Impressions From Google Enterprise’s Road Show

Recently I attended one of the day-long events in Munich that Google offers as part of its atmosphere on tour road show that visits 24 cities globally in 2012. The event series is aimed at enterprise customers and aims to get them interested in Google’s enterprise solutions, including Google Apps, search, analytics and mapping services, as well as the Chrome Book and Chrome Box devices.

Google Enterprise as a division has been around for some time, but it is only fairly recently that Google started to push the enterprise solutions more actively into the market through marketing initiatives. The cloud-delivery model clearly plays a central role for Google’s enterprise pitch (my colleague Stefan Ried also held a presentation on the potential of cloud computing at the event).

Still, the event itself was a touch light on details and remained pretty high level throughout. Whilst nobody expects Google to communicate a detailed five-year plan, it would have been useful to get more insights into Google’s vision for the enterprise and how it intends to cater to these needs. Thankfully, prior to the official event, Google shared some valuable details of this vision with us. The four main themes that stuck out for us are:

  1. The actual enterprise solutions are innovative and very user-friendly. We believe that Google Apps is a leading collaborative solution and at €40 per year a user is clearly very attractively priced – despite certain aspects of Google Apps functionality lagging behind Office. We also like Google’s evolutionary approach to innovation, often based on trial and error. We do not expect big-bang announcements. However, such an approach to innovation is not the norm. Some enterprises will have to go through a learning process to rely on apps that: 1) are potentially not fully tested and 2) evolve over time in a piecemeal fashion in terms of features, etc.
  2. Google believes that the future for application usage is browser- rather than OS-based. I share Google’s opinion that an HTML5 browser-based approach to app development and consumption looks promising for app developers and app users alike by removing what essentially is a form of walled garden, i.e., the OS. Apps would have to be developed only once and could be consumed across many different device types irrespective of the OS. This in turn should drive up the quality of the applications and increase overall usage. In such a post-OS scenario, device manufacturers would have to define additional differentiators. The industry is taking a variety of approaches, and clearly other opinions exist, ranging from “native or OS-bound apps are the future and the browser is dead” to “the hybrid approach for mobile app development is the future.” Many app developers take a very different approach from Google’s, with some evidence of success.
  3. Google’s go-to-market approach aims for a 100% reliance on indirect channels. While this makes sense for a majority of accounts, many MNCs are unlikely to deal through indirect channels. They will ask for direct account management. Our sense is that Google has a steep learning curve ahead of it in order to find the right balance concerning its channel strategy and its channel partner program. This could hamper the uptake of Google’s enterprise solutions.
  4. Google is addressing enterprise concerns about compliance and security. It was good to see that during the event there was a special presentation dealing with compliance and security. However, in our view, the local context could have been addressed more explicitly, in particular the most obvious concern expressed by European CIOs: “What are the risks of the Patriot Act for my business?” Google could have been more explicit about its Safe Harbor public filing to address the EU Data Protection Directive.

Going forward, I see a challenge to Google’s enterprise ambitions in the potential conflict of interest between Google’s core advertising-funded business model and the subscription-based enterprise business model. Clearly a “free” (ad supported) model can live side-by-side with a premium (subscription) model. But the temptation to place advertising in a premium enterprise context might still be there. This potential conflict of interest could be overcome by having a clearer separation between the two activities.