While the glitch itself was minor and was fixed in a few days, the real concern - at least at Brown - was with how Google handled the situation. Without communicating to the internal IT department, Google shut down the affected accounts, a decision which led to a heated conversation between school officials and the Google account representative.

In the case of the Google Apps glitch, which began on Friday, September 11th, a couple of students notified Brown's Computing and Information Services department (CIS) that they were able to read emails belonging to other students. The CIS department contacted Google on the following day and sent out an email to the 200 students whose mailboxes were in transition, asking them whether or not they were experiencing the same problem. Some were. The affected students could either see entire inboxes belonging to another classmate or, in other cases, saw less than 100 messages that did not belong to them.

In the end, only 22 out of the 200 students were affected, but the fix was not put into place until Tuesday. That means that the students had access to each other's email accounts for three solid days (Saturday, Sunday, Monday) as well as parts of Friday and Tuesday before the accounts were suspended by Google.

Oddly enough, this situation seems to be acceptable, according to Tom, who, reports Brown's daily newspaper, "praised Google for its prompt response." (We don't know about you, but if someone else could read our email for three days, we wouldn't exactly call that "prompt.")

Massive data migrations are no small feat and Google's slip-up in this case is certainly not the first nor the last time that something has gone wrong. Still, Google is notably concerned when problems like this happen. "It was a small hiccup along the way and it's an issue we've taken extremely seriously," said Google's Rajan Sheth.

The Real Problem Wasn't Email, it was Lack of Communication

However, the real issue that concerned the university was the matter of communication between Google and the CIS department. Before fixing the issue on Tuesday, Google suspended the affected accounts, a necessary step that was taken so no more data was improperly shared. What angered the IT director, though, was that the accounts were suspended without first notifying CIS.

"I've spoken very forcefully with the account (executive), my boss, senior administrators at Brown -- including the president. (Google needs) to find a better way to communicate with us," said Tom.

When considering a move to a cloud service, most companies and institutions focus on how the change will affect budgets and the bottom line. They also think about data conversion issues and possible needs for re-training in some cases. However, one of the things that doesn't come up as often is exactly how communication will take place between the business and the company involved. Sure, companies may discuss the procedures (use this form, this phone number) and uptime guarantees, but they can't possibly imagine every scenario and spell out how they want the cloud provider to perform.

No longer can company execs just stroll into the I.T. guy (or gal's) office and cry out "my email is messed up!" Now there are a few more hoops to jump through. And whether it's Google or someone else, the interactions that take place and the way the issues are addressed will be a learning experience on both ends.

Wave Today: Stable, Faster, Ready for the Masses

Since we got our first hands-on look at Google Wave in June, the platform has matured nicely. While some early reviews panned it as buggy and slow, today's version of Google Wave is very stable and fast.

As Google puts it, "A wave is equal parts conversation and document, where individuals communicate and work together in a multimedia environment - the wave itself." Users can, for example, write documents, but also insert maps, photos, web feeds, and widgets. Most of the usage we have seen so far has been more akin to a well-structured chat room, but once a more mainstream audience gets its hands on Wave, we will likely see a wider range of usage scenarios.

Google Wave has also managed to attract a large number of third-party developers by now who have programmed a wide range of new robots for Wave. These range from the weird, like a robot that translates every wave into Swedish Chef speak, to more useful features like URL shorteners and an anti-spam application.

We got a chance to talk to Takeshi Numoto, the corporate vice president of the Microsoft Office Product Management Group, last week. He gave us more information about the Office Web applications. The web-based applications were designed to work on any browser and should even work on most mobile browsers. While some functions will only be available when Microsoft's Silverlight is available on a machine, Silverlight is not a requirement to run most features of the web applications. Numoto stressed that the apps will run on Firefox, Safari, and, obviously, IE, though Google's Chrome is suspiciously absent from this list (Stephen Elop, the head of the Office division explains why at the end of this interview).

