The Hidden Google Tax


This is the time when many people in the United States are receiving a federal tax refund. Many of us worked hard to get a refund, hunting down receipts, and accounting for all possible tax deductions.

No one would willingly give the IRS more than they owe, or submit to taxes they weren’t required to pay. So why is it that people and businesses allow themselves to be unfairly “taxed” by Google?

Look, I am not an accountant, and I certainly make no claims about understanding the intricacies of the US tax code. What I can tell you as someone who has worked in IT for longer than I care to admit, is that I have learned there are hidden costs when using Google Apps that are tantamount to paying a “tax”.

The “Google Tax” is unnecessary and can add up quite quickly. This is especially true when running Google Apps alongside Microsoft Office. We have our own opinions, but we also wanted to hear directly from customers who have tried Google Apps. We recently interviewed more than 90 small and medium-sized organizations using Google Apps across 5 countries, including in the US, France and Japan. Our survey uncovered some very interesting findings, including:

iceberg
  • For 9 out of 10 companies surveyed, Google Apps are used in parallel to Office. These companies have not replaced Office due to user readiness, productivity requirements, security concerns and the inability to work offline. Interestingly, Gartner confirms that the vast majority of enterprises will continue to standardize on Microsoft Office, while they only evaluate free trials of Google Apps, and do not intend to spend money on deployments.
  • Of the small and medium sized businesses that participated in our survey, most were limited to using Gmail and calendar. Only two in five adopted Google Docs and two out of three companies still use Office as their primary productivity solution.

 

Taxing the Business
On the surface, Google Apps may seem like acceptable replacements for enterprise-grade products such as Microsoft Exchange Server or Microsoft Office. But many IT organizations have found that Google Apps bring extra, hidden costs. Organizations that have evaluated Google Apps have found that the projected versus actual costs of switching to Google Apps greatly increase their total cost of ownership (TCO). In particular, these IT organizations have found that Google Apps are not enterprise-ready and are inadequate without costly add-on applications, even for most small- and medium-sized organizations. The three general areas where organizations feel the Google Tax most strongly are deployment, IT support costs and user training.

Deployment
Organizations have to first migrate employee email messages, tasks, folders, distribution lists and other data from messaging solutions such as Microsoft Exchange Server to Google Apps. Because Google Apps offer limited directory services and synchronization, the burden shifts to IT departments and end users, who often have to deploy third-party applications to synchronize data and contacts. Organizations which continue to use Outlook’s rich, familiar features have to manage several add-ons. Even with those add-ons, employees typically find themselves struggling to get their calendars and email folders to work properly, losing productivity.

IT Support Costs
The time that IT people and users spend to migrate data, and the cost of third-party applications to migrate data aren’t insignificant. For example, Google Marketplace lists an Exchange to Google Apps Migrator that costs $20 per user. The cost increases greatly when people migrate data other than email. The patchwork quilt approach to shoring up Google Apps can be costly, and it fails to deliver the integrated experience most end users expect. Perhaps even more problematic for IT administrators is that Google does not offer 24x7x365 support. For instance, on weekends and holidays, you get phone support for only P1 requests, and only if more than half of your users are affected. P1 requests are critical impact items where service is unusable in production. P2 requests are high impact where service use is severely impaired. Google does not respond on weekends or holidays to either P2 requests or to lower-priority requests.

User Training
Google Apps offer very basic functionality that lacks consistent document conversion and import/export capabilities. The applications have limited flexibility, and exhibit frequent feature gaps and bugs. Because Google Apps are entirely HTML-based, users can experience substantial formatting problems and potential data loss during data and document migrations and conversions. That may be why people rarely use Google Apps in isolation and why our survey found that 9 out of 10 companies used MS Office in parallel.

Benjamin Franklin once said, “The only things certain in life are death and taxes”. While that may be true, it doesn’t mean that people and businesses should have to shoulder the Google’s hidden costs. Once people see through the sales pitch, they realize just how poor the return on investment for Google Apps actually is, and why 750 million people have chosen Office to power their business.

