Changes to Google Apps over the coming year will entice more businesses to jump over to the delivery of applications over the internet, says Google CEO Eric Schmidt.
Although the take up of Google Apps is not that big in Australia, Schmidt says it will develop legs and prove a worthy contender to Microsoft's Office suite.
Google Apps is a key component of the company's cloud computing vision where applications data is stored on a network rather than on people's hard drives.
For some businesses, the cloud computing model, in the form of Google Apps, has its strengths and weaknesses, he said.
"We are doing those evaluations now and we are beginning to win them [over]. We know we have more work to do; we know there are features for example that people like that we don't have but we know that our model is so good that people are willing to overcome a fair amount of those limitations. They are willing to take the jump," he said.
"The investment we are doing in Google Apps will make it easier over the coming year...but we have enough large deals in the works that I am quite sure with good infrastructure for broadband, this model is going to work."
But cloud computing is not limited to Google Apps. And nor is it a perfectly reliable model.
In recent months there have been some high profile outages at Amazon's S3 and Blackberry's service in North America.
He gave a 'Googley' response as a solution to these problems: "Better algorithms".
"These are algorithmic errors that were made on servers or services; they are not typically wires that are not working...we work very hard at Google to have multiple levels of redundancies. We are very proud of it," he said.
"Roughly speaking when you talk to Google [Apps] what you are really talking to is a front end and it is trying to make sure bad services don't come in and take our network down. Within the network once you get through that front end everything is replicated and everything is duplicated. We do in fact have outages but there is such failover in our architecture that you don't detect it. "
Schmidt said he was not too worried about the recent problems in service denting people's belief in cloud computing.
"So far I hear frustration. I don't hear about lack of confidence, because the benefits of cloud computing are so much better than the other models."