Last year, while I was still working for CNET, I was given the opportunity to sit down for a video interview with Rajen Sheth who, within Google, is regarded as the inventor of Google Apps. A few weeks ago, I was back on Google's campus and had an opportunity to catch up with Sheth for an update, this time sans the video crew. The timing of the interview was serendipitously relevant given last week's announcements that Microsoft has both Office Web, a Web-based version of Office, and Azure, a platform as a service (PaaS), in the works.The interview lasted about 45 minutes, which is why I'm going to break it up into a few parts for easier digestion. In this first part, Sheth catches us up on what has changed in Google Apps since last year. I'll save my own analysis and thoughts for a separate post. But, if there's one thing that really strikes me as being an important take-away from this interview in the context of Microsoft's announcements, it's that Microsoft will have to decide if it's going to march to the beat of its own legacy structuring of office applications (clear lines of division between collaborative tools, document tools, e-mail, etc.) or if it's going to respond to Google and others (the way it appears to be responding to the threat of Web apps) with a drastically restructured and integrated set of product offerings.

I raise this point because, in this first segment, Sheth talks about how the first wave of Google App's users were mostly interested in the App's version of Google Web-based e-mail service Gmail and how that interest is starting to shift toward an appreciation of how collaboration is so deeply baked-in to Google Apps. Mentioning other parts of the Google Apps suite such as Google Sites and Video for Business, Sheth & Co. are practically at the point where e-mail is now an afterthought and he and the team are onto other innovations.

Meanwhile, over at Microsoft, e-mail serving always has been a completely and distinctly separate offering from the core Office suite (although certain editions of the suite include the Outlook e-mail client). Earlier this year, in what at the time was a pretty major "cloud announcement," Microsoft announced it would be offering Exchange Server on a hosted basis. Additionally, SharePoint has been serving as Microsoft's main play in the area of collaborative connective tissue. Not only does Google not have anything that really corresponds to SharePoint because of the way collaboration is baked right into everything, e-mail is baked completely into Google Apps and shares it's footprint with a range of functionality (e.g., Web hosting, video hosting, etc.) that essentially crosses a wide range of multiple product groups at Microsoft. It remains to be seen just exactly how or if Microsoft will reconcile those organizational boundaries as it finally makes its big Web play.

Meanwhile, here's part I of the interview with Rajen:

DB: A year has passed since we last spoke and now, not a week goes by without cloud computing getting some mention in a mainstream publication like the New York Times. What has changed for you here in the Google Apps group at Google:

RS: From a trend perspective, there are a few things [that have changed]. The first is that there are more and more enterprises that are getting serious about this and this is becoming less of just an idea and we're moving on to actual, real implementations. People are really looking at this, really signing, and really looking to deploy these software as as service applications and cloud-based applications.

The second thing is the infrastructure and the platform and I think that has really started to take shape. Not only for us but for the entire industry: the concept of putting applications in the cloud. And I think we're actually seeing real usage of people using the infrastructure of the cloud and using it to great benefit.

DB: What about Google Apps itself? What has changed in the last year?

RS: For users, kind of piggybacking off of those trends, part of it is maturity. You're seeing in each of these applications more and more and more functionality that just makes the application suite more and more mature. Spreadsheets is always my favorite example.

When we talked last time, there were some really some compelling features within Spreadsheets. If you look at them now, there has been a step change in terms of the user experience, the look and feel, the scalability, the feature set that's there and what you can actually do with it. It has a different [user interface] (UI). It has more capability -- things like Google Gadget support, which can let you extend the capability of spreadsheets through a variety of means.

Then, Google Sites launched, which gave us that hub of collaboration and that's been very successful as well, too. Rather than focusing on documents as kind of the center of collaboration, you can have a site that encapsulates everything and then it fans off to the documents that are most important about a subject. So that's actually been really successful.

Video is another thing that we introduced a product around and put into Google Apps a couple of months ago. [DB's note: See my podcast interview with Google Apps director of product management Matt Glotzbach about the launch of Google's Video for Business]. That's kind of another trend that we're seeing within businesses -- that as it becomes increasingly easier to create a video, more and more people are using that. We've seen that within Google. A lot of us have computers like these [points to DB's MacBook Pro] where there's a camera built right in and so it's actually in some cases a lot easier and a lot more personal for us to do updates via video and post that video and share it with the people that we want [to communicate with] rather than sending an e-mail. So that's another area that we've been pleasantly surprised with.

DB: What about the features and functionality that you've added to Google Apps. Has this led to a noticeable uptick in usage or subscriptions?

RS: It's always tough to tell why people sign on. We've certainly seen a solid trend of sign-ups on Google Apps, ramping up at an accelerated rate in comparison to where we were last year and compared to where we were the year before. We now have over 10 million active users on Google Apps that are business users. So, we've definitely seen solid traction and a solid uptick on Apps and in when we start talking to the various customers, one thing I'm realizing is that people are gravitating to this for a variety of different reasons. For example, if we roll back to a year and a half ago, a lot of people were looking at this for Gmail because a lot of the other [Google Apps services] were fairly new.

Now people are seeing both a clear message and use case there, and a clear collaborative use case. They're seeing the benefits of things like Google Sites bringing in the concept of wikis or user-friendly wikis, blogs, and things like that. They're seeing the concept of Google Docs and Google Spreadsheets and seeing how that can actually change the way that they collaborate. So, we're seeing a filling out of that collaborative use case and video adds to that use case as well, too.

People are using more of the toolset. Granted, even a year and a half ago, people would sign on primarily for Gmail. But then one of the reasons they'd sign on was because of other things in the suite. They'd use it primarily for Gmail, but then start to use the other stuff. And still, we're getting a lot of signups from people using it for Gmail because Gmail has continued to expand [its feature set]. But we're also seeing, even amongst users that are using it for that, they're finding other interesting use cases within their companies for where they can use other things like Google Sites and Google Spreadsheets and Google Docs. We're also now seeing people that are adopting this solely for the collaborative use case.

Next, in Part II of my interview with Google Apps inventor Rajen Sheth: How might Google's recently introduced browser -- Chrome -- add even more polish to Google Apps?