The web applications will be tied in closely with the desktop clients, and the online storage will be managed through SkyDrive. For consumers, the web apps will be hosted on Windows Live and will be available for free, although Numoto remained tight-lipped about possible plans to monetize the apps through advertising. We could only get him to acknowledge that Microsoft was indeed 'experimenting' with various options, which we can only assume includes advertising.

Real-Time Collaboration

Another important aspect, which also ties in with a feature that Microsoft is stressing in the desktop applications of the Office suite, is the ability to collaborate on any document with various users simultaneously - including those using the web applications. While we haven't seen this in action, having a rich-text editor at hand for real-time collaboration on Word and PowerPoint documents is going to be a very exciting feature for a lot of users (however some third-party service providers who currently offer similar services will probably not be happy about this).

Enterprise: Office Web Behind the Firewall

For enterprises, Microsoft will offer two solutions. One will be hosted as part of Microsoft's Online Services. Another version, however, will be available for companies to host on their own servers on top of SharePoint. For enterprises, especially those that have long felt that cloud computing wasn't for them, this self-hosted version of the browser-based Office suite is going to be a very attractive solution, especially considering that all of Microsoft's 90 million Office annuity customers will get access to this version as a regular part of the updates that come with these volume licenses.

As Numoto told us, Microsoft believes that this will allow the company to differentiate itself from other companies that offer office solutions in the cloud. While Takeshi was careful not to mention any competitors by name, it is obvious that this is aimed at Google (and perhaps less so, startups like Zoho and ThinkFree).

Clearly, this release will be a major deal for consumers and enterprises. A free version of the browser-based Office application that easily syncs with the desktop version and allows collaboration between users on both systems is going to be a big deal.

What About the Desktop?

The desktop apps obviously also got a make-over. But compared to the shift to Office 2007, the current release features only minor cosmetic updates from what we have seen so far. The integration of the web apps looks like the most exciting addition, as well as the ribbon interface becoming standard across all the applications. Also, Microsoft is putting a lot of emphasis on real-time collaboration, and different users can now edit documents simultaneously. Alhough Numote emphasized that all edits can be reversed.

Numoto also stressed the Office team focused on improving some of the most often used features. As an example, he told us that cut and paste is obviously one of the most popular features in Office, but that Microsoft found that after pasting something into a document, the key that was used the most often afterward was 'delete.' In order to improve the cut and paste process, Office will now feature a 'cut and paste preview,' similar to the feature that Office 2007 already offers for changing styles and fonts, for example.

Outlook aficionados will also be happy to hear that the email client will now feature an option to 'ignore' unwanted threads.

While the Technical Preview, which was announced today, will only be available for a limited number of users, the beta program will be open to everybody. Microsoft expects to ship the final version of Office 2010 in the first half of 2010.

So far, we haven't had a chance to actually test-drive the desktop or web apps ourselves, but you can expect an in-depth review from us once we get access to the beta.

But love? Not so much. Google, intent on building its enterprise channel, has recognized that many Outlook users - particularly enterprise users - aren't ready to make the leap to the cloud and to Google Apps. But maybe, just maybe, Google Apps Sync is what it will take to woo them.

Not Quite Gears

"Although we use the same protocol as gears, we don't use gears per se," explained Vander Mey. "It's all saved in outlook PST files. From a technical level [there] is a MAPI provider; when you connect to Exchange we have built our own MAPI provider - we just change what's going out on the wire - as opposed to licensing from Microsoft."

Key Features:

E-mail, calendar and contact sync
Synchronize all Outlook fields in both directions, keeping them up-to-date; Uses a Google native e-mail protocol.

Free/Busy and Global Address look up
The Global Address List feature lets you search for and access e-mail addresses of users and resources in your domain.

Simple, user-driven data migration
Letting users move data to Google instead of having to wait for IT admins.

Google Apps Sync will be launched this afternoon.

You'll need Outlook 2003 SP3 or 2007 SP2 (or SP1 with a hotfix), running on Windows XP SP2 (with selected hotfixes) or Vista SP1 (with a hotfix).

If you want to see how Google Apps for Microsoft Outlook works, watch this three minute video.

