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Schmidt: Enterprise is Google's next opportunity

The next big source of revenue for Google is selling services to big business, CEO Eric Schmidt says. Also: Consumer and enterprise customers aren't that far apart.

Google CEO Eric Schmidt
Google CEO Eric Schmidt in an onstage interview Wednesday at the Gartner Symposium in Orlando, Fla. Stephen Shankland/CNET

ORLANDO, Fla.--Eric Schmidt runs a company that earns most of its money from consumers, but the Google chief executive believes business customers are the company's next big opportunity for growth after selling ads.

"Enterprise is a huge priority for the management team and me personally," Schmidt said Wednesday in an onstage interview in the belly of the enterprise technology beast, the Gartner Symposium here. "It's the next big billion-dollar opportunity after our display (ad) business."

Google might not be at the core of every company's operations, but Schmidt has some roots in the information technology community that assembles in force at Gartner Symposium. Before Google, he was chief technology officer at Sun Microsystems and CEO of Novell.

Google has a variety of business-oriented products and services--Postini for security, Checkout for online shopping, a search appliance for in-house search. But the highest profile effort is Google Apps, which in its premium incarnation delivers Gmail and an online office application suite for $50 per user per year.

Schmidt argues there's not so much difference between enterprise and consumer markets as there once was, and the gap is narrowing. Gmail is one example:

"Gmail's growth is accelerating from its current position of users as we seem to be gaining share from everybody else," Schmidt said. "That's a good example of the consumer and enterprise growing together."

And Google is primarily interested in areas where the two worlds collide. "We'll keep trying to find ways to span enterprise and consumer," he said.

When it comes to pricing, Google wants to fund its own work but not charge much. The biggest constraint from customers is feature availability, not price, he said.

"Most of the sales activity is a discussion about strategy. Our prices are so much lower than everybody else's, there's never a price discussion," Schmidt said.

The company considered giving its enterprise applications away for free but rejected the idea, he said.

"We looked at ad-supported enterprise applications and decided most corporations would not be comfortable with random ads showing up on somebody's desktop," Schmidt said.

Schmidt also said the era of the Netbook is arriving--in particular, Netbooks running Google's forthcoming Chrome OS, a browser-based operating system.

With advancements such high-speed networks and browsers that can store data on a local computers and display hardware-accelerated graphics, the PC is growing obsolete, he argued.

"Maybe in a year it'll be possible for procuring a Netbook that costs a factor of five or 10 times cheaper than what you're getting today," he said.

Chrome OS is due to arrive on Netbooks in about a year, he said, reaffirming the existing schedule.

Editor's note: This blog was updated several times during Schmidt's live interview. The final update was published at 2:50 p.m. PDT .