IBM (IBM) Goes After Google (GOOG) Apps Business

By Douglas A. McIntyre Updated Apr 27, 11:24PM EDT · Published Oct 2, 6:14AM EDT

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bear Google (GOOG) is trying to diversity beyond the search business. One of its most important attempts is to offer low cost applications for PCs. Its Google Apps includes e-mail, calendar, word processing, and presentation functions. The price for the Apps product is $50. Its target is the business user based of Microsoft (MSFT) Windows.

While Google is trying to get business for a competitor that changes a high rate for its PC software, IBM (IBM) is about to attack it with a lower-priced product that could severely damage the search company’s initiative.

IBM’s new LotusLive iNotes will offer e-mail and other critical productivity tools. The price will be a modest $36 a year per users. “This is trouble for Google,” Gartner Inc. analyst Matthew Cain told the AP.

Google’s “pitch” to the investment community is that it can build a business beyond search advertising. So far it has not been very convincing. Some of its major services like YouTube, its Checkout e-commerce system, and Google Earth bring in almost no revenue. Some analysts believe that YouTube loses as much as $300 million a year. Apps is an essential part of Google’s case that it can find new and large enterprises to diversity its sales.

IBM has some important advantages over Google. Big Blue has relationship with many major companies around the world. It provides them with hardware, enterprise software and IT consulting. IBM’s revenue last year was $103 billion, and it has sales forces and tech support in almost every country .

Google has none of that.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.