What's holding back Google apps‾

Aaron Ricadela/BusinessWeek
19 May 2009

When Google announced a foray into business software two years ago, it touted General Electric as one of its trophy accounts.

GE had begun using Google-designed applications for some of the tasks typically handled by Microsoft\'s pricier Office, which includes e-mail, word processing, and spreadsheet creation. Adding GE was a coup for a company that, despite having mastered Web search, was a neophyte in the Microsoft-dominated, multibillion-dollar world of business-productivity software.

Two years later, GE is rethinking the relationship. It\'s now testing Google\'s along with the Zoho suite of products from another upstart, AdventNet. It\'s also considering planned Web versions of Microsoft Office software. \'We look at it as a race right now,\' says GE Chief Technology Officer Greg Simpson.

Google might have been a shoo-in. The $50-a-person price tag for Google Apps can cost roughly half the licensing fees charged by Microsoft. Zoho\'s applications aren\'t as robust as Google\'s, says GE\'s Simpson. But Zoho\'s technology lets GE store data in-house, on its own servers, making it easier to adhere to computer security and accounting policies for sensitive business information. Google Apps, on the other hand, store data on Google\'s servers. \'That\'s probably our biggest stumbling block to going bigger with Google,\' Simpson says.

Too much control‾

GE\'s quandary underscores the challenge Google faces as it tries to expand into new businesses to augment its Internet search and advertising prowess. The search engine needs to train its array of computers and data analysis acumen on new types of problems to fuel future growth. Yet companies are also wary of ceding Google too much control over their information.

At the same time, Microsoft is moving quickly to gain the same ground, preparing ways for users of its ubiquitous Word and Excel software to perform many common tasks in a Web browser as soon as next year. \'Companies run pilots on Google; they run their business on Microsoft,\' says Alex Payne, product management director in Microsoft\'s Office group.

Now, Google is beginning an offensive to entice more companies to use its software. At a developer conference in San Francisco on May 27, it plans to announce a uniform way for programmers to incorporate Google\'s search engine, spreadsheet, maps, videos, and e-mail software into their own applications, says Vic Gundotra, vice-president of engineering. \'We\'ll give enterprise developers a very simple entry point,\' he says.

Google is also developing software for mobile phones that could work with customer management software to pinpoint contacts or tally relevant expenses based on what city a sales person is visiting, Gundotra says. It released software in April that lets companies import data from business applications such as SAP and Oracle into its Google Spreadsheets program.

A network of resellers

In the field, Google is enlisting aid from the likes of Capgemini, Hewlett-Packard\'s EDS unit, and Accenture to build a network of technology resellers that can push Google\'s business products along with services like custom programming and technical support. On May 13, Google announced that Capgemini helped French auto parts supplier Valeo move 30,000 workers to Google Apps. \'We recognize we\'re outmanned on the street,\' says Dave Girouard, president of Google\'s enterprise business. \'Microsoft has a long history in these [business] accounts.\'

Exhibit A: Google Apps still claims just a few large customers besides GE.

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