For Google the outlook is bright: It will succeed in enterprise, just not quite yet. Despite numerous customer wins and a surge of momentum in cloud-based productivity apps, the company, for now, is far from emerging victorious, partly because of its methodical approach to the enterprise, and partly because of enterprises’ cautious approach to Google — two awkward dance partners, eyeing each other from across the room.
Google is competing for enterprise relevance in several key categories: Office productivity applications, including e-mail, personal cloud, corporate back-end cloud services, and social. Google is just starting out with Google Compute Engine, its cloud infrastructure service. Google Drive, the company’s personal cloud offering, and Google Plus, its social media product, are both still pining for consumer attention, much less enterprise relevance. But even here, there’s promise; more on these in a future post.
The current battle is really primarily between Google Apps for Business and Microsoft Office (both on premises and in the cloud, with Office 365 for Business). Gartner estimates that Microsoft has 90 percent market share on PCs, but the analyst firm also says that Google had at least 33 percent of the cloud-office market by the end of 2012. If Google garnered half of that market, according to Gartner’s 2013 estimates, it would own a whopping 25 million customers . . . but still only about 12 percent of the total office market.
Microsoft has been busy bolstering its Office 365 offering, and some CIOs tell me that the software giant has been selling them hard lately. Just today Microsoft announced another Office 365 win — the city of San Jose — in its duel with Google. In other words, Microsoft isn’t standing still.
There’s another battlefront, too: In addition to its surprising ascension on the cloud side, Google’s purchase of QuickOffice, which runs across a variety of mobile devices, could give it a significant leg up, especially since in light of the negative reviews Microsoft garnered for Office on the iPhone.
Amit Singh, Google’s enterprise president, claims that 58 percent of Fortune 500 companies are using paid Google products. He admits this is only modest success, but he’s confident that companies are shifting course.
In our conversation Singh kept returning to two key themes: Google’s mission is to make its products simple, useful, accessible and beautiful; and as consumers bring technology to work, and mobile becomes a primary computing model, it needs to deliver these user experiences at scale.
Google Apps for Business includes Gmail, Docs, Sheets, Slides and Google Drive (personal cloud) at $50 per user; IT also gets administrative control over the deployment. This offering has been around since 2007, and is used by more than 5 million businesses, according to Google. Take, for example, Dan Petlon, CIO of Enterasys, who says his company’s move to Gmail and Google Calendar was sold internally as a way to cut costs.
Enterasys’ move from Microsoft Exchange 2007 to Exchange 2010 required re-architecting some of the back-end infrastructure and took the equivalent of two man-years from planning to implementation. The notion of doing this every few years, “all for six new user-facing features nobody really noticed” was unappealing, he says. What made the move easier was the fact that Enterasys has dozens of cloud-based multitenant applications already running parts of the business (he showed me a diagram of all of his cloud integrations and he wasn’t kidding! demand planning, expense management, procurement, talent management, CRM, and more).
But the main benefit, Petlon says, has been the pace of innovation. Enterasys is seeing an entirely new world of collaboration, across time zones, and in real time. In various departments — Quality Assurance is one he names specifically — the vast majority of users are originating all content in Google Apps. The reason is pretty simple: A Google document of any type begins in the cloud, and because of that, the early design goal was to allow users to invite others to the document, where they could collaborate simultaneously. It practically eliminates the need for things like version control and change tracking.
The shift at Enterasys didn’t happen overnight, however, and it’s still not completely done. Petlon didn’t want end users to perceive that this new technology was being jammed down their throats, so nothing was taken away and growth toward Google Apps was organic. If users wanted to use an Outlook client to access the Gmail back end, they could. Two years in now Petlon estimates that 90 percent or more users are happy Googlers. Collaboration using Google Apps probably doubles every month, he estimates, and having to use Microsoft Word documents with “track changes” turned on feels as old school as getting a fax.
Tim Smith, Vice President of Digital at Imagination, a content marketing agency, went through a similar process. Google Apps, and in particular Gmail, fixed an immediate pain: help desk tickets from Microsoft Outlook on Office 365. He estimates that his 100-person company saved $24,000 immediately just from reducing that pain, and it will save even more money over time with other infrastructure and service savings.
But all of these wonderful benefits can’t erase years of entrenched software paradigms. For Google, success certainly means eating into Microsoft’s 90 percent market share. That will take a shift in enterprise acceptance. To many, that seems like a fait accompli. For instance, in a recent response to a story I wrote about Microsoft’s strategy, @SarahPalinSpecc offered the following comment:
Google is a $300 Billion dollar company which is larger than Microsoft but the difference is that Microsoft is OLD. An old person is taking a risk by walking up the stairs and this is the difference. Microsoft is so hardened at this point that everything they do is a risk and most of what they do is a failure. Just look at poor Nokia whose decline doubled in rate when they partnered with Microsoft. Google is a young, agile, energetic company as is Apple. We need for the old to step aside gracefully without all the flatulence so that younger, agile and energetic companies can lead the way. Nobody trusts Grandpa Softy anymore since the senility has set in.
Here in the real world, though, Google is actually a $50+ billion company (based on annual revenue). That’s what the pesky Google 2012 income statement says, anyway. Microsoft is a $70+ billion company (and its market cap hovers around $300 billion). Here in the real world we like to think that what a company actually makes from its customers holds some weight. To put it in the language of the young: These facts can’t be willed away with a Candy Crush lollipop hammer. (If you’re older than 25, you may have to look that one up.)
Now, I’m nobody’s apologist, and certainly not Microsoft’s. Google’s move to hire Singh is promising: He spent 20 years at Oracle (Ms. Palin: that’s a big company whose databases and software underpin a great deal of the business processes that fuel the American corporate economy — another flatulent bundle of senility standing in the way of progress you might say).
But Google faces a host of obstacles. Nearly every enterprise will be challenged by the ubiquity of Microsoft Excel. It isn’t that Excel is simply a repository for simple data, or even complex data, because Google Spreadsheet has improved in recent years: it can interpret Excel pivot tables; Imagination’s Smith is pulling in data from its Microsoft Great Plains accounting software; and Google Docs includes built in JDBC drivers — touche, Ms. Palin! The challenge is that Excel has become the de facto business intelligence tool.
Even the Google-converted CIOs I spoke with admitted that there might be departments (finance, for example) that never abandon Excel. Additions like Power BI for Office 365 let normal humans analyze data in powerful and interesting ways in MIcrosoft Excel. This includes 3-D visualizations that can be overlayed geospatially on Bing Maps.
Another challenge: For Google, the enterprise is an afterthought by design. Google acknowledges that its technology finds its way in after simplicity and scale are achieved. You’re not going to see a product start life as an enterprise product. There isn’t likely to be a Google Glass or self-driving car for the enterprise.
Singh knows from his days at Oracle that IT needs a level of administrative control, that it needs enterprise class support, that it needs an integration partner ecosystem and SLAs. Those facets haven’t always been central at Google. A former Google executive once told me that in response to early customer-driven requests to add enterprise-level support for businesses, one of Google’s founders instead pushed the enterprise team to just make the products simpler to eliminate the necessity of support.
This is, I’m told, no longer the philosophy, because while it might sound like heaven to people like Ms. Palin — and maybe it should to everyone — it’s just not how business is done in the real world.