Comments (56)

  1. Anonymous says:

    @Rober Eijpe: Thanks for the advice on improving MS products. Office 365 is designed with your requests in mind. It is now in beta, give it a try at http://bit.ly/elrtO2. You can also check out others' review at http://bit.ly/jvde8e.

    You also pointed another important fact – Customers who use Google Apps still need MS Office as our research have shown. Google Apps may seem to provide saving on the surface, but it does not meet most customer needs. Cloud Connect is suppose to work along side with Office, but it causes major issues, such as data loss, reduce Office functionaties (see http://bit.ly/hJFvRV and http://bit.ly/eXJ3iG). Your users should not have to deal with Google Apps issues that others have expressed.

  2. Anonymous says:

    thank you

  3. GlassHalfFull says:

    Direct quote from the MSFT Tax Collector himself:

    "Every dollar you spend on software from Microsoft, you spend $6 trying to get it to do anything."

    newenterprise.allthingsd.com/…/office-365-hits-public-beta-today-so-microsofts-ron-markezich-gets-seven-questions

  4. @Glasshalffull says:

    That's a common metric for on-premise s/w, MS's and everyone else's. If you don't understand that, best not to comment and embarass yourself.

  5. Jim McNelis says:

    Oh Tom..you amuse me.

    (1) Promevo gPanel and Power Panel have the same functionality.  They are almost the same product.  

    (2) Another of the many problems with this post is you seemed to pick services at random from the Google Apps Marketplace, several have no evidence of ever being used by a Google Apps customer.  They seem to fit your argument well though, so I assume that's why you included them.  That $360/u/y for help desk services is one of those I am talking about.  

    (3) As to the training…thanks for calling out my company, Dito, and specifically our train-the trainer-package for $2500.  Most organizations find that extremely affordable, considering they get internal training staff up to speed to deliver Google Apps training to their entire organization at such a low cost.  Conversely, there are a multitude of Microsoft Outlook programs that cost $250/user.  That's just Outlook. For 1 user.

    I can keep going if you want…

  6. Larry says:

    My company tried Google Apps and I have to say this post is spot-on.  We couldn't do anything without buying a bunch of add-ons or if we tried what Google had, it either wasn't supported, didn't work as advertised or just plain was hard to use.  At least with Microsoft, I get professional software that I may have to pay more for but I know it's actually going to work and be intuitive.  My time is worth paying a little more for Microsoft software without having to buy all the add-ons.

  7. Nitin says:

    Excellent Post. I tried Google Apps and in addition to everything listed here, it’s just un-friendly to use.

  8. Steven says:

    @Jim McNelis I do not know if you are making valid comparisons.   Microsoft makes available free SCORM packages for most of their office productivity suites.    Comparing your $2500 cost to free makes your solution seem exorbitant.    

    Service desk costs are a HUGE factor with Google.   The ability to provision and deprovision users and re-associate their documents to someone else is a fatal flaw in Google for the enterprise.  

    I can keep going if you want…

  9. Ian Ray says:

    Microsoft does not have a competitive advantage by not having an app store/marketplace. We want to pay for Smartsheet, SAP Streamwork, Roambi Pro, etc. integration.

    I don't subscribe to Google's help desk but I have requested technical help. Each time I've talked to a native English speaker who directed my queries to technical experts which responded by email. All problems have been resolved within one day after calling Google.

    I've called Microsoft help many times. Unless it is part of a $300+/hour partner agreement, phone support is dismal. I can't believe Microsoft is bragging about phone support… you guys use Punjabi call centers who transfer me around between scripted employees with minimal technical knowledge. If I were Microsoft PR, I would not even mention the words phone support as any customer who has actually tried to use the "free" phone support knows what happens.

  10. John Seth says:

    Exchange to Apps Migrator is Free… Where did you get the 20 bucks?? But.. more important than that.. you are saying that NOT having a marketplace is an advantage.. I laugh of your dirty tricks

  11. Jim McNelis says:

    @Steven,

    Google offers similar free training as well.  This is personal training.  Are you insinuating that Microsoft Exchange/Office doesn't require training and that there are not many many 3rd parties reselling training for Microsoft products?  

