Microsoft’s financial results and its deal with Yahoo have motivated Google to launch a marketing campaign aimed at Microsoft’s enterprise revenue. The marketing will escalate because Microsoft and Yahoo now threaten Google’s crown jewels of search and advertising. Google wants to gut Microsoft’s strongest money machines, which are its applications and enterprise software. Google has been moving slowly into a position from which an attack on Microsoft’s core assets could be launched. With the forces in place, Google’s on the offensive.
When the green light flashes on the tie-up between the Microsoft and Yahoo search teams, Bing.com becomes the Yahoo Web search engine. Microsoft gains access to Yahoo’s ad sales platform. Microsoft’s commitment to Web search and online advertising comes at a time when revenues across its lines of business have softened. The release of Windows Version 7 will provide a boost to the consumer business, but it will take months for the impact of the new release to generate significant revenues in its enterprise sector. Organizations are often unwilling to upgrade to new versions of operating systems and software until the vendor has had time to shake out the bugs.
The question is, “Will Google see the direct threat of Microsoft-Yahoo as sufficient motivation to put increased pressure on Microsoft’s enterprise business?” I think Google has already begun to rev its enterprise engines. What is surprising to me is that quite a few analysts and Microsoft watchers have not seen the pattern of the late 2009 assault forming.
Let me identify the three prongs of this stepped up effort to bleed revenue from Microsoft’s enterprise revenues. Google provides little information about its strategies, but the company’s technical documents, available from Google Labs and in its public documents such as U.S. Securities & Exchange Commission filings and patent applications, offer tantalizing clues about what it has in its rapid attack force. I monitor those sources and have identified three technical initiatives that suggest the broad outlines of how Google will probe the underbelly of Microsoft’s enterprise revenue.
Google wants to “WAC” Microsoft where any revenue traction can have larger implications for Microsoft’s profitability. Google must make steady progress within the customers of its Google Search Appliance, Postini and Gmail services, as well as its Google Apps like mappings and word processing among others, to inflict significant pain on the Microsoft enterprise hegemony.
The W in WAC represents Google Wave. In my study of Google’s publicly available technical documentation, Wave is a next-generation SharePoint. Microsoft SharePoint is one of its most successful enterprise applications. It is low cost and easy to install. The basic system bundles collaboration, content management, search and workflow functions. A basic SharePoint installation can be scaled to handle thousands of users. The system requires a Microsoft Certified Professional to manage some of the nitty-gritty of scaling, but that is standard operating procedure for Microsoft. Its Certified Partners grab a significant portion of the consulting and engineering support SharePoint requires. Once an organization embraces SharePoint, those who can manage and customize the system often have a permanent job or consulting engagement.
W is for Wave
Wave, which is becoming more widely available, is a next-generation SharePoint. The principal difference between the Microsoft SharePoint approach and the Google Wave one is the fundamental plumbing. Wave is a cloud application. SharePoint, on the other hand, is now an on-premises application, and Microsoft is working to re-engineer the system. The other important difference is that Google is making Wave an open source project. Microsoft’s for-fee approach to software has required Microsoft marketers to explain that open source is not the same as commercial software. Whether Microsoft’s arguments are right or wrong is irrelevant. Google wants to tap the vibes of the open source world, which has implications for developers and bean counters looking to reduce Microsoft Client Access License (CAL) fees.
A is for Android
The A in WAC stands for Android, which is Google’s polymorphic software for mobile devices. Android is described in newspapers and magazines as a mobile phone operating system. However, the Android technology can run on any mobile device. Google’s approach has been a late starter, but the Microsoft mobile technology has lagged. Will Google gain traction against the corporate mobile giant BlackBerry from Research in Motion? I don’t think there will be significant shifts in the short term. But for some organizations, the appeal of a low-cost mobile device that connects seamlessly with Google services may warrant test installations. If the tests are favorable and reduce costs significantly, Google could easily expand into organizations with Android on a range of third-party computing devices. The CEOs might carry a BlackBerry, but certain members of the work force might find Android-equipped devices useful and more desirable.
Unlike Apple, Google is bridging the consumer/business functionality gap. Any foothold in the enterprise allows Google to upsell its other services. Microsoft may find itself squeezed in the mobile market and in the mobile device enterprise business sector without a quick, economical way to thwart Google. Microsoft’s phone initiatives have not become the success that Apple iPhone or even Android have achieved in terms of catching the interest of the young at heart and technically wise buyers.
C is for Chrome
C is a mnemonic for Chrome, which is installed on a computing device. It looks and feels like a browser, but it’s more like a digital air lock. Chrome can connect a computing device to the Google data center. Developers can use Chrome to deliver applications that run on the computing device so that the line between local and cloud-based services becomes irrelevant to the user. Once the device is connected, Chrome can support different virtual Google machines and make the operating system irrelevant. The user gets functionality. In the enterprise, Google-savvy developers can use Chrome to create applications that mimic fully the older, increasingly expensive, on-premises enterprise systems. Microsoft is working to move its enterprise applications to the cloud. The problem is that Google is cloud-ready and moving to the enterprise with an “as is” service; Microsoft is working in “to be” mode.
I see four thrusts taking place over the next four to five months. First, Google will allow developers, partners and early adopters to explore, test and provide services and applications based on all or some of the WAC components. There’s no charge for a programmer to develop with Google technology. Google partners are becoming increasingly aggressive in developing applications for its enterprise search products. My son, who owns Adhere Solutions in Chicago, sells a Google adapter that hooks a GSA into an enterprise’s proprietary content. A couple of clicks and the GSA gets a turbo boost. He’s not alone. BearingPoint, Onix Networking and dozens of other firms are pushing forward with Google enterprise products and services.
Second, startups and innovation centers in larger organizations are now looking at Google’s products and services as viable test beds for certain applications and services. One large firm known for its expertise in retail is shifting to Google products and services. When a brick-and-mortar firm goes Googley, it is clear that Google is in a position to find a way to pound pitons into the monoliths that Microsoft has put in place.
Third, Google’s Wave, Android and Chrome components play together well. Each can tap into other Google functions such as Checkout (back-office billing and payments) and Google Apps (word processing, presentations, spreadsheets, e-mail and calendar functions) without any additional coding. For clever technologists, WAC provides a playground with quite a few bright, shiny toys and a giant jungle gym. Innovation, therefore, is not Google’s responsibility. But when one of the developers or innovators hits a proverbial digital home run, Google will be quick to capitalize on that initiative.
Finally, organizations want to use Google. The top management hears that “search should be like Google” and “e-mail should work like Gmail.”
Google will let its users carry the battle to Microsoft in the enterprise. Microsoft has to be prepared to lower its license fees, work hard to keep its Certified Professionals in the fold, and deliver products that work and work well quickly. If the value is not immediately evident, Google will be waiting to whack a solid double, maybe a home run in the enterprise game.