Google Apps passes two million customers

Google (GOOG) says it now has two million customers using its Apps products. The online software offers many of the features of Microsoft (MSFT) Windows, but operates on Google's servers instead of on the user's PC.

Although the Apps client base is growing, it may not be bringing in much revenue for the search giant. According toReuters, "Those include both larger businesses that pay $50 a year per user for Apps, as well as firms with fewer than 50 employees that get the software for free."

Because the Apps products only do a small portion of what Windows is capable of, the odds that Google will really compete with the world's largest software company are still modest. Microsoft recently provided embarrassing proof of why server-side products are flawed. It lost, at least temporarily, data from thousands of T-Mobile Sidekick handset clients. This debacle was caused by issues with the servers that Microsoft uses to store the T-Mobile customer data.

Microsoft's Sidekick problem shows why customers who store information on servers and not their devices are at risk for having catastrophic losses of data. The incident hurt Microsoft's image, but it also pointed to a vulnerability in Google's server-side Apps product. Google's G-Mail product has been down several times in the last few weeks. What happens if its Apps servers have a major glitch and Apps customers can't access their data? Google's image could take the same beating that Microsoft's did.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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