Why Microsoft’s Office 365 will clobber Google Apps

Office 365Yes, Microsoft is a slow, lumbering giant. It has been working on cloud for years, with numerous iterations, that took so long cloud proponent Ray Ozzie got fed up and left. Microsoft had to work through cannibalizing reseller arrangements, reconciling how to reach consumers versus businesses and a host of other issues. With Office 365, Microsoft has finally delivered an end-to-end cloud platform for businesses that encompass not only its desktop Office software, but also its server software, such as Exchange and SharePoint.

Contrary to Google’s narrative, cloud based office software is still a wide open market. The three million businesses that have “Gone Google” — proclaimed on billboards in San Francisco airport’s new Terminal 2 — are for the most part Gmail users, who are still happily using Microsoft Office and even Microsoft Outlook. Gmail is a fast, cheap, spam-free and great solution for business email, especially relative to the expensive, lumbering email service providers. Google Apps has definitely found a niche for online collaboration, but generally for low-end project management types of spreadsheets and small documents. The presentation and drawing Google Apps are barely used.

Yes, there are definitely Google Apps wins, since it seems cheap. On implementation, businesses find that switching to Gmail is one thing, but switching their entire business infrastructure to Google Apps is a completely different animal that goes far beyond simply changing how employees are writing memos.

Imagine you are a 25-person law firm in Kansas City running Microsoft Office, Microsoft Exchange for email and calendaring, Windows Server for file sharing, SharePoint for wiki/collaboration, and have a custom billing application written in .Net and running on Microsoft SQL Server. Like the majority of small to medium-sized businesses, you are an all-Microsoft shop.

Google comes in and presents: Google Apps looks primitive and doesn’t have all the features of Word and especially Excel and PowerPoint. It also doesn’t work offline. Email and calendar is sort of the same, but you should really use a browser instead of Outlook to get full functionality. Plus, you have to manually move all of your SharePoint content over to Google Sites, the file server isn’t integrated with the Windows or Mac desktops, and you have to keep your .Net app the way it is or rewrite it into Google AppEngine.

Compare this experience to the Microsoft value prop: go home on Friday, and on Monday when you come back everything will look the same, except now we are hosting it all and you can lay off your IT staff. There’s no training required. Employees can run apps on the desktop or in the browser, whichever they like, and the browser version looks like the desktop version, only cheaper. For a regular business where technology really is just a pain and an expense item — not a mission in life —  it’s really a no-brainer. In addition, Microsoft has historically been very smart about seeding nonprofits and educational institutions with copies of software that are virtually free, which it will likely also do with Office 365.

The thing about Microsoft Office 365 is that it looks really good, and look and act just like the well-known native Office apps. The ribbon interface is intuitive and the apps are fast and responsive. Google Apps, conversely, looks like it was made by college students from a weekend project. I don’t understand how Marissa Mayer loves fashion like Oscar de la Renta at night, but goes to work during the day and insists on data-driven web sites that look like crap. Google hasn’t shipped a good user interface since Google Maps. The different between Office 365 and Google Apps is glaring.

Microsoft definitely has a few issues to work out. As Google pointed out, collaboration is not very simple, since you have to be a Microsoft Office 365 subscriber in order to collaborate. However, Microsoft already launched Docs.com, a free Office offering with free collaboration. Microsoft will likely integrate Skype into Office 365, which will offer chat, audio and video conferencing, screen sharing and (probably) free document collaboration based on Docs.com.

Google’s claim that Office 365 doesn’t support many platforms is moot. It works fine on my Mac OS X with Chrome, and officially supports Internet Explorer, Safari and Firefox. Office definitely has numerous pricing tiers. The lowest tier is on par with Google Apps and the higher tiers include subscriptions to the desktop software, which help to transition Microsoft from feature-driven bloatware to subscriptions —  a model that has worked for Adobe.

Peter Yared

Google Apps will definitely have a place for new businesses and small businesses with younger employees that aren’t tied to the Office user interface. Google App Engine is a hidden jewel within Google Apps and its hands down the fastest solution for programmers to create and deploy a comprehensive web app. However, with Office 365, Microsoft is clearly on a trajectory to continue its Office hegemony. Microsoft is much more concerned about Apple than Google at this point, and insuring that it monetizes Apple devices like it used to make more per Mac than Apple did in the early 1990s. Conversely, Google should be much more concerned about Microsoft, which now has almost 30% marketshare in search.

Peter Yared is the vice president of apps at Webtrends, which acquired Transpond, a social-apps developer he founded. You can  follow him on Twitter.

Filed under: Business and Technology, dev, DevBeat, enterprise, VentureBeat

Cloud-based development environtment startup Cloud9 raises $5.5M

Cloud9 IDECloud9, a cloud-based development environment startup, closed a $5.5 million first round of funding from Accel Partners and Atlassian Software, the company announced today.

