Google software wins big endorsement

SAN FRANCISCO — Technology consultancy Capgemini will begin recommending Google's online suite of office software to its corporate customers, bolstering the Internet search leader's effort to drum up more sales to big businesses.

The partnership being announced today represents the first time one of the world's top technology-consulting services has embraced Google's software bundle, which includes e-mail, word processing, spreadsheets and calendar management.

Paris-based Capgemini influences the type of software used on more than 1 million personal computers in companies worldwide.

Its major customers include drug maker Eli Lilly and accounting firm PricewaterhouseCoopers.

Capgemini will continue to support business software made by other vendors, including Microsoft and IBM, the dominant forces in a field that Google only recently entered.

Hoping to diversify beyond the online advertising market that generates most of its revenue, Mountain View, Calif.-based Google in February began selling a souped-up version of its office applications for a $50 annual fee per user.

While the low cost has appealed to small businesses and universities operating on tight budgets, Google has had a tougher time winning over large companies, a market segment more likely to worry about other key issues besides price.

The security, reliability and performance of technology also sway corporate buying decisions.

Google's software package will gain greater credibility now that Capgemini has agreed to support the applications and help integrate them, predicted Forrester Research analyst Ray Wang.

Capgemini's involvement also will help more businesses better understand when it makes sense to subscribe to Google's applications instead of paying higher licensing and maintenance fees for similar products from Microsoft, IBM and other vendors, said Ovum analyst Tom Kucharvy.

Those competing programs typically are on discs that directly install the coding on a hard drive, while Google's applications can be accessed from any computer with an Internet connection.

Microsoft and other major software players are investing billions to strengthen their presence in the world of Internet services.

Meanwhile, Google hasn't made much of a dent in the worldwide business-software market yet.

The company says hundreds of thousands of businesses use its applications, but most of those appear to be relying on a free version introduced last year.

Google collected $70 million from sales of software licenses and other services during the first half of the year.

That accounted for less than 1 percent of the company's revenue during the period.