In November 2013, we published a report laying out what will be the key points of differentiation between Google Apps and Microsoft Office 365 by 2016. At the core of this report is a simple message: The value of these cloud collaboration suites isn't inexpensive email; their value is in their role as an interaction point for your business ecosystem. And at the center of each of these interactions is content of some sort -- contracts, marketing collateral, product specifications, customer records, and more. As more of this content lands in Google Drive and SkyDrive Pro, the market will reward the vendor that makes it easiest for information workers to author content, share it with others, manage its use and distribution, and be aware of any changes to this content. We call this combination of capabilities content services.
I spent the past three months talking to Google and Microsoft professional services partners, as well as Google Apps and Office 365 clients, to better understand how cloud collaboration and productivity suites are implemented and the value clients get once they move into these environments. One word that came up quite a bit during these conversations was "simple." As in "We think moving to [Google Apps or Office 365] will simplify our [costs, IT management, user experience, etc.]." This got me thinking: Should CIOs think moving collaboration workloads to the cloud actually simplifies their job? Well...yes, but there's a but. Simplicity in these environments comes with costs. Business and IT leaders must be sure they're willing to pay them as a condition of getting the benefits of the cloud. So what does this mean?
These platforms simplify contracting if you can live with the standard service agreement. One Google client told us one of the reasons they rejected the incumbent players was because they felt the licensing agreements were "convoluted." Yes, cloud collaboration and productivity suite providers have straightforward per user pricing for clearly defined feature/function tiers. But the devil's in the details. These players are able to deliver highly efficient, low-cost services because they do not permit a lot of deviation from the standard service agreement. So, healthcare clients looking for business associates' agreements will not find a willing partner in Google.* And smaller enterprises that require a dedicated collaboration environment will find that Microsoft enforces a minimum seat count on Office 365's dedicated SKU.
Google is officially serious about the enterprise space. I met with Google Enterprise execs hosting their very first analyst day in Singapore recently, and was introduced to their enterprise suite of services, which was, unsurprisingly, similar to their consumer suite of services.
However, while they took their starting point from the consumer end, providing enterprise-ready solutions requires a different level of product calibration. To that end, Google cites spending of approximately US$3 billion annually on building/improving its data center infrastructure, investing in undersea cable systems, and laying fiber networks in the US specifically. In Asia Pacific (AP) last year, they spent approximately US$700 million building three data centers in Singapore, Hong Kong, and Taiwan.
In addition to infrastructure investments, Google has also acquired companies like Quickoffice to enhance their appeal to enterprises weaned on Microsoft Office, while also expanding existing offerings in areas like communications and collaboration (Gmail, Google Plus), contextualized services (Maps, Compute Engine, Big Query), access devices (Nexus range, Chromebook), application development (App Engine) and discovery and archiving (Search, Vault).
Over the last couple of years, I've fielded a number of inquiries from Forrester clients who are trying to decide whether their company should move their email and other collaboration workloads into the cloud via Google Apps for Business or Microsoft Office 365. This conversation has gained so much momentum that I recently did a podcast with my colleague Mike Gualtieri on the subject, will host a teleconference covering the topic on February 26, and will soon publish a report detailing answers to five of the common questions that we get about online collaboration and productivity suites (which include Office 365, Google Apps, and IBM SmartCloud for Social Business). Fueling this extended conversation are business and IT leaders' deliberations over one question: Is there a right or wrong in selecting one vendor's offering over the other? I'll use a typical analyst hedge to answer: It depends.
Today’s deal between Microsoft and Nokia acts as a temporary lifeline for both companies. It gives Microsoft access to the largest handset provider, and it allows Nokia to defray some of its operating system development costs. I have just finished a report, “Mobile App Internet Recasts The Software And Services Landscape,” that will hit the Forrester site on Monday, February 28.
In the report, Forrester states, “The explosion of app innovation that started on the iPhone and then spread to Android devices and tablets will continue to drive tech industry innovation and have far-reaching pricing and go-to-market implications for the industry. Three different vectors of innovation that have been percolating under the surface will combine over the next 3-5 years. Mobile, cloud, and smart computing together will foster a new set of 'intelligence everywhere' apps.”
And based on that research, I believe that deal does not address the biggest issue for both companies – attracting apps and app developers. For Nokia, it now sends the message that Symbian and MeeGo platforms are no longer the long-term app focus. For Microsoft, it creates an eight-to-twelve month void/pause as developers wait to see what the new Nokia hardware looks like.
At the current rate that Apple and Android are recruiting third-party and enterprise app developers, this could mean a gap of 100,000-200,000 applications by the time the first Nokia Windows Phone device ships. This is likely a lead that even the combined resources of Microsoft and Nokia could not bridge.