Google’s Apps Road Ahead: Positive & Negative

Google Apps Premier Edition reseller program is Google global attempt to build a dynamic channel capable of taking down Microsoft unrivaled army of more than 100,000 channel partners in America and hundreds of thousands around the world pitching the Microsoft Office suite.

So the question is around all the hype about the launch for GAPE reseller program, how to compete with the millions that Microsoft has in its slush fund? Money is thrown at suppliers to help with market development, joint marketing programs are developed and teams of technical and sales support staff help you along the course. Microsoft still outspends Google at every step, and this is something that is proven to keep its cash draws ringing with their reseller partners.

Ok so Microsoft can be thought of as the Granddad of the software reseller channel, and they have poured billions over just the past few years into supporting this model. They have even held back products such as Office Live to ensure their partners dont get cold feet and leave!

Bill Gates ensured plenty of channel investment was in place to support their aggressive channel programs, as they understand failure at any point in the channel could cost sales.

Google is probably the worlds best direct marketing company, they have just a handful of partners under its Google Adwords Reseller, Company & Professional program. They have their Website Optimiser Technology Partners, Google Analytics Authorised Consultants & Seminars for Success providers.

Google does have deep pockets, but little support across the channel with most power held by product managers and directors. Google does have amazing technical support and very deep pockets with system such as Adwords in place to drive the sales channel. But with estimates such as over 85% of the Google Apps traffic being driven by Adwords campaigns, is the option for GAPE resellers too expensive online?

So Google Apps sits in the Enterprise team, that is just one step from their Adwords team, so does that mean the joint marketing programs will be easier to administer or will it mean taking from peter to pay paul? Google has massive potential to drive sales to its channel partners, but what happens when some partners dont pick up the leads or customers buy direct from Google?

Im sure that Stephen Cho will do a great job, since the channel is also a new concept to the company, but there will be questions from many companies considering accepting GAPE just to get more leads from Google.

Ok so Google Apps with a full channel is still a small market on their company revenue chart but given the $60 billion in annual sales that it will slowly cut from Microsoft, it looks worth the effort.

Google’s enterprise group is maybe not the perfect location for Google Apps, as the software is yet to be fully intergrated with its Search Appliance business. Google Apps only got access to Google Analytics late last year. So will Google enable their Google Apps customers to closer intergrate solutions such as Google Mini into their Google Sites to bring the solution closer to SharePoint?

With all those points in mind, Scott Campbell of ChannelWeb listed a number of positive and negative points about Google Apps Premier Edition reseller program.

The Positive Facts

1. Outstanding Technology And A Great Product
By nearly all solution provider accounts, Google Apps is a robust, yet simple, platform that is easy to deploy in both small businesses and enterprises. And it’s scalable enough to support a company’s growing needs. Google has done a great job fielding a full-function cloud computing Office productivity suite. Microsoft has clearly held back here in a bid to keep the standard Office productivity suite as a cash cow.

As it stands now, Microsoft is not set to offer Office Web Applications — lightweight versions of Word, Excel, PowerPoint and OneNote accessible through Web browsers — until the next version of Office, which is due sometime in early 2010.

2. The Google Brand
Google has developed great brand in the Web 2.0 world. It is the leader in providing the undisputed best search technology in the world for the Internet. It’s hard to bet against a company whose name has become a verb. No one’s ever said, “Yeah, let me Office it to you.” Google, of course, is attempting to leverage that brand with a Google-authorized reseller logo program.

3. Get Googled
Google plans to include a reseller listing on the Google Apps site, allowing potential customers to find you before you can find them. In the age of Internet searching, that’s a plus for solution providers looking for new business.

4. Recurring Revenue
Recurring revenue is the word for the 21st century VAR. That’s why managed services are hot. Businesses want monthly, predictable subscription billing for all their technology needs, not just Internet and cell phone services. Granted, no one is going to get rich from the $10 profit on a $50-per-user annual fee on Google Apps Premier edition. But, once again, predictable recurring revenue is king and this is a way to get there.

Remember this full cloud computing office productivity suite segment is an area where Microsoft is, to some degree, sitting out until 2010. Bad move, Microsoft.

5. Services Opportunity
You won’t get rich selling the Google Apps software, but make no mistake about it, there is a lot of money to be made setting up the cloud and managing a secure end-to-end, cloud computing environment for customers. Consider that solution provider margins on the standard Microsoft Office productivity suite are also negligible. Services is where it’s at. Services. Services. Services.

The Negative Points

1. Low Channel IQ
Nothing against Stephen Cho, the Google executive charged with leading the Google Apps channel program, but starting a reseller program from scratch is not easy. Expect some growing pains as Google learns what solution providers need.

Google does not appear to have assembled a channel-savvy team as it takes the reseller plunge. Not a good sign when it is looking to build a channel of tens of thousands of partners to go up against Microsoft. Google’s hubris is not something that channel partners are going to appreciate. Some signs of the low Google channel IQ: The search giant has not assembled a partner advisory board, partner conference or regional road shows.

2. No Deal Registration
Google expects solution providers to add their own value to entice customers, but watch your back for someone willing to grab the deal at the last second. Not a good sign given that we’re talking about a $10 margin on a $50 annual subscription fee.

If CDW and some of the other reseller giants get into the game then expect what is likely to be an untenable situation for solution providers trying to get off the ground with Google. They’re spending a lot of time selling, only to have the rug pulled out from under them at the last minute by either a big player, another partner, or even Google itself jumping in and giving the product away for the services opportunity.

3. A No Tier Channel Program
One of the best ways to grow stronger, more loyal partners, is to feed leads to your best and your brightest. Because Google doesn’t know who those companies are yet, some leads may fall to inferior partners. Most vendors have tiered channel relationships for this reason. The more you invest as a partner, the greater your reward.

4. Negative Cash Flow
Google expects to be paid in full for a year-long subscription up front, even if the VAR decides to charge customers monthly or quarterly. With more end users opting for a bill spread over a longer period of time, solution providers must weigh charging in full up front, or ensuring they have the right cash flow to float the business throughout the year until they recoup all the costs.

5. No Distributor Participation
Google expects to significantly increase its number of solution providers in 2009, but it’s missing the boat by not leveraging distribution to do this. For one, distributors have long earned VARs’ trust, which eliminates concerns about channel conflict with Google’s direct sales force. Google already has relationships with distributors for its Search Appliance. Why not expand those relationships?