Google walks away with a large Microsoft Customer?

Here is the latest word around:

There are rumors of high treason at the court of King Microsoft as the New South Wales Department of Education has turned to Google for its email needs. Said to be the biggest single customer around, with over 1.3 million users under its 'control' the department has ended its 5 year contract with Microsoft and signed a three year deal which will see it use Google's Gmail.

According to the agreement, before the end of the year Google will have set up email accounts for 1.3 million students and teaches and provide them with "a world-class package of services." Snatching the NSW Department of Education from Microsoft's was probably a tough job but represents a big win for the search and ad giant. Still, this victory didn't come cheap as Google is charging $9.5 million for its services while Microsoft got $30 million and for offering some 100 times less storage space per account.

Looks like Google is betting big on "Low Cost" to win new customers

Cloud Computing Developments at Microsoft

Learning from the trend now Microsoft is seriously considering offering its MS Office application online like Google Apps a Cloud Computing application. Industry sources point out that Microsoft conducting tests for technology which will enable Web hosting service providers to offer the Office suite via an emerging technology called application streaming. Such a development means that Microsoft, with the huge data centers, will also start to stream Office directly to its customers as well. Microsoft is already beta-testing a low-end Office bundle, code-named Albany, that it will offer on a subscription basis.

Microsoft's cloud computing concept Live Mesh platform - is whereby all of our data and applications are stored on the internet as opposed to on the PC. Live Mesh is essentially a web-based operating system, letting users connect all of their devices (home PC, laptop, work computer and, in the not too distant future, handhelds and games consoles) into their own personal mesh. Files and applications can be placed into a "Mesh folder", which lives on the internet and can be accessed by all devices. The Mesh is updated with any changes made to the files or folders the next time the users is connected to the web.

As the competition hots up in the SaaS space - customer is going to benefit. Some of the industry sources indicated that Microsoft may price the application at $5 per month. This may start a price war benefiting the customers in long run. As there is still time of about 1 year for Microsoft to fully come out of closed beta it is testing with 10000 users - Google may speed up some of the new feature roll outs of Google Apps.

Google Apps V/s Microsoft Office Live - a quick comparison

Microsoft has launched Office Live (http://www.officelive.com) applications like Google Apps based on SaaS (Software as a Service) model. I was just comparing the Office Live with Googles Apps and here are some important points:

Links
Office Live: http://smallbusiness.officelive.com/
Googles Apps: http://www.google.com/a

we have done a quick comparison of free editions for small business

Item	Office Live	Google Apps
Link	http://smallbusiness.officelive.com/	http://www.google.com/a
Edition	Free (Small Business)	Free (Standard)
Services offered
Mail	Yes	Yes (Gmail)
Chat	No (?)	Yes (Talk)
Calendar	Yes	Yes
Documents	Yes (Document Manager)	Yes (Docs)
Web Site	Yes	Yes
Collaborative Workspace	Yes (Workspaces)	Yes (Sites)
Contacts Manager	Yes	No
Project Manager	Yes	No
Domain	Free for first year and after that US$ 14.95 (high in longer term) every year	Can purchase domain from partner for US$ 10
No of free emails	Maximum 100	Maximum 1000
Mailbox	??	6GB
Documents	Can store and access online but editing required MS Office (Not an online application just a storage and viewer) so effectively is is not free	Create, Edit, Access and store online (all)
Collaborative Workspace	More stress on editing & sharing documents in collaboration online	More stress on wikis (Document sharing, collaborative editing is available in Google Docs)

Microsoft is facing the heat and is forced to launch this. Well I hope Google will keep up with the competition.