Google ready to get down to business

Google believes it can become the next great enterprise software company by focusing on the Web, hoping that CIOs will finally give it the alternate revenue stream it has long sought.

Google Atmosphere 2010
April showers couldn't dampen Google's enthusiasm for the 400 CIOs in town for a cloud computing pitch. Tom Krazit/CNET

MOUNTAIN VIEW, Calif.--Google wants to be the next big enterprise software company.

Truth be told, Google wants to be the next big everything. Monday's target was the budding Web-based enterprise software market, as Google pulled out all the stops to convince an audience of 400 CIOs and technology managers--plus far more on a Webcast--that cloud computing isn't so much the future as the present and Google can make it happen.

Enterprise computing hasn't been sexy for years . Indeed, author Geoffrey Moore of TCG Advisers explained to the crowd that after binging at the Y2K trough, enterprise computing basically took the decade off as consumer-oriented companies changed the world through a shift to mobile devices and the growth of social networking.

As a result, employees now have different standards for how they want to work. "Most IT innovations (over history) start in the enterprise and go to consumer," Moore said. "This one is going to enterprise from consumer."

That's a tough realization for CIOs used to setting the technology agenda at their companies. "There's something about cloud computing that pushes buttons on people more than any other transition in computer history," said Dave Girouard, president of Google's Enterprise division. "It's so fundamentally disruptive to how things are done."

And there's nothing that Google enjoys more than being disruptive. Google has been working on its Gmail and Google Docs suite for years and is betting heavily that a generation of IT managers is ready to make a grand shift away from the traditional "stack" of enterprise computing to one that is more distributed across the Web.

Only the rain dampened Google's pitch. Conference attendees were given a five-minute training session on the use of their sleek Herman Miller chairs. Google's main auditorium and cafeteria was shut down for the day as cooks catered to the CIOs. All attendees went home with Nexus One Android phones.

And industry heavyweights, including Moore, Morgan Stanley's Mary Meeker, Salesforce.com CEO Marc Benioff, Amazon CTO Werner Vogels, and a parade of notable Google executives and engineers led an elevated discussion of cloud computing's promise. Google even brought in Baratunde Thurston of The Onion for a 30-minute standup comedy routine, and he made sure to show the clip featuring the Google Privacy Opt-Out Village.

The full-court press is warranted, because there is general agreement that the cloud computing revolution has legs. There's an elegant simplicity to cloud computing for both users and IT organizations.

For users, the promise of accessing their data and getting their work done from anywhere on a device of their choosing--as opposed to one dictated by IT--has large appeal. IT managers are a tougher sell, but they are intrigued by the simple (and cheap) pricing model and the ability of the Web to bend to business models that have grown more complicated and require more collaboration.

David Girouard Google
Dave Girouard, president of Google's Enterprise division Tom Krazit/CNET

Manesh Patel, CIO at Sanmina-SCI, said switching to Google Apps for mail and calendaring saved his company $2 million a year. Randi Levin, CIO for the city of Los Angeles, said the very public battle to switch the city to Google Apps saved at least $5 million in cash up front, and the actual return will be much greater since LA now has disaster recovery services that would have been much more expensive to create on their own.

Even the classic objection to cloud computing--security--was dismissed by Google's early adopters, who reasoned that Google was more likely to do a better job protecting their data than they could on their own (after their own legal and security experts signed off, of course).

Google Docs is not for everyone, the same attendees admitted. Excel junkies in the finance department openly revolted at the thought of moving to Google Spreadsheet at two of the early adopters profiled Monday, but that's a small segment of a larger population within their companies that only needs the basics.

Google is shooting for "the 80 percent solution," said no less an authority than CEO Eric Schmidt. "Our applications are not full replacements for the incumbents. Our strategy is to get to 80 percent, we think we can provide some real value."

Google is, of course, not the only company who has figured this out. Microsoft, the elephant in the room at Atmosphere that arguably has the most to lose from this shift, plans to offer its own Web-based office productivity software later this year with the launch of Office 2010. Several attendees cited Salesforce.com as the ground-breaking application for the acceptance of cloud computing within their organization, and Benioff deployed his trademark flair in pitching his wares to the attendees, about half of which acknowledged they were already Salesforce.com customers.

But it was Google's conference. Google kicked off the show by announcing that it had improved the underlying software beneath the Google Docs suite, making the existing products faster and better capable of preserving document fidelity from offline versions.

It trotted out engineering heavyweights Alan Eustace, Jeff Huber, and Vint Cerf to answer questions about any aspect of Google's business. Search design guru Marissa Mayer and Android leader Mario Queiroz also made appearances, and Schmidt closed the day by fielding inquiries on everything from security to management advice.

The message was simple: Google is throwing the full weight of its formidable engineering and infrastructure resources behind this shift. It pledged fealty to the enterprise Monday, arguing that based on its search strength and innovative products, it has the best view of how technology is evolving among the traditional computer industry players.

Google watchers have waited patiently for the company to develop a revenue stream that is not dependent on search. At the moment, despite some real success stories revenue from Google Apps is less than 3 percent of Google's total revenue, a figure measured in the hundreds of thousands, not millions.

Chrome is free. Android and Chrome OS are free (to hardware makers). Google Apps doesn't cost a lot of money for enterprise customers, but $50 per user per year adds up to something.

After a decade of slumber, the enterprise IT market looks set to embrace change and spend money to make it happen. Google wants in on the action.

 

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