Amid Flashier Projects, Is Google Finally Serious About Enterprise?

6/18/13Follow @curtwoodward

Google was back on the stump Tuesday, trying to convince enterprise software buyers that it really, truly cares about their business.

Amit Singh, the president of Google’s enterprise business, took the stage at the E2 conference in Boston to talk about the growing number of services that his company is offering for big business customers.

Google Plus, the social network envisioned as a Facebook challenger, is gunning to compete with business communication software like Yammer and Jive. There are hundreds of thousands of developers building millions of apps on Google App Engine, including Best Buy. And major companies like Costco, Roche, and Japanese airline ANA are moving all of their employees to Google apps for day-to-day business, Singh said.

“That actually took me by surprise,” he said. “The adoption curve is really accelerating.”

Meanwhile, in Silicon Valley and points beyond, people are building apps for Google Glass, hoping to get Google Fiber’s ultrafast broadband in their hometown, spotting one of Google’s driverless cars being road-tested, or marveling at the idea of Google Loon, a wireless network held aloft by stratospheric balloons.

Given those two options, which future version of Google are you supposed to believe—the serious enterprise software vendor, or the bold experimenter creating breathtaking new products for consumers?

Singh’s interviewer on Tuesday, InformationWeek editorial director Fritz Nelson, cut right to the point: “Are there any Google Glass projects in the works for the enterprise?” The idea drew a few muffled chuckles from the breakfast crowd, but it’s no joke.

Since it came to dominate Web search and online advertising, Google’s DNA has been in consumer services. Like any huge tech company, it tends to see new markets and sectors as an engineering and resources problem, something that can be solved if you throw enough money and people at it.

What that gets you is Google’s approach of—eventually—updating consumer products with features that business customers want. “Our intention since the beginning, for all our products, has been get them to scale, get the right features implemented, and once they’re ready, bring them to enterprise,” Singh said.

It’s hard to say what kind of business that approach has earned for Google, since the company still makes the vast majority of its money from its core online advertising business.

For 2012, ads accounted for $43.6 billion of Google’s $50.1 billion in total revenue. About $2.3 billion was from “other,” non-Motorola businesses, which includes Google’s enterprise products—but the company doesn’t break it out any further.

Some outside observers have tried to get at the size of Google’s enterprise business with their own studies, which have resulted in estimates as high as $1 billion per year. But you have to remember that Google also counts its non-Motorola hardware and online content sales in that “other” category, which means its branded devices and app store sales.

In any case, let’s stipulate that Google could be generating in the hundreds of millions of dollars a year in revenues from its enterprise business. While we have no idea how much that revenue costs, it ain’t peanuts—there are plenty of business software companies that are hoping to reach that scale some day.

There’s also plenty of opportunity for Google to grow its enterprise business, especially in a world where online software and multiple devices will eventually become the norm for corporate IT.

In a recent report, research agency Forrester noticed two big trends working in Google’s favor. Android smartphones are now on par with Apple devices in terms of market share among “information workers,” and the future of software points toward “no single, dominant ecosystem on the horizon to supplant the Windows-PC world.”

In that scenario, cross-platform service providers have a chance to gain market share among corporate buyers, Forrester said—provided their tools work well enough for heavy-duty enterprise demands.

Businesses, Forrester said, “can only continue to opt for ecosystem-specific solutions such as Microsoft Office … when the shortcomings of broad-reaching alternatives such as Google Docs are so profound as to derail productivity.”

Microsoft is moving toward this world, finally, with its recent decision to bring Office to Apple’s iOS mobile operating system. Apple is making its Office alternative, iWork, available in the browser.

Google certainly has some of the products and parts of the platform to begin competing. There is still some lingering skepticism out there about how serious Google is taking the enterprise business, but independent analysts have been saying lately that Google is making surprising inroads against Microsoft’s critical enterprise software business.

The question is whether Google is finally putting serious muscle into the effort, or if its enterprise business remains an also-ran alongside an expanding universe of consumer projects—all in the service of more data and a bigger, more profitable advertising network.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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  • Caramilk Ninja

    Senseless drivel and fluff. This article is clearly the senseless musings of an underchallenged mind.