Google Guns for Microsoft Live

There’s no longer any doubt that Google  intends to carve itself a niche on the desktop and beyond.

Google announced today that it is offering hosted applications to rival Microsoft Live hosted software for small- and medium-sized businesses (SMBs).

Google also hinted that it will offer other hosted applications to rival Microsoft’s  suite of productivity solutions, such as Word, Excel and PowerPoint, at the higher end of the SMB space.

The Mountain View, Calif.-based company today launched Google Apps for Your Domain, a host of tools for communicating and collaborating in the enterprise, including Gmail Web e-mail, instant messaging, voice calling and collaborative calendaring.

The service also includes Web page design, publishing and hosting via Google Page Creator.

The standard package also includes 2 gigabytes of e-mail storage for each user, customization tools and help for administrators via e-mail or an online help center.

It is available today as a beta product free of charge to domain administrators and end users.

Google spokesperson Courtney Hohne told internetnews.com that companies can add as many users as they wish.

She also said the company will expand the service “soon” to encompass more features and services.

Google has not yet revealed the cost of the premium package.

The service is clearly aimed at SMBs with limited resources for managing an IT infrastructure.

“A hosted service… is a welcome relief for many small business owners and IT staffers,” Dave Girouard, vice president and general manager of Google’s enterprise division said in a statement.

Yankee Group analyst Gary Chen told internetnews.com that while the current offering is more suited to the very small end of the SMB market, Google is clearly aiming higher.

“If they’re calling this version the standard edition, the premium edition will clearly have more functionality to appeal to the higher end of the SMB market,” he said.

Laurie McCabe, vice president of SMB insights and business solutions for AMI-Partners, a New York-based consulting firm, agreed that the standard offering will appeal mostly to the smaller end of the market.

But she predicted that the offering will generate a lot of interest.

“A lot of small businesses that are already Internet savvy are going to be checking this out,” she told internetnews.com.

Google has offered glimpses of its plans to corral the market for Web-based services over the past several months, launching an array of on-line productivity and communication tools.

Those include a spreadsheet application and a calendar, as well as Writely, a Web-based word processing tool.

Google pulled Writely off the Web immediately after acquiring its parent company, but has recently re-released it for beta testing.

Google has also been aggressive in the enterprise search space, launching an enterprise version of OneBox as a way of allowing business users greater access to information contained in various databases spread throughout the enterprise.

Last year, Google launched Google Mini in order to court SMBs.

Think Microsoft is worried?

To date, the Redmond, Wash., software giant has been dismissive of Google’s moves in this direction, but the stakes are high.

According to Chris Hazelton, an analyst at IDC who follows the SMB market, there are more than 8 million small businesses in the United States alone.

According to its most recent filings, the Redmond, Wash.-based software vendor derives a little over a quarter of its $44.3 billion in annual revenues from the “information worker” segment, which includes Office and Office Live.