Interestingly, while student email is often outsourced, faculty and staff email is generally hosted in-house because of concerns over confidentiality. Only 2.3% of all schools outsource these systems to commercial vendors.

Schools, for the most part, aren't able to keep up with the speed of innovation on the web anyway, and the fact that many college-run email systems have fallen far behind the innovation curve has driven a lot of students to just forward their school email to a commercial account anyway.

Given the cost pressures that schools are under right now, the choice for these colleges is to either spend a lot of money on providing costly email systems that most students hardly ever look at, or to outsource them to a commercial vendor, or even to Google, which will happily offer these services for free.

Next Step: Get Rid of It

The logical next step, then, is to simply stop providing .edu email addresses to students - and a number of schools are actually considering this move. Last month, at The Chronicle of Higher Education's Technology Forum, Steven Zink of the University of Nevada in Reno announced that his campus plans to stop providing students with a college email system altogether.

Most colleges will probably continue to provide students with an official .edu email address, but this will just be used for forwarding mail to another account - something most students prefer over using their college email systems anyway.

In many ways, this makes a lot of sense. Schools won't give up email as their preferred way of communicating with students anytime soon, but the days when colleges provided the most important on-ramp to email and the Internet for their students are long over.

Gmail, on the other hand, features a 'flaky connection' mode which gives you the option to compose new messages offline. Gmail then sends them automatically once you are back on the Internet. Without being able to enter new appointments or tasks into your calendar, or the ability to move appointments around, Google Calendar's offline feature is not half as useful as it could have been.

Earlier this year, we saw some leaked screenshots that showed the ability to edit your calendar in offline mode, but Google apparently did not make this available yet. This is quite a disappointment, because the 'flaky connection' mode works very well in Gmail. We can only assume that Google will add a more fully featured offline mode in the near future.

The Google Apps Premier Edition includes Google's Gmail, Docs, Sites, and Video for Business services, as well as numerous tools for migrating from other email services and enhanced security features.

With this, Google is clearly pushing for a wider adoption of Google Apps in the enterprise. Google could probably support these customers itself, but having a network of local sales forces and support staff would be costly and probably not something that Google would want to undertake in this volatile economic climate.

Resellers will get recurring revenue for as long as the customer uses Google Apps and will be getting the service from Google with a 20% discount, which is about $40 a year per seat.

For many users of Google Docs, that answer is "no." According to Google's Help Topic on SSL as well as their Google Apps Edition comparison guide, SSL is a feature only made available to users of Google Apps Premier and Education Editions. However, in some informal testing on our part, it appears that users of Google Apps for Your Domain were given that option as well, despite the fact that their Google Apps edition clearly reads "Standard." For everyone else, though, Google Docs remains an unencrypted HTTP session.

In a business or educational setting where Google Docs is being used, your I.T. admin has probably turned on SSL for you by activating the feature that forces SSL sessions for all users. If they have not, though, you can still switch on SSL for yourself, says Google, but their help documentation fails to explain how that can be done. All the documentation says is that "your users can enable HTTPS when necessary."

What they probably mean is that anyone can type in "https" when entering in the URL for a Google Apps service in the address bar of their browser. Since your average internet user doesn't think about these sorts of things, though, that's probably not the best solution in terms of security.

While we hope that any I.T. admin in a corporate setting knows well enough how to enable a basic security feature such as this, it would still make us more comfortable if these sorts of things were enabled by default. The only reason to not enable SSL is because it can slow down your connection to Google services. Still, in the event of network issues, I.T. admins could temporarily disable this feature to speed up access for their users. But Google hasn't chosen to make security the default - they've chosen speed.

Outside of Google Apps, everyday users of Google Docs don't have an option in their Google Docs settings to force the service to always use SSL. Like those with a neglectful I.T. admin, these Docs users would have to remember to type in the "https" prefix if they want to use a secure connection.

