If there was any doubt, Google is aiming for the enterprise, a realm where on-premise applications still reign supreme.
"On-premise applications will not go anytime soon, but most of the innovation will come in the cloud," Rishi Chandra, product manager for Google Enterprise, told several hundred attendees of the Enterprise 2.0 show in Boston Tuesday morning. He left little doubt that Google intends to attack enterprise IT with gusto, claiming that the cloud model offers huge per-user cost advantages over the alternative.
Consumer-oriented technologies, starting with Google Search and instant messaging, have already forced their way inside corporate firewalls. Now iPhones, iPods and other nonsanctioned technologies are doing the same. Google clearly hopes to ride that wave right into the heart of enterprise IT, much to the chagrin of many solution providers and value-added resellers (VARs) who see Google specifically, and cloud computing in general, mostly as a threat that will disintermediate them.
Google's (maybe not so) latent message to business IT pros -- both inside and outside companies -- is that they should reap the advantages cloud computing brings and keep on top of the consumer technology breakthroughs that increasingly drive enterprise IT.
Cloud computing (which Chandra defined as the model where data and computing power are hosted on the Web and accessed via browsers) has already proved to be scalable and reliable, Chandra said. In his view, near-ubiquitous fast Internet access has broken down one important barrier. And, by aggregating storage for millions of Gmail and Google Apps users, the company has pushed the unit cost of storage down to "near zero," he said.
Businesses should strive to take advantage of those cost savings for their own enterprise IT efforts, he said.
Security remains a sticky wicket. There is still a perception that cloud-based computing is inherently less secure than the traditional enterprise IT plan, which runs corporate applications on servers within the firewall, and Chandra acknowledged that Google and like-minded vendors must prove themselves worthy of trust.
In Google's view, on-premise computing is hardly as bulletproof as its supporters assert. "How secure are you today? One out of 10 laptops is stolen within the first 12 months of purchase, and 60% of those laptops hold corporate data," Chandra said.
He maintained that if data is stored in the cloud, such theft is not an issue beyond the replacement cost of hardware.
Of course, the cloud itself must be secure, and Chandra acknowledged that enterprise IT staffs must sort out who they can trust when it comes to their precious data. Many businesses are already outsourcing key functions, including payroll, where outsourcing is more the rule than the exception.
He argues that Google's reinforced cloud is already secure. "Would you rather have the five or 10 security professionals you have in-house or the thousands of security professionals Google has?"
It's an interesting question. And given the reaction of some, the answer may not be one Google wants to hear. "People still want control of their apps and data. And despite what was said here, you really cannot assume you'll always be connected," said one attendee who did not want to be named.
"Enterprises are not ready. They will not trust their most valuable intellectual property to something outside their control," said Yacov Wrocherinsky, CEO of Infinity Info Systems, a New York-based solution provider specializing in CRM and ERP applications.
Google Gears is addressing one gap in Google's strategy: the lack of offline capability. Google Gears has been integrated with Google Docs and will soon come to Gmail as well, Chandra said.
VARs poked some holes in Google's arguments. For one thing, even if a business runs in the cloud, most users still want local data. That means a stolen laptop is a threat whether the company is using Google's infrastructure or its own.
Secondly, Google "presumes ubiquitous connectivity, which is still not necessarily the case, and it's expensive any way you cut it … as the users of the new versions of the iPhones are about to find out," said Richard Warren, principal of North Carolina Technologies LLC, a VAR based in Wilson's Point, N.C.
Google has taken baby steps to incorporate partners into its appliance push and evangelizes the Google App Engine as a platform for third-party developers. But many VARs still view it, and the cloud-based model, with suspicion.
"The entire solution provider and value-added reseller model mitigates against this message," Warren said. "You may be able to trust a company the size of Google but you absolutely cannot count on Google even recognizing, much less evaluating, the value of an individual customer. Yes, the flea can believe the elephant is real, but the elephant in general doesn't know the flea is there."
Business customers want a business relationship, Warren and other VARs noted. They want to be able to reach someone on the phone or meet face to face for consulting or to figure out a problem. "They want someone to call if something goes wrong. With Google that won't work unless you're a Fortune 1000 company and can call Eric Schmidt," Warren said. Schmidt is the CEO of Google.
For that reason, many in the VAR community, even those who've butted heads with Microsoft in the past over margins and channel conflict, now see Microsoft as the lesser of two evils when it comes to vendors.
Microsoft has a vested interest in touting the continued legitimacy of on-premise software, which is why it touts "software plus services" versus the Software as a Service mantra that Salesforce.com and others have pushed for the last few years. Microsoft and its partners say there's a lot of life and innovation left in local computing power combined with cloud-based services in the form of Windows Live and Office Live.
Google tries to put a good public face on what is increasingly seen as a grudge match with an entrenched Microsoft. Asked if Microsoft is a competitor, Chandra acknowledged, in words that sounded very much like Microsoft's, that the companies compete in some areas, "but we don't see ourselves beating any one particular competitor," he said. "It's all about creating value for end users."