Cloud // Software as a Service
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3/21/2011
11:47 AM
Chris Murphy
Chris Murphy
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Global CIO: Even For Google, No Free Pass For SaaS

Google has made a notable concession to business users of Google Apps. It's a sign of things to come for software as a service, as enterprise customers get more demanding.

In the past, when Google decided a new feature was ready for Google Apps, that feature would just show up for business and consumer customers alike. Google considers that a key advantage of software as a service -- customers get a steady stream of innovation rather than have to wait for jarring upgrades.

But a lot of CIOs hate that approach, since they have no time to prepare employees or test their systems. So, as Thomas Claburn writes, Google has created a slow lane, where business customers get at least a week’s notice before Google will turn on new features in Gmail, Contacts, Google Calendar, Google Docs, and Google Sites.

Two things are important to note here. One, it shows that Google is taking enterprise customers seriously. Adding a dual track is no small move for Google -- businesses have long asked for this approach, and Google has resisted. Having two of anything is anti-SaaS, since the vendor economies of scale all point to having one version of the software. (For more on the challenges, see Assembla's post on "Should SaaS companies offer a "stable" version?")

Google has sent mixed signals about how important enterprise customers are to the company. When Google recently highlighted its vital emerging business lines, enterprise apps barely got a mention, as Google execs crowed about mobile, YouTube, and display advertising. I suggested last year that one of the company founders needed to embrace the enterprise apps opportunity by stepping up to take charge of that business. But now that the one person in Google's triumvirate with enterprise chops, Eric Schmidt, has been kicked upstairs, Google's enterprise business seems even less likely to rise in prominence. Financially, it's easy to see why: advertising makes up more than 96% of Google revenue, and enterprise apps falls into the "other" category that makes up the rest. (The NY Times' David Carr today explores whether Google is becoming a media company.)

Given this tepid corporate backing, steps like the Google Apps slow track, and the company’s promise to build a separate cloud environment for government customers, are important.

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