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Etelos, a provider of open source hosted Web 2.0 applications, has released a beta version of a CRM tool designed to work with Google Apps, a commercial suite of office applications Google introduced last week. The Etelos product is integrated into Google's platform.

The application, called "CRMforGoogle," includes features to customize modules, automate client follow-up, manage tasks, share schedules and manage projects. It also provides contact- and content-management functionality.

The professional and enterprise editions of CRMforGoogle, when they are launched, will include features to share tasks and contacts, customize the client database and incorporate a public blog or Web site.

Missing Pieces

Etelos is basically a bare-bones CRM application with little functionality around service, marketing or contact center operations. In its favor, though, it does address the security issue.

"Enterprise customers will have the ability to select the hosting environment for their application and implement any security measures they see fit," Eric Berto, a marketing specialist for Etelos, wrote in a blog posting. "Personal and professional customers can rest assured as well. The hosting environment their data is stored in is secure. Since the application was built using the Etelos Development Environment and EASE, the English Application Scripting Engine, the data that is transferred is automatically encrypted," he added.

'Consumerization' of the Enterprise

Nevertheless, CRMforGoogle is a significant development -- albeit offered by a third-party vendor. It is indicative of the interest in the market in integrating with Google. The on-demand platform means that firms will be able to introduce, and subsequently upgrade, applications at a much faster pace than in previous years. It took Microsoft years to add CRM functionality to its family of productivity applications.

Already, Avaya and Postini have announced partnerships with Google to develop such functionality as e-mail gateways, enhanced security, Google Calendar synchronization and third-party integration with Google Talk, using Google's APIs (application programming interfaces).

Avaya's partnership with Google will focus at first on integrating its own IP Office product, which targets small and medium-sized businesses, to Google Apps Premiere Edition. Given Google's immense popularity and brand name, analysts expect to see more partnerships and third-party applications introduced in the coming months.

"Etelos has clearly recognized the benefits of integrating CRM with office applications," Rebecca Wettemann, vice president of Nucleus Research, told CRM Buyer. "We'll continue to see offerings in this area both from CRM vendors and from others like Invisible CRM that ease user adoption by blurring the line between desktop applications and CRM," she added.

Etelos has seized upon a trend that is impacting all sectors of the software industry, Yankee Group analyst Sheryl Kingstone told CRM Buyer: the consumerization of enterprise software. Users now are driving software procurement and adoption, she said, adding, "and the users love Google."

Who Loses?

The addition of CRM to Google Apps heightens the risk to Microsoft's dominance on the desktop. Certainly this first iteration of Google Apps, or for that matter, CRMforGoogle, do not match Microsoft's level of functionality. Google Apps, for instance, is missing several important elements in a productivity suite, including presentation or PowerPoint-like capability.

A few more releases by Google Apps -- as well as a release by Google itself of a CRM application -- could change these dynamics especially if Microsoft does not continue to improve its own application.

"Microsoft CRM does have an intuitive user interface, but it will need to make further strides in the integration of Office and CRM -- as well as its on-demand offering -- to effectively compete in this space," Wettemann stated.

There are other CRM providers at risk from a Google CRM offering, Kingstone said. "The ACTs of the world -- single-user, instance-based applications -- and SugarCRM stand to lose market share at some point," she added.