Google is introducing Google Spreadsheets.

Mike asks: why? His view is that most spreadsheet users will be unwilling to put spreadsheet data onto a server they don’t control out on the Internet. I think there certainly are some of these people, but I don’t think this is a major problem for Google for several reasons.

First, most people don’t care about the implications of Internet storage. The runaway success of web-based email tools (Gmail, Yahoo, Hotmail, etc.) makes this very clear. I don’t know about you, but I routinely receive sensitive information in my email, or certainly information that could be used to access sensitive information. It’s clear people will trade this security hit — if they even realize it exists — for convenience.

Second, I assert without supporting data that most spreadsheets aren’t in any way sensitive. No one would have gained anything by hacking Google Spreadsheets and viewing our wedding plan last year, for example. Most spreadsheets, even the ones with financial data, are wholly mundane and of use or value only to those who create and reference them. Even in a world of perfectly sophisticated security-minded consumers, this leaves an enormous volume of spreadsheet applications that are perfect for Google.

Third, the killer app here is sharing. The tools that people like 37 Signals are creating aren’t better than standalone desktop apps at what they do, but they’re good enough that people use them because doing so makes sharing the information trivial. “Collaborative spreadsheeting” in an office or between offices is an activity fraught with peril; the usual result is several competing versions all sitting in everyone’s email attachment folder. I know Mrs. Heathen and I fought this issue with our wedding data, and I know a certain theater company that would love to be able to share a single sheet without constantly locking people out. Google can address this as a baseline quality of Spreadsheets, and in doing so create a value that Microsoft cannot emulate at all.

Now, obviously Google can’t possibly be aiming to eliminate Excel. It really is a good program; it’s perhaps the best thing to ever come out of Microsoft. However, it’s become almost required, since there are vanishingly few alternatives that are visible to normal people (OpenOffice doesn’t count), and it’s expensive. Casual spreadsheet use probably generates more sales than real number crunching, and that’s the market Google will target here. If you don’t have to buy Office after all — alternatives to Word are legion, and only the marketing droids need PowerPoint — how much money per seat do you save?