Google Apps is now an Exchange-replacement; Users can even keep Outlook

On Tuesday, Google announced a new feature of Google Apps for its enterprise customers that allows users to sync their mail, calendar, and contacts with Microsoft Outlook. This enables Google Apps to replace Exchange on the backend.

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I’ve always thought of Google Apps as an product that’s trying to replace Microsoft Office with a simpler, cheaper, Web-based solution. However, on Tuesday Google unveiled Google Apps Sync for Microsoft Outlook, a new plug-in that allows Premier customers to access their Google Apps mail, calendar, and contacts using Microsoft Outlook, while also being able to have full Web access to all of our their data over the Web just like any other Google Apps customer.

This move changes the game. It pits Google Apps against Microsoft Exchange, the business world’s most popular email groupware platform. And, in many ways this makes a lot more sense for Google and allows the company to play to its strengths in building Internet-scale backend systems.

The challenge, of course, is uptime. In 2009 alone, Google has already had several highly-publicized outages of Gmail, which some companies are already using as their primary messaging system. Google promises at least 99.9% uptime for its Premium customers or else it will refund them the cost of the service. Nevertheless, it’s a leap of faith for an organization to turn over it’s backend services to Google.

It’s clear that Google is making a strategic bet on winning over business customers. Besides the new Outlook plug-in, Google has recently added a number of business-oriented features to its messaging platform, including:

• Offline Gmail
• LDAP directory synchronization
• Blackberry BES interoperability

For the companies that take the leap of faith with Google, cost is usually the primary motivator. Google charges its Premium customers $50 per user per year. Even hosted Exchange plans cost about $500 per month plus about $6 per user per month. For a smaller company with just 100 users that would make the cost of Google Apps Premium $5,000/year vs. $13,200/year for the hosted Exchange solution. And an in-house Exchange solution will typically have a total cost of ownership (TCO) that is even higher than the hosted solution.

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Take a look at the new Outlook feature in action in this video demo from Google:

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