It seems there has been a lot of discussion lately about the cloud, and questions of a looming shift in computing. I find the most interesting discussion to be the one that surrounds Internet applications that have traditionally been considered desktop apps. If consumers move toward accessing traditional software in this way, it will signify a major shift. Our entire PC experience could change. But it is hard to picture this future with so few real world examples at present. If a shift happens, when will it be? Five years? Twenty years? Now? Since Google Docs & Spreadsheets is embarking on its 2 year anniversary, I thought it would be a good time to take a look at its progress in this context.
Over the past year, Google has enjoyed a very solid 60% increase in U.S. traffic to Docs & Spreadsheets, going from 2 Million Unique Visitors to either Docs or Spreadsheets in September 2007, to 3.2 Million (1.3% of the Active Digital Media Universe) this September.
To put this in perspective, Google’s growth can be reasonably compared to high performers such as Pandora (75%), Drudge Report (66%), and Zillow (57%). On the other hand, it is certainly not on the scale of 2008 high-flyer Hulu (zero to 7.3 Million in one year), or Twitter (614% YOY growth).
If we take a look at the competitive set, Google Docs & Spreadsheets is pulling away from closest online rival Zoho, which had less than half a million US visitors in September. However, I don’t think it is time for Microsoft to be unduly worried. 86 million active Word and Excel users in the US puts Google’s 3.2 Million into perspective, especially when you consider that Word and Excel use is itself growing – up 10% YOY from September 2007.
In terms of engagement, people spent an average of 5 minutes using Google Docs & Spreadsheets over the month of September, compared to those who used Word & Excel, who averaged over 4 hours. Steve Ballmer has publicly dismissed Google Docs and apps, and has said in the past that consumers only use it to try it. On the surface, this usage data would indicate that he’s right. But I don’t think that reflects the entire story.
I took a look at the audience usage overlap and found that an astounding 80% of Google Docs & Spreadsheet users also used Word or Excel during the same month. This would imply that people aren’t switching away from office, but using Google as a complement. Perhaps they use Word and Excel for creating and editing documents and then go to Google for sharing, collaborating or backing them up. With Microsoft’s launch of online versions of its Office applications, it will be interesting to see if Google’s traffic continues to grow.
There are certainly challenges for both companies in the battle for productivity software supremacy. They’ll both need to add the features that users are currently supplementing with both products. Perhaps the challenge for Google is greater, as widespread usage also requires a shift in the mindset of the consumer, who typically still sees the internet (and the browser) as a place for visiting websites, not running software. I think we all see this shift coming, but we aren’t clear on when, or what it will look like. In the meantime, it will be interesting to keep an eye on, and I think we will all benefit with better products to use.