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Office Live vs. Google Apps: How Will Small Business Pay for Software?

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Microsoft's plans for its Web-based Office Live services for small businesses sound a lot like a me-too Google's Apps: simplified Web site design and hosting, e-mail sent from the company's domain and tie-ins to instant messaging.

 

The big difference is that while Microsoft is admittedly hitting the SaaS market a little late, it is coming with a subscription revenue model in full force, something Google says it is still only considering.

 

Microsoft is offering per-month subscription packages, ranging up to about $40, that include more advanced asset and contact management software and account access for numerous employees. (Of course, Google doesn't have a lot of software that could be loosely categorized as CRM, anyway -- at least not yet.)

 

We'd also note that TechWorld reports Microsoft plans to integrate administration of various search advertising services, include Google's AdSense, into a platform called OfficeLive adManager.

 

So, on one side you have a traditional software vendor that's trying to preserve some of its traditional licensing revenue model as it enters the SaaS market, while still looking to tap into "Web 2.0" advertising revenue with its belated AdCenter product.

 

On the other, you've got an advertising-based company that's looking for ways to expand its business reach via acquisitions and still figuring out how to get users to pay it directly for services.

 

At the very least, both rivals agree there's little compelling demand from businesses for online word-processing, which hasn't made the cut in either's business offerings.

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