Economy 2009: Cloud Computing may be Google’s only hope?

Google charges a $50 annual fee per user for its premium software service, meaning the vendors will have to pay the Mountain View-based company $40 per user. Girouard suspects many merchants will maintain Google’s $50 base price to help defray their own overhead and shore up profit margins during hard times.

To increase the pool of potential customers for the software, Google for the first time is capping the number of people who can use a less sophisticated, free version of the applications at 50 individuals per business.

The new limit doesn’t apply to the thousands of mostly small and medium-sized companies that have already signed up for free software programs.

Schools and nonprofit organizations will still have unlimited access to the free version of Google’s software programs, which are piped over Internet connections and run in a Web browser.

The delivery method, dubbed “cloud computing,” is a departure from the long-standing practice of installing programs directly on individual computers owned by the company that needs the applications to help run its business.

Google is betting cloud computing can help lessen its dependence on online advertising, which accounts for about 97 percent of its more than $20 billion in annual revenue.

With the expansion into business software, Google also hopes to siphon some corporate customers away from rival Microsoft Corp., which depends on its suite of office software products for a huge chunk of its profits.

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