Almost 1 year ago Eric Schmidt had denied Google's plans to enter the Office Software market owned by Microsoft. "Office is not the business we're in" Schmidt had told journalists in NY. Now Google has launched a Premium Edition of Google Apps.
Google App's is targeting small offices, enterprises, schools, and Groups. Its priced at $ 50 per worker per year (v/s MS Office at around $ 500). I believe Google is far from competing with Microsoft in the Apps market as I had stated in my blog post last year at the time of Writely acquisition by Google.
Also, Google will have slow uptake in organizations who dont wish its employees to store company data on Google's servers. There are clear privacy issues here.
Finally, Google is a big headache for Microsoft. No matter how small a step Google Apps is.
