The announcement of Google to offer Google Premier Apps, a suite of on-demand Google services such as its calendar, email, IM, VOIP, docs and spreadsheets bundled for $50/year. A free version targeted at educational institutions — Google Apps Education Edition — offers the same features as the premier edition except for the storage size. There is also the free Google Apps Standard Edition with less features.

This is not only starting to seriously compete with Microsoft but has the potential to tip the way we all operate. Salesforce.com's success and growing adoption by the nonprofit market is already showing that the on-demand nonprofit working in a hosted environment for critical business functions is here to stay. This true especially for office productivity, communications, and other core functions, such as CRM.

This has implications on a number of levels. One is certainly cost and staffing levels. The New York Times today has a rough cost estimate: ".. a business may spend about $80,000 on a systems administrator to manage e-mail and desktop office software. For the same amount of money, Google Apps allows a business to support 1,600 users, she noted. Simply in terms of staffing, “this may be a better proposition even if Microsoft were free..” The move towards on-demand software as a service and lowered costs and lesser need for staff expertise means that nonprofits have the potential to be on a more even playing field with even smaller organizations able to have sophisticated core IT systems in place. The usability of apps like Google and Salesforce are unparalleled and the support is remarkable -- Google offers part-time telephone support as well (and I tried it, someone answers). It has implications for data integration and shifts the paradigm from in-house integration on a much greater reliance on well-developed and documented APIs. It has workforce implications -- woe the network admins whose work environment may just be changing in the next few years. The trend towards hosted apps has security and privacy implications as well. And it has implications for software vendors and providers in the nonprofit market; some of which we have already seen with recent consolidations. I have no doubt that the market will continue to shake out more as these trends continue.Altogether, I believe that SaaS for essential business functions that nonprofits and for-profits alike share is a welcome trend. It removes significant barriers for nonprofits in simply running basic operations - especially small orgs which constitute the vast majority of the nonprofit sector. After all, who else but Google can afford 24-hour telephone support for We will be focusing on the on-demand nonprofit with a number of programs in the next few months and keep a close eye on what this means for nonprofits in terms of cost and efficiency.