I'm not a Google-hater by any stretch of the imagination. I marvel and am amazed at how they develop (ahem, or buy) services for small businesses. I don't have anything bad to say about their anayltics tool or site optimizer since they're based on some reputable and sound products that have proven themselves in the industry and are perfect for small businesses. Companies like the one I'm employed by can frequently be priced out-of-reach for "mom & pop" organizations who are trying to get smarter online. Kudos to Google for getting these tools into the hands of those who otherwise would be left in the dark.
So in closing, I don't think these free services are a threat to us. The clients we work with are saavy marketers who need a robust, customizable technology with a human touch as their solution.