    It is actually really easy to move assets and reallocate accounts in Google Apps.

  12. kai says:

    I tried switching my small business over to Google since I thought I would save money given that it was a free product.  I was wrong.  While some areas of Google were better such as sharing with external customers, the frustration with all the other parts did not make free worth it.  I did sign up for the Office 365 beta so I'm hoping that is better than Google Apps.  Right now, I'm sticking with my installed desktop software and hosted Exchange email.

  13. jim says:

    I find it funny that no one, even Microsoft, has mentioned Google's lowering of their free limits from 50 to 10 users.  Not making money Google on Google Apps?  

  14. Long-term Microsoft Partner says:

    That's a bit rich – Microsoft claiming there's a Google Tax, especially when most Tier One desktop manufacturers don't have systems available for sale without the Windows 7 tax.

    It is about time people started looking at things with *both* eyes!

  15. Martin (NL) says:

    Having Google ADWORDS and ANALYTICS shows you are being fooled all the time. Their own monitoring systems tells you you are having less visitors (about 80% !!!) than you are paying for by your adwords campaign!!!

    …but of course, I'm viewing my stats in IE :))

  16. Robert Eijpe says:

    Hopefully Microsoft starts to promote their own stuff and make it cheaper,  faster, easily to integrate and more user friendly. The last 4 year we used hosted MS Exchange of Mailstreet with outlook and outlook web access. But this year, after a pilot with our key users, we migrated it all to Google apps for business. We still use MS Office products but use Google Docs and Cloud Connect for collaboration documents between users. Now we have much more functionality for quarter the price we paid at Mailstreet. Please don’t blame Google and your (formally)  customers but improve your own products so current customers don’t have to think about migration to other vendors. In the Netherlands we say: winners look at their own weaknesses and not complains at others strength. So be a winner and not a loser.

  17. Joe roberts says:

    Why not do the same graphic detailing the costs of using Microsoft instead?  I'll tell you why you don't, because it's much more expensive.

  18. Jen says:

    Why are all you folks arguing about Office and Google, just use OpenOffice!  It's better than both of them combined.

  19. Martina Grom, Office 365 MVP says:

    Te Postini factor is one of the most interesting ones: Postini is like a "must have" in Google Environment to secure your E-Mail. In Office 365 this feature is already included via FOPE.

  20. Ian Ray says:

    @Martina Grom

    Doesn't the EHA option for FOPE cost money? This is what is comparable to paid Postini service.

    Postini for Google Apps also has a regular (no extra cost) version similar to the way BPOS handles this with FOPE.

    If Microsoft made this no extra cost, that is good… but if that is the case, it is not advertised very well.

  21. michael (MadProff) VERRY says:

    WE BRITS INVENTED SHARP PRACTICES & cons m.s use them..!!??

  22. Mario G says:

    Postini is Free for spam, virus and content filtering for Google Apps customers. The $33 for Postini is only if you want to archive your email with 10 year retention.  $13 for 1 year retention.  

  23. Lee Davis says:

    What in the uholy crabcakes are you crying about?! No one told these companies it was mandatory to employ Google Apps anywhere. They all do so out of either freewill or the sense that they're missing out on something "cool". The same time that they spent deciding that they need to deploy GA along with Office can be spent in deriving more suitable alternatives or ponying up some cash for what will WORK! Neither Google or MSFT have our best interests at heart – only the feel of our money.

  24. Walter Longman says:

    I haven't tried Google Apps yet and now after reading this I think I should not. They seem certainly user-unfriendly…

    My company recently switched to Microsoft products and now the work is getting much more fruitful.

    MP3 Editor: http://freemp3editor.org

  25. sarah says:

    Sadly google apps aren't free anymore.

    If someone is interested I am selling few domains with Google Apps standard edition attached.

    MaxGoogleAppsAccounts: 10, 50, 100, 500, 1000 (from 80$ to 400$) – depend from domain

    The great thing is you can setup a new domains under the existing account and start using Google Apps on the new domains at no charge.

    mail me to: "sarah1980x /at/ outlook /dot/ com"

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