Global CIO: Will Google Miss Its Moment In Enterprise IT?
Google wasn’t in the game a year ago in terms of landing e-mail system contracts from most big businesses. Now it is. Can it close the deal?
There's been a change of thinking among CIOs, a new openness to alternative software models such as Google's online e-mail and productivity suite. That's the idea behind this week's InformationWeek cover story (download the magazine PDF here.) This rethinking is driven by new capabilities in the cloud, but even more so by the grinding recession of the past year, which made the tradeoffs of online software—less customization, new security concerns, different in-house skills—more palatable.
That opens the door for Google. But Google needs to prove once and for all that it's deadly serious about the enterprise IT business. It's time for one of the company's founders, Sergey Brin or Larry Page, to take personal responsibility for the enterprise business. One of these leaders needs to lash his incredible intelligence and creativity and passion and personal credibility inextricably to making Google Enterprise a multi-billion dollar business, one that's more than just the rounding error it is to Google's ad-driven business today.
Is the enterprise market worth that level of leadership commitment to Google? Will it ever be one of the pillars of Google's business? If it's not, how seriously should the CIO of JPMorgan Chase, or Exxon, or GE, or Coca-Cola, take Google as an innovative leader in the world of enterprise IT?
(This is the latest in Global CIO's analyses of major IT vendors' strategies for reaching the worldwide corporate IT market. To see some of our analyses, be sure to check out the "Recommended Reading" list at the end of this column.)
CIOs see lots to like about Google. That $50 per employee a year cost for e-mail, with huge storage and reduced support costs, looks mighty appealing these days. But they worry most about security. They fret about unexpected downtime, and about how they'll get their data out if they drop Google. Most don't particularly love Google's online document and spreadsheet—they tend to let employees use them, but keep Microsoft Office as well. Microsoft will blunt the biggest reason today for using the apps, online collaboration, if it delivers Office online next year. And Microsoft and IBM are taking the threat from lower-cost, online e-mail head-on with their own offerings.
Enterprise products are a tag-along business for Google today, lumped into the 3% of its total revenue that's described as licensing and other revenue. But 3% of Google is still north of a $700 million-a-year business—about the size of Salesforce.com two years ago.
Google sees the opportunity. Look at what it's proposing for the U.S. government—a version of its online services that fits the security and policy needs of government. That's a dramatic move for a company whose competitive advantage lies in part with a shared infrastructure approach.
Look at its Postini acquisition, an essential piece that's given a boost to its enterprise drive. And look into more subtle moves, like adding its online translation capability to Docs. That's a tiny glimpse into how Google's online portfolio could be incredibly powerful if tailored to business use.
A call for commitment from Google's highest executives isn't a knock on Google Enterprise's leadership today. Dave Girouard and that team have put Google in this game, and deserve the credit for doing so. But it's time for the company to commit to the next level of focus if it intends to push its IT business above that 3% level.
Google can be a very effective service provider to businesses without this level of leadership commitment. Or, with it, it can become a strategic partner to businesses, one of the four or five IT vendors that work hand-in-hand together to solve new problems and move into new areas of the business. But before the CIOs at the world's largest companies will confer that status upon Google, they want to know someone like Brin or Page is right there with them—that his future is tied just as firmly to this effort as is the custmer's.
CIOs are willing to take Google seriously—very seriously. The bigger question is this: does Google take them just as seriously?
Chris Murphy is editor of InformationWeek. You can reach him at firstname.lastname@example.org.
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