SSL Implemented Haphazardly

Manually typing in "https" is all well and good, but let's face it - most users won't ever know to do this and those of us who do know won't remember. Not only is this process laborious, it's inefficient, too. For example, those who want to take advantage of the Gmail Calendar and Docs widgets, which allow for one-click access to other Google services from within Gmail, would have to forfeit a secure connection in order to do so. The only recourse would be to not use the widgets at all, and that certainly disrupts our workflow.

However, if you've enabled SSL within your Gmail settings, connections to your other Google services will also be encrypted if you use the navigation bar at the top left of your Gmail...but only if you use the navigation bar. Even when signed into your Google account, typing in "docs.google.com," "calendar.google.com," or using the Gmail widgets will still take you to the HTTP site.

At Least They Have SSL...

What's really unfortunate about this potential security issue is the fact that Google is actually leading the way among webmail and web app providers when it comes to offering SSL to its users. Although other free webmail services from Yahoo, Microsoft, and AOL, for example, may authenticate you upon login via HTTPS, they drop down to unencrypted mode immediately after the authentication is completed.

However, it could be argued that those other services are not claiming to be a secure replacements for business use. Since Google promotes Apps as a web-based alternative to expensive desktop software, many people mistakenly assume that means Google services are, in general, "pretty much" secure for personal use, too. Apparently, that's only true to a point.

It's also worth pointing out that nothing, not even SSL, can keep a determined hacker out of your account. As ZDNet reported at the beginning of the year, even SSL can't keep blackhats from hijacking your session through the use of "sidejacking," a trick that enables hackers to take control of any Web 2.0 app that relies on saved cookie information. (There have also been other reports of Google Docs security issues, but we couldn't reproduce the problem.)

Providing SSL to everyone is the least Google could do. And to the other webmail/web app providers out there: it's time you followed suit.

Enter the dark horse Google Apps - the new platform for day-to-day business operations in DC - now that Vivek Kundra, Chief Technology Officer for the District of Columbia, has decided to switch the District's 38,000 employees from the installed Microsoft Office suite to the Web-based Google suite.

While this change won't be taking place in the Oval Office, it's still worth noting. The win marks a big step forward for Google Apps, which a little over a year ago, was still a viable target for Microsoft finger-wagging campaigns, decrying Google Apps' viability.

That view is definitely changing.

Earlier this year, Bernard Lunn hypothesized that Google Apps had become a true threat to Microsoft Office:

"Solid economic engine, good on collaboration/mobile, increasingly mature/ready for prime time...Yes, Google Docs looks like a major winner."

And this move by the DC CTO seems to validate that hypothesis.

With "belt tightening" on everyone's lips, the decision to move from the entrenched Microsoft offering to a more affordable solution could draw attention - especially given Kundra's focus on delivering more technological power at a lower cost:

"When I moved to Washington, I had more computing power on my laptop at the local coffee shop than the average police officer or teacher. We looked at the cloud computing model and the consumer space. Compared with the cost of owning infrastructure, it's far cheaper."

Granted, one Google win over Microsoft doesn't necessarily signal a trend. But the win is significant for Google, nonetheless. It becomes even more noteworthy considering that the customer is a local government, a market which has traditionally been slow to embrace the latest technologies.

If DC's willingness to abandon Microsoft Office indicates that Google Apps' user base has truly moved beyond bleeding-edge adopters, this could mark the beginning of a very interesting trend.

In Part 2 of this story, we reveal some of Zoho's cookbook.

At the Web 2.0 Expo in New York last week, Jason Fried of 37 Signals, another company that has done well by defying conventional wisdom, advised entrepreneurs to "follow the chefs". He meant that great Chefs give away their recipes. That just makes you want to come to their restaurants even more. Particularly if the recipe looks complex. And Zoho's looks complex.

So I hope they won't mind me giving out the recipe they revealed when I met with Raju Vegesna, one of their founders, last week. I noted 3 major ingredients:

1. New ways of competing for talent

2. A related cash cow business

3. Pragmatic, non dogmatic approach to winning business

New Ways of Competing for Talent

If I had to select one "secret sauce" in Zoho's recipe, it would be how they recruit. Zoho (with parent company, Adventnet) has 700 developers. All the developers are in India, specifically Chennai.

