PC World's Harry McCracken argues that Google Apps has a narrow niche right now, but could grow into something significant with time:
So who might want Google Apps in its current form? Well, there are certainly scads of workers in the world who really only need basic tools. There are absolutely many companies--especially small ones--for whom $50 a year is a far more appealing pricetag than several hundred dollars for a copy of Microsoft Office. There are definitely corporations who'd rather offload the management of e-mail and other applications to an expert like Google than to worry about them themselves. And there are unquestionably organizations who are adventuresome enough to be willing to be among the first to try dumping Microsoft Office for a Web-hosted alternative.
Whether there are enough of them right now to make Google Office a viable business, I'm not sure...
Of course, Google is one of the few companies on the planet who can cheerfully pour resources into businesses that aren't viable if it feels like it. And if it's really interested in pursuing this--rather than simply yanking Bill Gates's chain--Google Apps could evolve into something interesting.
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