With Apps, Google is championing the popular software-as-a-service (SaaS) model, in which vendors host applications in their data centers and deliver them via the Internet. The SaaS approach is seen by its backers as the future of software, which has traditionally been installed by customers on their own facilities and hardware.

Delivering applications from the Internet "cloud" reduces the effort and cost customers have to invest in installing and maintaining software. In addition, these Web-hosted applications are designed to promote and simplify how co-workers share and collaborate, since documents reside on a central server and not on individual PCs.

However, concerns exist about the security of hosting software and data in a vendor data center and the loss of control over application performance and availability when vendor servers crash. Another issue with hosted applications is accessing them without an Internet connection, something Google is addressing with its Gears browser plug-in.

2nd Wind Exercise Equipment adopted Google Apps in February for its roughly 330 employees when it faced a Microsoft Exchange upgrade that also involved buying new hardware and would have cost around US$225,000.

After researching Apps Premier, the retailer concluded that the Google suite met its requirements at a fraction of the cost of the Exchange upgrade, said Tom Kelly, 2nd Wind's chief financial officer and CIO. The company has also cut down significantly on its Microsoft Office licenses.

The company is pleased with Apps Premier, and more so now with the video service, which it had a chance to test in recent months. It is using it for training and corporate communications, and was also able to move its TV commercials from its former video storage provider to the Google suite, eliminating a US$12,000-per-year expense, Kelly said.

The quality of the video streaming has been very good. "It's very quick, very smooth. We've had no buffering issues at all," he said.

Nucleus Research analyst Rebecca Wettemann said the video service is "a potentially very powerful business tool, particularly from the training perspective."

It will be in Google's best interest to evangelize among Apps Premier administrators the various scenarios and uses in which creating and uploading a video can be useful, Wettemann said.

"There are many cases in the business environment where, if I could shoot a quick little video to show people something, I could get my point across much more effectively than with e-mail or a phone conversation," she said.