Google going after the enterprise? Please.

Today, the tech blogosphere has lit on fire with Google’s first moves towards offering an integrated online office suite. It’s amazing how many of these pundits completely miss the mark. For example, Techcrunch’s review:

This is a bold move by Google. They are striking hard at a nearly $12 billion/year Microsoft revenue stream. And they are clearly trying to get this out the door fast, in anticipation of Microsoft Office 2007, which will include collaboration features for businesses (as does Office Live, announced last year).

The blogosphere has long been predicting some epic battle between Google and Microsoft; I think they want it so bad they’re letting their imaginations go wild.

Maybe they eventually will go head to head, but let’s take step back, a deep breath, and really look at what Google is offering for a second. When you do, one thing becomes clear: Google and Microsoft are not competing in the office productivity space. They’re similar products aimed at two entirely different market segments.

Google is clearly targeting small businesses. Mom and pop shops. Ones that likely don’t have their own server, might have their own web site they paid someone to do in the 1990’s, and are probably pirating MS Office anyway.

Google isn’t going after enterprise customers, which are Microsoft’s bread and butter. At least not yet. Fortune 500 companies aren’t about to trust a third party like Google with their data, and Writely and Google Spreadsheets can’t come close to offering the functionality of Word and Excel. Instead, Google is going after everyone in the world who pirates MS Office by offering them a legal alternative for the same price. Google’s suite is probably already functional enough for those people.

And Google’s strategy in offering this suite is clear – advertising to these users is incidental; the goal is to convert them into adwords customers. “Hey ma and pa shop – come set up your web site with us (no need to hire anyone to do it!), use base/checkout to sell online, and oh yeah, you can advertise locally with us too!”

THAT’S the billion dollar opportunity here: the long tail of businesses.

And if Google happens to snag a good portion of the market in the developing world that can’t afford Microsoft Office… well, that’s icing on the cake for them.

Tagged: , ,

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: