Small and medium sized enterprises (SMEs) have reacted eagerly to the launch of Google Apps Premier Edition, IT analysts have said.
The paid-for premium version of Google's software as a service launched last week, offering a business package plus ten gigabytes of memory per user for £26 a month.
Larger corporations have so far proved reluctant to sign up for the service but smaller businesses without the budgets to invest in infrastructure have expressed interest.
"I think it stands a good chance of eroding Microsoft's customer base," director of information at the Highways Agency Denise Plumpton told Computer Weekly.
She added that most larger firms have already made substantial investments in Microsoft Office and this mean that they will be slow to switch over.
"That means that even given Google's relatively low licence costs, the business case for migration will not be easily made," added Ms Plumpton.