India is a ridiculously competitive market for developer talent currently. I see parallels with Silicon Valley in 1999, when average developers got inflated expectations and inflated paychecks. Attrition is problem # 1.

Developers see their career path as managing other developers. Your mojo is based on how many people you manage. Managing 1,000 makes you ten times better than managing 100 and so on. This is the reverse of America where a developer will drop custom service work as soon as it is possible to work on a product.

This is a terrible environment for a product company to compete for talent. How does Zoho compete for talent in this market?

1. Hire from school. Yes, school, not college. So they don't compete to hire from final year of College or in the even more hot market of developers with a few years experience. Great code is typically written by young people - which explains a lot of the "college drop out makes $ billions" stories in America.

2. Pay one year of college fees. This is a salary, not a loan, with no strings attached. According to Raju, 90% join Zoho at the end of that year, but there is no obligation. This gives Zoho an edge with the brightest at school as they have an unusual offer.

Zoho's philosophy is that 4 years college when you are young is not right for many people. Better to have life-long learning but get real world experience early and get some cash while you are at it. This gets a big "yes" from parents paying college fees!

Zoho have their own Zoho University. This is not uncommon for big employers in India. It is a necessary complement to hiring early.

Related cash cow

Zoho has a related cash cow business that enable them to fund Zoho. This is not unlike Google. Microsoft's problem is that their cash cow - Office - is the one that both Google and Zoho are going after. That gives them one nasty Innovator's Dilemma.

Zoho's initial cash cow business is selling network management tools. This has been profitable for 12 years. Zoho itself is due to be profitable next year.

The network management tools business is doing the same as Zoho - products at least as good as the competition for a fraction of the price. This business also gives Zoho a capability for running large data centers, which is a core competency for a SaaS business.

Pragmatic, Non Dogmatic Approach to Winning Business

By all accounts, Zoho won GE's business in head to head competition with Google. GE wanted to cut cost and enable collaboration, which meant Microsoft was less of a contender. Google was the obvious "you never got fired for choosing" winner. Why did GE choose Zoho? There are two likely reasons:

1. Zoho allowed GE to run the software in their own data centers. GE has the economies of scale to run their own data centers and clearly prize the control that this enables. Zoho specified the hardware, but GE bought it and deployed it. Is a "Zoho Appliance" far behind?

2. Visual Basic Scripts in Spreadsheets. Current tech orthodoxy frowns on VB, but if you have thousands of existing Excel spreadsheets running VB that would be a show-stopper.

At Web 2.0 Expo in New York this week I met up with Raju Vegesna, one of Zoho's founders, to find out how they're succeeding despite the odds.

Everything about this story is improbable. And gloriously old fashioned. When I met Raju Vegesna, I kept on thinking this was some kind of time warp. Zoho has simply ignored much of the conventional wisdom. Consider:

1. Product breadth. Look at the range of products they sell. This defies the conventional wisdom that you should focus on one thing only. When I put that to Raju, he replied that the 'one thing' model "works if you are building to sell the company". That's right. The classic model is to build one product that slots right into the acquirer's portfolio. In Web 2.0, when speed is everything, even products take too long and so you just built features. The hierarchy is: features go into products and products go into companies. But Zoho is clearly building a company.

2. Building to last. Every startup says they are build to last, publicly. Nobody advertises that they are building to flip. But Zoho looks like they really are building to last. They don't have VCs on board with an exit compulsion. Nor do they need VCs. They can finance internally and make money personally the old-fashioned way, from dividends, knowing their equity value is also building every day.

3. They run their own data centers and buy all their servers. No, they don't use Amazon Web Services or even conventional hosting vendors. They run 1,000 servers in two data centers, one in California and the other in New Jersey. In a SaaS world where performance/reliability are differentiators, running data centers is a core competency. They have the cash flow to buy their own servers!

4. They charge real money for their software, with no advertising. But the price is really low. This is like WalMart. This is like Basecamp, reasonable prices for great software. That is so boring! In branded consumer goods, buying expensive conveys status. In software, buying expensive when there is an equivalent at lower cost, simply conveys a willingness to burn money.

