VARs are watching Google's latest business software foray -- Microsoft Outlook synchronization with Google Apps...
-- with great interest.
At a San Francisco launch event Tuesday, Google trotted out IT execs from Genentech, the Morgan Hotel Group and Avago -- all Microsoft Exchange Server shops -- to counter the notion that businesses aren't buying Google Apps. But those companies are all names Google has bandied about for some time.
Until there's a way to make money from Google Apps, VARs say they don't plan to push the $50-per-user-per-year service. Widespread adoption by schools and a few reference accounts like Genentech Inc. aside, they see zero Google Apps adoption in business accounts.
"I am not aware of a single IT customer using Google Apps," said Ron Herardian, co-founder of Global System Services Corp., a Mountain View, Calif., solutions provider.
As for Outlook synchronization? That's nothing more than a baseline requirement.
"Without Outlook sync, they cannot touch customers currently using Exchange, which is the majority of IT customers in the U.S.," Herardian said via email.
Consumer praise may boost Google Apps for business
Another VAR, who spoke on the condition of anonymity, warned others not to dismiss Google Apps out of hand, however.
"Nobody in business is using Google Apps," he said via email. "Having said that, I have kids in grade school who are doing with Google Apps what we do for customers with [Microsoft] Exchange, Office Communications Server and Office, basically for free."
Clearly, Google Apps is a big problem for Microsoft and solutions providers, this VAR acknowledged. But the issues posed by extremely cheap hosted email services are not limited to Google. He said Microsoft is following Google down the path of disintermediating partners from the equation with its own hosted Exchange and SharePoint services.
"Microsoft wants to own the customer," he said. "They pretend to listen to us, but they want to host the app. They want the customer relationship, even though we are the face to the customer."
This VAR said he has tried to get information on the Google Enterprise Partner Program and has had five phone calls go unreturned. "Our customer base is perfect for Google Apps, but Google just isn't set up to deal with partners," he said.
At the press event this week, Dave Girouard, president of Google Enterprise, re-emphasized that VARs have a place at the table. The company launched its enterprise partner program for Google Apps in January, and Girouard said it's attracted many takers. Resellers get a 20% commission on Google Apps deals -- or $10 per seat per year.
"If you bring Google Apps into an account, you get that same commission in perpetuity as long as the customer wants to work with you," Girouard said.
Google will also add more products and services to that model over time, he added.
Still, "we'd never expect pure reselling of product to drive the economics of VARs and systems integrators," he said. "[The bigger opportunity] lies in helping with migrations, training, help desk."
Google provides support to mail administrators, but not to end users, and that could be a need VARs can fulfill.
Google Apps partners look on the bright side
Some Google Enterprise partners are optimistic about the opportunities, but even some of them said wringing profit from Google Apps may prove difficult.
Matt McKnight, president of LMN Solutions in Reston, Va., which has worked with Google Appliance customers for years, said he's interested in Google Apps but sees making money on related services as a challenge.
"Even getting someone set up on Google Apps is pretty easy," he said. "And as for help desk, if Google servers are down, there's not much a partner can do about it."
In government accounts, it's difficult to change policies around data storage to enable the use of outsourced services. That's probably the biggest barrier to adoption for Google Apps, McKnight said.
But the CTO of a large Midwestern financial firm said more businesses are likely to consider Google Apps -- or similar low-priced services from Microsoft and others -- if the recession continues.
George Hammerschmidt, COO of Nortec Communications Inc., a Falls Church, Va., solutions provider, said VARs are better off offering self-branded hosted Exchange Server than either Microsoft-hosted Exchange or Google Apps. The problem is the email vendors want to wrest account control from VARs, and that is unworkable in SMB accounts.
"We're not as cheap as free Google software, but we get it to work," Hammerschmidt said. "There is a 'V' in front of 'VAR,' and smart VARs who do in excess of 50% to 60% of their business in professional services add lot of value."
Mike Cizmar, president of MC+A of Chicago, said his company does robust business in search and collaboration professional services around the Google Appliance and is seeing critical mass forming around Google Apps as well.
In his view, Google is following in Microsoft's footsteps. "It's the same strategy as Microsoft 20 years ago when people used to say 'Windows NT isn't a serious platform.' Microsoft owns the enterprise now."
Cizmar agrees with Google that the ability to put an Outlook face on Google mail will break down barriers to use in business accounts.