Martin Veitch (UK & Ireland) - Interview: The Elephant On Microsoft's Table. Google Enterprise's Thomas Davies On Changing The Face of Business IT

Google’s vaunting enterprise ambitions have always been obscured from view by the little matter of the cash mountain it has accumulated from search and advertising but its success is becoming harder to ignore as more and more big-name companies sign up for its growing array of services. Be afraid, Microsoft, be very afraid, because the elephant is sitting on your table and it is staring at your lunch.

Despite what sounds like a hectic week of late nights, Google Enterprise UK and Ireland Thomas Davies is the embodiment of enthusiasm when I meet him at Google’s offices in London’s Victoria. Little wonder, as the company is on a bull run. A few years ago, Google was nibbling at the edges of Microsoft Office, Exchange and SharePoint and had a good story to tell in discovering information held within businesses with its Google Search Appliance yellow boxes. But anyone following the companies B2B efforts could recite the big Google wins on not much more than two hands and you sometimes got the impression that this was more an exercise in purchasers’ cost cutting or desire to keep Microsoft salesmen’s pencils sharp. Today that picture is outdated.

Google Apps might have been a Trojan horse back then but today Google is storming the gates. Notable accounts such as Rentokil Initial, Jaguar Land Rover, Telegraph Media Group and Guardian News & Media could with justification be described as pioneers or ‘early adopters’ to use the term made famous by Everett Rogers’ book Diffusion of Innovations. Today, as Davies rightly notes, we are in the ‘early majority’ phase as a steady flow of big names such as Nintendo, UK broadcaster ITV, recruiters Randstad and Hays,  Japan Airlines and a host of others are joining the party. In other words, Google is becoming part of the business infrastructure landscape. The banner brands will encourage relative laggards, but just as important are the education and small business users that will be the first generation brought up on cloud services and the future giants of business.

Look at some of the numbers. Fifty-eight per cent of the Fortune 500 are using Google Enterprise products. Seventy-two per cent of the top 100 US universities are using Google Apps for Education. Five thousand companies per day are adopting Apps. Malaysia is deploying 10 million instances of Apps for students, parents and teachers, many of whom will also run Chromebooks. Search Appliances are run by 35,000 organisations.

Obviously, many of these companies see the dangled carrot of 30 to 70 per cent cost savings as a reason to switch to Google Apps. But Davies says something more profound is occurring:

“If you take advantage of these services and the democratisation of IT tools you become more competitive and disruptive. CEOs say their value chain is being disintermediated and they’re seeing significant loss of revenue because competition is smaller and nimbler. Blockbuster got beaten by LoveFilm and Netflix and those companies’ distribution models are completely different. So CEOs are putting their focus on becoming more competitive through customer service but if you can’t get long-term innovation and idea generation into your company you’re going to struggle.”

Buyers aren’t just buying tools but an ethos that will drive employee satisfaction and opportunity.

“In the ITV deal, very little of that was management of cost… savings were just a by-product. ITV created a digital workplace by working with Google and Apple. [Chief executive] Adam Crozier is making employees feel engaged and valued, better and more productive. That’s typical; companies want a partnership for five to 10 years. Employees want to work the way they live and collaborating effectively breeds innovation.”

Google’s far-reaching ambitions go even beyond search, productivity, computers, messaging and collaboration.

“If I were to put a big bet on where we expect to see growth, it’s Compute Engine,” Davies says, referring to Google infrastructure-as-a-service play that competes with Amazon’s EC2.

If Google can show better reliability and availability than EC2 that is yet another huge market to address. And then there’s the opportunity for Nexus tablets, geo-commerce (using Google Maps and Earth services for asset tracking, for example), BigQuery for analysing large data sets, the Quickoffice app for editing Microsoft documents… The list goes on.

Google (rather puzzlingly) does not break out numbers for Enterprise but it’s clearly a significant growth area and a conservative estimate based on reading between the lines of public information would be that it is a billion-dollar business that is still in hyper-growth.

Davies paints a picture of a world rapidly changing and where new technology is totemic of a new mind-set and attitude to IT and innovation.

“Companies today are tired of the old licensing models and 12 to 18 months ROI. Fewer companies are signing enterprise agreements, even as renewals. Gaming companies are releasing new services every two weeks and business operates at a completely different pace.”

That could spell trouble for segments such as old-school system integrators and outsourcers.

“I rate Atos and its CIO advisory programme; they’re very customer-centric, but we’re working more with the cloud service providers and cloud service brokers: Cloudreach, White Stratus, StoneBurn and companies like CloudLock that are not afraid to do a piece of work and move on. I struggle to see the value of [traditional consultants] and in the long-term we’ll see some fallout, especially among mid-cap system integrators.”

Davies also believes that the new realties will drive organisational change with more chief data officers and transformation specialists, and the rise of CMOs and line-of-business IT buyers. He says that Google sells to the board but insists he is not among those predicting the demise of the CIO. “We don’t bypass the CIO but we always talk to the board and the perfect situation is if the CIO is on the board,” he says.

There’s also a bullish attitude towards deployment with Davies saying that toe-in-the-water approaches are now being replaced by “wholesale” projects with more users coming on board faster. He also insists on having potentially sensitive conversations about security and privacy upfront at the beginning. “They’re key, so why ignore them and lose late?”

Of course, Google still has a lot of work to do. Microsoft remains a formidable foe and is executing well on Office 365 and other cloud services. A risk-averse tranche of CIOs still have not got their heads around cloud and there are still arcane regulations that prevent some organisations from adopting cloud without red-tape workarounds. Also, many organisations are learning the hard way that the notion of plug-and-go cloud services is too good to be true with single sign-on, feature depth, offline capabilities and integration with legacy all still offering some interesting challenges. And of course there will still be many that suggest that Google is attempting to keep too many plates spinning at the same time.

But Davies is nothing if not confident.

“We’re not worrying too much about Microsoft or IBM or any of those companies,” he says. “The challenge will probably come from the next two guys working in a college room but it’s a great time to be here doing this. It’s a once-in-20-years opportunity.”

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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