A Serious Contender

Do you still think that Zoho cannot possibly be a serious contender? GE, after a vigorous evaluation including Google and Microsoft, selected Zoho. That is 400,000 desktops up for grabs worldwide. GE is a master at taking costs out of established processes, they do it relentlessly and continuously and they know how to evaluate and manage the risk of working with start-ups. Where GE break a trail, others are likely to follow. You can view a GE presentation about this deal here, from the recent Office 2.0 conference:

This is Part 1. In the follow-up post, Zoho Part 2: The Cookbook, we look at how Zoho works in more detail.

Image from Wikipedia

We think this has the potential to break open the Web Office market, because up till now nobody has done rich media for the enterprise as an easy to use browser-based package. Google Video for Business manages to do this, mostly because of YouTube's influence.

Matt Glotzbach, Product Management Director of Google Enterprise, described Google Video for Business to us as "a whole new way of working". He claimed that rich media will be incorporated into traditional email-based business communication like never before. Google sees collaboration as "the 'soul' of Google Apps" and video as the next big step in rich collaboration. Cloud computing, said Glotzbach, is what makes this possible.

How it Works: The YouTube Factor

Google Video for business unsurprisingly has many aspects of YouTube in it. You can easily upload videos, add descriptions and tags, share videos with the click of a button, and embed them in Google Sites and other internal webpages. You can also embed videos as 'gadgets' (aka widgets) in any site that accepts Google Gadgets - e.g. Google Spreadsheets. The gadgets have the same security as web pages, meaning that only authorized users can view it no matter where it is embedded.

Other features borrowed from YouTube include search (of course, but in this case only for videos to which users have access), ability to view high-quality video, ratings, comments and additional tags, ability to download videos for viewing offline or on portable devices.

Google Video for business uses the same infrastructure that powers YouTube. In our call Google noted that YouTube currently has 13hrs of video uploaded per minute! It streams hundreds of millions videos per day. So obviously this infrastructure is robust and can easily add a few more enterprise videos to the mix.

The one big difference though between Google Video for business and YouTube, is security. In the enterprise, security is a key feature.

Google Apps Ramping Up

As indicated by this week's ReadWriteWeb poll, where right now 21% of respondants say they use Google Docs as their main word processing tool (up from 11% the same time last year), Google Apps is exhibiting strong growth and increasing acceptance as an office suite. Google itself says that more than 500,000 businesses use Google Apps, with more than 3,000 businesses signing up every day. It says Apps has more than 10 million active users and "hundreds of thousands" of paid users.

Google Apps includes Gmail, Google Talk (instant messaging), Google Calendar, Google Docs, Google Sites, Start Page for creating a customizable homepage, and now Google Video for business.

Note: as well as for enterprise, Google says that a version for Google Apps Education Edition customers that allows faculty and staff to upload and share videos with students will be available on September 8 for free trial until March 9, 2009, at which point it will cost $10 per user, per year.

Google Apps vs SharePoint

When Google Sites launched at the end of February, we threw some cold water on the claim that Google Sites would compete with Microsoft SharePoint. ReadWriteWeb's Sarah Perez wrote that "for the small to medium size business, you could say that Google makes a strong offering as a more affordable alternative to Microsoft Servers and applications. However, it's a big jump from offering tools to a mom-and-pop as compared with a global, Fortune 500 company".

But with Google Video for business, Google has taken another step towards tackling the big enterprise market. It may well be a significant step, because with the consumerization of the enterprise these large organizations are getting used to using tools such as YouTube.

