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Google Apps resellers gain traction

Cloud Sherpas decided to hitch its cloud-service-provider wagon exclusively to Google Apps and found the last three years to be quite a journey.

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Selling prospects on the cloud-based messaging and collaboration suite seemed to be an uphill fight when the company first tried, said Eran Gil, Cloud Sherpas’ co-founder and vice president of business development in an interview. But things have changed considerably since the early days of cloud computing, and the Atlanta-based company then grew quickly -- about 600% between 2009 and 2010 -- and anticipates triple-digit growth this year as well.

“Every organization is looking into moving some of their solutions into the cloud,” Gil said. “We see a tremendous increase in cloud adoption. I think there is no question the cloud is the evolution of IT.”

Google Apps offers Cloud Sherpas -- and hundreds of other authorized Google Apps resellers -- a revenue opportunity that extends well beyond the price per seat. Google Apps for Business is priced at $50 per user per year. Google Inc.’s partner website acknowledges its list price “is likely much lower than the cost of your client’s existing systems,” but suggests margin can be made up elsewhere.

Indeed, Google Apps resellers offer a mix of services around the product’s core. Consulting, training and change management, in which resellers help customers acclimate to doing business in the cloud, rank among the key services. Resellers can also build upon Google Apps installations, tapping a growing roster of products designed to work with the cloud solution. Third-party products and services include single sign-on, unified communications and backup.

Recognizing downsides for Google Apps resellers
The market’s general prognosis appears favorable, but Google Apps resellers face a few obstacles. They must still address privacy and security concerns around the cloud, which continue to linger among prospective buyers, said some industry executives. Availability is another issue. Google Docs, part of the Google Apps suite, and rival cloud offering Microsoft Office 365 have both experienced recent outages.

However, Jeffrey Kaplan, managing director of consultancy THINKstrategies Inc., said he believes growing frustration with traditional, on-premises applications is boosting Google Apps adoption, even in the face of setbacks.

“Demand for Google Apps continues to grow despite the problems faced by some organizations,” he said.

More than reselling: Upselling
A Google Apps business can focus strictly on reselling, but a client engagement need not end there.

“Simply reselling Google Apps can provide a modest revenue stream, but the real money and meaningful profits come from offering additional ‘value-added’ services such as upfront consulting, planning and design, as well as integration, training and ongoing monitoring and management,” Kaplan said.

At Cloud Sherpas, services include planning the Google Apps deployment and helping customers migrate from their existing systems. Change management services include preparing an organization for cloud readiness, cultivating sponsors within the organization to spearhead Google Apps adoption, and building and executing a training plan, Gil noted. The company also provides post-implementation support.

SheepDog Inc., based in Halifax, Nova Scotia, sets the groundwork for a Google Apps deployment at its Centre of Excellence. There, prospective buyers can work in a Google Apps environment to get a feel for the suite without disrupting their in-house IT, said Julia Rivard, president and chief executive officer at SheepDog. The early look helps set expectations.

“Once engaged in a project, clients know what they are getting into,” she said.

SheepDog’s migration services vary by customer. The company can backstop clients who opt to take on the full migration, serving as a bridge to Google’s support channels. SheepDog can also manage the entire migration project, transferring data to the Google Apps platform.

NeoNova Network Services, Inc., a managed cloud services firm based in Research Triangle Park, N.C., also wraps services around Google Apps. The company last July became an authorized reseller of the suite, targeting rural telcos. The telcos, in turn, offer Google Apps to their customers as part of a broader service offering.

The telco’s Google Apps business has been geared toward residential customers, but in October, NeoNova plans to launch a Google Apps bundle for small business customers. Chris Benyo, vice president of marketing at NeoNova, describes the small-business solution as a base product package plus add-on services. NeoNova, for example, can provide help desk services, domain registration, training and email migration. The company also offers ongoing training and support once a customer has converted and launched.

“The emphasis is on a fully managed service,” Benyo said.

In addition, Google Apps resellers are bolstering their sales through add-on products. Cloud Sherpas, for example, partners with SecureAuth and Okta for single sign-on. SecureAuth has an on-premises appliance for that function, while Okta is a cloud-based service.

Cloud Sherpas also partners with Esna Technologies, which offers cloud-based unified communications.

Backup is another potential follow-on sale. Backupify, for example, earlier this year launched a reseller program for its backup service for Google Apps.

Benyo said NeoNova plans to offer backup as an add-on service that telcos can offer their business customers. He said NeoNova has an agreement with Google’s Postini Services that will enable it to offer Sarbanes-Oxley-compliant backup for email services. NeoNova expects to add another vendor to provide backup for other elements of Google Apps such as Google Docs, Calendar and Sites.

Google Apps resellers’ target markets
Resellers aim Google Apps -- and accompanying services and ancillary products -- at a variety of vertical markets.

Rivard cited transportation/logistics, retail, real estate, media companies, health care and education among the markets SheepDog covers. Gil said he has seen adoption in most verticals, but said huge opportunities exist in retail, real estate, manufacturing, government and education.

A recent Allied Business Intelligence Research Inc. report suggests the user base for cloud-based messaging and collaboration will continue to grow. ABI reported that 41% of enterprise communications applications users worldwide will migrate to the cloud by 2016.

John Moore is a Syracuse, N.Y.-based freelance writer, reachable at jmwriter4@gmail.com.

Let us know what you think about the story; email Leah Rosin at lrosin@techtarget.com, or follow us on twitter.

This was first published in September 2011

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