Does Google Apps have zero customers??

A Forbes article looks at Google Apps versus Microsoft and mongers some fear: Apps is “starting to expose chinks in Microsoft’s armor” and “gaining momentum in its audacious assault on Microsoft’s core business”. Yikes.

But where is the proof? Google gave Forbes three customer references – but not one of them has actually switched to Apps yet. The best the reference customers will say is, “it’s true – we are evaluating it!”

Hmm… millions of seats given away for free and all Google can muster is three companies that are kind-of-sort-of thinking about deploying it for some of their users – sometime in the future.

Google does not break out revenue numbers for Google Apps. So if they don’t have any reference customers and they don’t disclose revenues, how do we know they are succeeding? The article refers vaguely to “several hundred million dollars” in revenues for its business software – and claims that it is profitable. But what is it counting and how does it measure profit?

Let’s suppose that “several hundred” million referenced by Forbes translates to $300m in revenues for Google Apps. At $50 per user per year, that would imply 6 million paid-up users. Yet Google’s PR people can’t put Forbes in touch with a single CIO who runs his business on Google Apps? Not even one?

What’s really going on here: Google is using free apps as a loss leader. First, it wants to build up a sticky audience of customers (remember: Google used to be just a home page – not sticky at all). Second, it wants to rile Microsoft, and claiming that business customers are switching from MS to Google is a great way to do it. (The Google hype campaign already panicked Microsoft into launching their own online offering earlier this year.)

Are enterprises really switching to Google? Of course not. Google apps is not yet ready for IT prime time – in fact, it is far from ready. There are many deal killers: security, privacy, legal compliance, one-sided terms of service, fear of SaaS and downtime etc. etc. etc.

One final gem… in section 15 of the Google Apps terms of service, it makes clear that Google will “IN NO EVENT BE LIABLE” for just about anything. However, they do make one generous offer: if we lose your company data or accidentally broadcast it to the whole world, we’ll refund you up to 12 months of service! Gee, thanks Google.