Indeed perhaps this YouTube video was one of the inspirations for the Google Video for business team ;-)

Competitive Landscape for Enterprise Video: Microsoft, Adobe, Veodia

Google says that there are video solutions for enterprises out there, but that they are "too complex and expensive for all but the largest enterprises". They also claim that competing products require proprietary hardware and software, and are difficult to maintain and use. No specific names were mentioned, but a recent article by Dan Rayburn explains how Microsoft and Adobe are both active in video solutions for enterprise:

"Historically, Microsoft's (MSFT) Windows Media technologies have always dominated the enterprise market for multiple reasons, the biggest being that the WM Player was bundled into the OS and the server is cheap to deploy. And while I think Microsoft still has the majority share of the enterprise market, Adobe (ADBE) continues to get more aggressive in targeting IT decision makers inside enterprise organizations.

With Adobe making the licensing costs for FMS3 a lot cheaper than they use to be, and the fact that live Flash is now considered stable in FMS3, I am beginning to hear from more enterprise customers who are now evaluating Flash."

We mentioned SharePoint above, which allows people to upload video - but there's not much else video functionality. Microsoft also has RoundTable, a video-conferencing solution, as well as Live Meeting and Office Communications Server (which does video).

So clearly Google Video for Business targets both Microsoft and Adobe, as well as other big vendors such as Cisco. Google's solution does appear to be much easier to use, just like YouTube was/is for consumers. Note however that it is not a live video solution, so it can't be used for video conferencing.

Google told us that an early stage startup called Veodia is the only startup they're aware of doing SaaS video for businesses. We looked at Veodia back in June - check out the video below for more details. If any RWW readers know of other startups doing this, please mention in the comments.

Conclusion

Up till now enterprises have been using mostly person-to-person and text-based communication to collaborate. Video hasn't taken off in a big way, perhaps because enterprise video solutions haven't been packaged as easy-to-use consumer-like tools. Not to mention network restrictions. That's not to say video hasn't been used at all - I recall it being used a fair amount back in 2000-01 on the enterprise intranet I was in charge of at the time. However perhaps 2008 is the time when it will ramp up.

No company is better placed than Google to exploit this - it owns the world's most popular consumer online video app (YouTube) and has rapidly become the leading Web Office vendor. It's even started nipping at Microsoft's heels in office software.

There's still a long way for Google to go to catch up to Microsoft in the enterprise software world, but we think that Google Video for business will get them another couple of steps closer. What do you think?

Update #2: Google has now posted an entry on the Official Gmail blog, explaining that the outage was caused "by a temporary outage in our contacts system that was preventing Gmail from loading properly."

Twitter Keeps Humming Along

As quite a few users on Twitter and FriendFeed pointed out, maybe even more amazing than Gmail suffering a prolonged downtime was the fact that Twitter coped with the sudden spike in traffic very well. That, together with the fact that Twitter has already been quite stable lately, is a promising sign for a service that often went down at random times.

Today, at the height of the outage, Twitter's search returned close to 1000 updates with the word 'gmail' in it within less than five minutes.

Judging from the change in business models, however, it would seem that Calgoo couldn't attract enough paying users. It's interesting that Calgoo couldn't make its 'freemium' model of free basic services and paid advanced feature work.

According to Calgoo, it is making its products available for free in order to "move to in-calendar advertising business models." While Calgoo hasn't outlined what these in-calendar ads would look like, this move is also consistent with the overall trend on the web towards advertising financed products.

As Svetlana Gladkova also points out in this context, users have simply become so accustomed to not paying for anything on the web that even charging for premium features is becoming very difficult for some companies. Calgoo must have surely felt the same pressure. In the short run, this is probably to the users' advantage.

Microsoft Online Services is scheduled to be released out of beta at some point in the second half of 2008.

The Deskless Worker Suite, as Mary Jo Foley notes, seems to be geared towards users who might otherwise be tempted to move to Google Docs or Zoho's online office suite. Microsoft is aiming this product at workers who only spend a small part of their days at a computer, but still need access to email and and other basic online services.

As Microsoft is moving more and more services into the cloud, the big question of when (and if) Microsoft will start offering the core components of its office suite like Word and Excel online as well, still remains. For now, Microsoft seems content to offer products like Office Live Workspace that provides online storage in the cloud, but as pressure from Google and others increases, Microsoft will surely have to counter these offerings with a more fully featured web based office suite.