Cloud9 is a web-based programming environment for developers to create and run both web and mobile applications written in JavaScript and HTML5. The service is hosted on cloud (remote) servers and accessed through a web-based interface. Developers can access, build, edit, test, debug and share projects anywhere with the service.

Previously, Mozilla’s online development environment SkyWriter merged with the Cloud9 service, which was also recently used for the first cloud development environment for Google Chrome OS, as well as the integration with GitHub, BitBucket and other environments.

The company said it will use the funding to consolidate its leadership in the emerging cloud-based Development as a Service (DaaS) segment of the $8B app development market. Cloud9 also plans to expand
its Amsterdam-based development team with a new U.S. headquarters in San Francisco, California.

Ajax (the company that presented Cloud9) is one of 53 companies chosen by VentureBeat to launch at the DEMO Spring 2011 event.

Filed under: Business and Technology, deals, dev, DevBeat, mobile, News, Venture Capital, VentureBeat

Stealth chip startup SuVolta unveils way to dramatically reduce power consumption

SuVolta is coming out of stealth today to announce that it has created a chip technology that will reduce the amount of power consumed by semiconductor chips by more than 50 percent without sacrificing performance.

Reducing power consumption is the biggest challenge in electronics today, since it means that mobile devices can last longer on a battery charge. The Los Gatos, Calif.-based company says its PowerShrink technology addresses a fundamental problem in the physics behind transistors, the basic building blocks of all electronic chips. If it works, the technology could help improve battery life in portable products — smartphones, tablets, and notebooks — and offer an alternative to a revolutionary Intel technology known as Tri-Gate.

The alternative is an important one because other chip makers want to keep up with Intel. To do so, they would ordinarily have to invest billions of dollars in chip manufacturing technology and build a new factory. This kind of company is pretty rare, as we can’t remember when we wrote about a financing for a company with fundamental technology behind it.

Intel announced Tri-Gate a few weeks ago and said it will use 3D structures to pack more transistors into a given space and allow it to cut power consumption by 50 percent and improve performance by 37 percent. SuVolta attacks a problem called transistor variation. It minimizes the electrical variation in each of the millions of transistors on a chip. On the manufacturing level, SuVolta merely tweaks the “recipe” for making a chip. The result is that it reduces the variation in voltage for a chip, allowing for efficiency improvements.

“The semiconductor industry is pursuing power efficiency as doggedly as some early explorers searched for the fountain of youth,” said Nathan Brookwood, an analyst at Insight 64. “But today’s goal — longer battery life — isn’t an unattainable fable. Any technology that promises to greatly improve the power efficiency of microprocessors without sacrificing performance is worth a close look.”

SuVolta’s team of scientists and engineers is led by Scott Thompson (right), an internationally recognized expert on transistor technology and a former Intel fellow. The team redefined the ordinary transistor, lowering the power consumption without requiring the chips to be built with new, untested fabrication equipment. That fact is key to ensuring that the PowerShrink transistors can be built at a low cost. The effect is like putting a new engine in a car that doubles its miles-per-gallon and easily fits in the same car chassis.

SuVolta licenses its technology to chip makers and it already has a major customer with Fujitsu Semiconductor. The PowerShrink platform will be in production in 2012. Bruce McWilliams (left), chief executive of SuVolta and former CEO of tech licensing firm Tessera, said that the PowerShrink technology will scale to smaller feature sizes as manufacturing technology advances.

SuVolta’s got some premium investors backing it, including Kleiner Perkins Caufield & Byers, August Capital and New Enterprise Associates. The company raised $22 million in funding in May 2010. Bill Joy, a partner at Kleiner Perkins, said that SuVolta’s platform will enable power reductions in existing chips and in those where the designs are still in the works.

Handel Jones, president at market analyst firm International Business Strategies, said that SuVolta has broken a power impasse with technology that has been demonstrated. It is proven at 65-nanometer manufacturing and could be used at 28-nanometers and beyond.

SuVolta could turn out to be a strategic company in a lot of ways. Intel is losing out to the ARM microprocessor architecture in terms of the numbers of units sold each year. The primary reason is that ARM’s licensees build the lowest-power microprocessors that can be used in smartphones and tablets. Intel is chasing ARM, but the power problem has been holding Intel back. With Tri-Gate, Intel can make some gains. But SuVolta can pretty much arm all of the chip makers with low-power technology.

SuVolta was founded in 2006 under the name DSM Solutions and it has 45 employees. To date, the company has raised $58.6 million. SuVolta originally pursued a technology called JFETs to reduce power in digital products. But the company concluded that wouldn’t work because it required companies to invest in new infrastructure. The company brought in McWilliams and then Thompson, who then crafted a product strategy that was more realistic. That led to the May 2010 funding.

The company has expressions of support from ARM, Broadcom, Cypress Semiconductor, and Fujitsu.

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