Google wants a piece of the business market. But does it understand what companies need?
In mastering the art of finding information on the Web, Google Inc. has learned lessons it intends to apply to business computing. Some of its know-how is found today in two metal boxes, the Google Search Appliance and the Google Mini, which house the company's all-important indexing algorithms. But Google's newest products go beyond keyword search, and CEO Eric Schmidt last week indicated that the company will try to market those to businesses, too.
The things that have gotten Google where it is--talented people in a corporate culture of out-of-the-box thinking--can shake up business computing in a positive way, Schmidt contends. "We delight as a company in doing everything differently," he says. Referring to Dave Girouard, general manager of Google's enterprise business, Schmidt says, "In his group, we have the wildest meetings, because it's basically all these people who want to change IT."
Google's out-of-the-box thinking can shake up computing, CEO Schmidt says. "We delight as a company in doing everything differently."
Photo by Eric Millette
That's a grand goal, considering that Google has provided fairly narrow business offerings so far. But Schmidt, in an interview with InformationWeek, made it clear the company intends a steady stream of business-centric products. The latest addition came last week: Google Desktop Search for Enterprise, software that sits on PCs and comes with security, configuration, and deployment controls that IT administrators can centrally manage. In addition to searching documents and other files on a computer, it can comb through IBM Lotus Notes databases and messages in Microsoft E-mail clients. If linked with a Google appliance, it can simplify search by offering a single interface to do queries of a PC, intranets, and the Web.
Google Desktop Search was hatched as a consumer-oriented addition to Google's Web site, then tweaked for business IT environments. That's likely to be the model as Google expands its business offerings. More and more of what's on Google.com will be available through its search appliances, Schmidt says.
"Imagine the evolution of this product line," he says, pointing to the company's blue Google Mini search appliance. "It gets very interesting. Without preannouncing anything, it seems like a no-brainer. You have lots of these things sitting around inside all these [companies'] networks. Just think of the strategic value of that to Google."
Schmidt won't say what other Google technologies might be repackaged for business environments, but it's not hard to guess: E-mail, instant messaging, image search, and discussion groups are among the possibilities. Sue Feldman, VP of content technologies at research firm IDC, expects Google eventually to offer the ability to categorize information, browse files, and hard-wire certain documents to be returned for specific queries.
Why would companies choose Google? Because its approach is simple and inexpensive at a time when business-IT infrastructures are overly complex and costly to maintain, Schmidt says. The company's scale and brand-name recognition work to its advantage, too, he adds.
The Google Search Appliance, which has been available for about three years, starts at $30,000, while the newer Google Mini, a scaled-down search box that debuted in January, sells for $2,995. Google Desktop Search for Enterprise is free and can be used without a box if a company only wants to give employees desktop search. By comparison, other name-brand vendors' systems for Web-site search range from $50,000 to $500,000, says JupiterResearch analyst Eric Peterson. "We're in favor of low prices," Schmidt says with a grin.
It's fair to wonder, though, how seriously Google will take the enterprise business. Google's base of 1,000-plus business customers generates only a tiny sliver of company revenue; nonadvertising revenue accounted for 1% of the company's sales last year. Last week, the day after unveiling the Desktop Search for Enterprise, Google revealed a major new home-page customization option that takes consumer rival Yahoo Inc. head-on. It's unlikely that Google's business model will diversify noticeably from advertising in the near term, Schmidt concedes. But there's clearly room to grow in the business market. "The biggest story in enterprise search is the unbelievably high number of companies--almost two-thirds of them--that don't invest even nominally in something like the Google Mini," Peterson says.
It's a profitable market, Schmidt says, and perhaps more important, one that Google needs to understand and stay close to, regardless of the economics. "It makes perfect sense to me that you should do this even if you weren't making money, which is not the case," he says. "You would be willing to lose money in this business for the strategic leverage that it gets you to reach those customers. They are the power users."
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