Thoughts on Google's Management Changes

There is a general misunderstanding of Google's current role in the Enterprise. First and foremost, the company already has thousands of Enterprise clients. Including Microsoft and each of the Fortune 10. I don't know what each of these companies spend but Microsoft alone likely spends at least several hundred thousand dollars every month. All of these companies are paying to leverage a SaaS application. Just about every publicly well known Enterprise is already a Google customer. A majority of State Governments are also Google customers. Larry's Enterprise experience is being underestimated.

This is also important to note because Google Apps has much more in common with AdWords and Google.com than it does Office or Exchange Server. Google.com and Adwords run on MapReduce, BigTable, and Google File System - in 2010 Google made massive investments in infrastructure to support these systems. Google.com and Adwords are not the only SaaS applications that run on these systems. Google Apps also runs on MapReduce, BigTable and Google File System. This is the benefit of having an actual cloud computing infrastructure rather than just television commercials.

Google's investments in its core business and systems are also investments in Google Apps. This is how an Enterprise business, while small compared to those with 30 year head starts (duh), can be run profitably. Google Apps profit margins may not rival those of AdWords but they can contribute nicely to the bottom line. Schmidt is not the only Googler with an Enterprise background. You can't help but run into folks formerly of Microsoft, Oracle, IBM, and other "Enterprise-centric" firms. Google Apps already leads the market for hosted messaging at the University level - this is no fluke. (Nor is it because it's free, MSFT's offering is free as well) The next generation of leaders work on the Internet by default, they have no tie to, or thought of, the desktop for broadly adopted applications (i.e. email). Google itself has this culture as do more and more firms everyday. Google Apps and Android go hand in hand - Google Apps is as mobile as Google.com. Google also spent two thirds of a Billion dollars on Postini which has an impressive client list of its own and has been deeply integrated into the Google Apps suite. DocVerse was acquired last year for $25,000,000 and is explicitly designed to integrate Office with Apps. Who was DocVerse? Basically some of the same guys who helped build Windows, Office, SharePoint and SQL Server. Google's first acquisition in 2001 became part of Google Groups - a core component of the Apps suite. Google Apps' Video application is a private YouTube. Apps is not some side project - it is connected to every part of the firm. Another HUGE elephant in the room is consumerization. Everyday another consumer discovers what they can do with Google Apps. They got to pick their phone, what else can they bring to work to make their lives easier? Outlook on the iPad, no dice. Gmail on the iPad, no problem. Excel on that new Mac/iPhone/iPad? Pain in the ass. Google Spreadsheets? Easy as Google.com.

Google Apps makes the world a better place. Google Apps' core is the Web. Google Apps is a global SaaS application. Google's mission is to organize the world's information and make it universally accessible and useful. Google Apps is not out of Google's wheelhouse - it's right down the middle. Mr. Page knows this better than anyone. Break it off to make investors happy? The founders implicitly stated in their IPO they would often make decisions for the long term and/or that may seem strange risks to investors. To the world that runs on Microsoft, Google Apps may look strange. To the college students using Google Apps, Outlook is something their dad uses. Young business owners of today and tomorrow don't buy Exchange Server (nor did it ever cross their mind) - because that would just be strange. We have the Web now. We have Google Apps. It may take a decade for the change to be fully realized but Google Apps is Google's mission.