st century solution that will compete with Microsoft Office, a suite of applications created in the 20th century and well before the Internet or HTML existed.
With the addition of word processing and a spreadsheet as well as support, Google Apps could very well represent a watershed moment in a wave of online applications from many other new companies that some day might overwhelm giant Microsoft.
However, Josh Greenberg, senior analyst at Enterprise Applications Consulting, offers more cautions than he does encomiums about Google Apps and how successful Google can be against the Redmond giant.
"Google is the number one media company and they have a great search. That doesn't mean they have the credentials to be a player in desktop applications," Greenberg said.
Greenberg says Google needs to "dress up" Google Apps to make it look corporate in terms of security, feature functionality, and interoperability.
But perhaps more importantly, Microsoft is not standing still, Greenberg adds. Microsoft is no longer a collection of stand-alone applications. It is morphing into a strategic interface for ERP and other transaction processes, Greenberg says, pointing out the recent deal with SAP and the co-developed Duet technology.
"Every single enterprise player of note has an Office interface," Greenberg said. And despite Google's wide appeal in the consumer market, corporate uptake of Office drives a tremendous amount of personal use, he added.
Is this a play on Google's part to go head to head against a player in its own backyard, Salesforce.com and its AppExchange? For that to happen it would require a huge uptake on the part of third-party application developers.
Tony Meadow, president of Bear River Associates, an application development company, says the promise of a huge, available market for third-party applications does not always guarantee that developers will follow it. Meadow says that idea already exists with Microsoft and it has only been successful to a limited extent.
"There are people who develop complete spreadsheets with Excel that are sold as products, so it is not inconceivable that it will happen with Google but at this point it is an unknown," Meadow said.
Despite the roadblocks to gain entry into the enterprise all indications point to Google gearing up to do just that.
Sources say Google is buying up a great deal of dark fiber all around the country and at the same time hiring telecommunications engineers and delivering during the past year or two thousands of server blades to what are called Peering Centers, datacenters where networks converge to optimize connectivity.
This could be happening so that Google can offer the kind of quality of service, so-called five 9s uptime, required by the very biggest of enterprises before they would consider using an online streaming application.
Finally, Google executives are already making it quite clear where they are heading. Both Douglas Merrill, CIO and vice president of Engineering at Google, and Eric Schmidt, CEO, are increasingly going on the record about Google Apps in the enterprise.
"The hardest thing to build is a million-user consumer application with no downtime. We have taken that opportunity to bullet proof [for] large scale enterprise applications," Schmidt said.
Merrill even touches on the current climate of government regulations and the fact that Google Apps were built to meet those new demands.
"We built applications to meet regulatory requirement for even the largest enterprise companies. That means Google Apps already have enterprise security built into them," Merrill said.
Nevertheless, Google isn't the first company to attempt an Office killer. Whether it is Sun's Star Office most recently or WordPerfect from a previous generation, with 450 million users, chipping away at the Microsoft Office user base won't be easy.
Greenberg has reservations about whether or not Google understands this part of the market well enough to be a serious competitor. And he warns that one of the lessons of capitalism in the 20th century is that "extreme verticalization" doesn't succeed.
Companies need to outsource functions that companies are not an expert at. And, some would say, what Google does best is search and they should not get diverted by what other companies do best.
Only time will tell.
Jeffrey Falk, director of product development at The Members Group says his company, which has about 150 people and revenues in the $50 million range, would consider Google Apps as a replacement for Microsoft Office mostly for the cost savings. But, he added it would have to meet a number of stringent requirements first.
"If we could find an ironclad solution that would deliver a quick time to market as far as the learning curve for us and we could overcome the hurdles of security and become comfortable with that, Google Apps has some legs," Falk said.