Upstart Google Apps Looks to Unseat Microsoft Exchange in Enterprise

Think Google Apps are just for consumers and the smallest of businesses? Think Google’s channel program couldn’t possibly offer a business model that works for an IT solution provider?

Tell that to Cloud Sherpas. The Atlanta-based IT solution provider was part of Google Apps' formal channel partner program when Google launched it a year ago this week. Google has since built its partner ranks to 1,000.

Google’s Stephen Cho, director of Google Apps Channels, told Channel Insider that his group’s focus in the year ahead is on building the breadth and depth of the company’s channel efforts. Google provides Google Apps seats to the reseller at 20 percent off the lease price, or $40 for a $50 lease. Resellers own the billing relationship, and they can bundle professional services around the applications or products they sell to customers.

And in the year since Google introduced its channel partner program, Cloud Sherpas has migrated customers from Microsoft Exchange and Lotus Notes and Novell Groupwise to Google Apps' messaging and collaboration cloud-based platform. It has taken enterprise customers that had grown tired of Microsoft Exchange’s licensing fees to a less expensive platform during a year when every penny was counted by company CFOs.

These guys aren’t just some upstarts. Cloud Sherpas CEO Michael Cohn and several of his colleagues came from a traditional IT solution provider background, having worked for a big VAR, Optimus Solutions, in the southeastern United States and also working as part of IBM’s channel marketing program.

“We are channel guys,” he said. But Cohn said he saw the industry moving to the cloud. “I saw CRM take a foothold in the cloud and HR take a foothold in the cloud. We were looking for something more horizontal.” Cohn looked to messaging and collaboration technologies, and when he migrated a personal mail server he had in his basement to Google, he immediately recognized the potential of Google Apps for the enterprise.

Cohn said the hosted Microsoft Exchange offerings on the market in the 2007 and 2008 time frame were very different from Google’s cloud-based model. So Cloud Sherpas reached out to Google before the search giant even offered a channel partner program and became part of its pilot program for channel partners selling Google Apps.

And while the Google Apps solution has been a “no-brainer” for small businesses, Cohn told Channel Insider that he is focusing on midmarket and enterprise customers and is seeing traction there.

“We are starting to see folks from across enterprises, in industries such as health care and city and state governments take a hard look at this solution,” he said. “The sale is getting easier.”

A big part of Cloud Sherpas' business is in facilitating those migrations. Every enterprise has special circumstances and moving the data from one platform to another is always a challenge.

Google Apps currently makes up 90 percent of Cloud Sherpas’ business, and the solution provider also sells complementary technologies to Google Apps.

Cohn, who has worked with more traditional vendors such as IBM, Microsoft and EMC, says that the experience of working with Google as a vendor has provided more of an opportunity to influence the overall channel program. While Google may be a giant of a company, it’s still a beginner in the channel.

“We’ve helped to define the process,” Cohn said. “They’ve been receptive. In my experience in working with some of the other vendors, they’ve got programs that have been around for 20 or 30 years. They have a way that things are done and you conform to it or leave.”

Cohn said that the business model of working with Google versus working with those other traditional IT vendors has been different. It’s based on longer-term growth as an annuity business, and revenues are based on how many seats the company resells.

He believes that Google Apps may be getting past the early adopter phase.

“Multi-thousand seat deployments are happening pretty regularly now,” Cohn said. “People are excited about moving to Google because of all the continuous innovations being delivered by Google Apps.”

And yet, Cohn is familiar with why customers stay with legacy platforms. One of them is the challenge of moving. He said that customers stay on Lotus Notes because Domino is integrated with so many other applications. “They don’t stay because they love the Lotus Notes client.”

Cloud Sherpas recently migrated 250 Lotus Notes users to Google Apps after answering their concerns about their workflow process that had been built on the Domino platform. Cloud Sherpas rebuilt it on Google Apps, doing some application development in the process.

The holes that enterprises have found in Google Apps have created a new business opportunity for Cloud Sherpas and other Google partners. Cloud Sherpas is introducing its Sherpa Tools for Google Apps next week. The company has built software to solve customer problems as it has migrated those customers, and now it is offering that software to customers and other Google partners.

The software includes richer administration functions in terms of managing the LDAP-based user directory. In addition, the tools include an offering for end users that allows them to self-manage their profiles. Sherpa Tools also includes an instant messaging bot that enables users to access their corporate director from an IM client.

The tools are currently available for free download, and Cloud Sherpas plans to add additional functionality over the next few months and ultimately turn on a paid version of the product.

Google’s Cho notes that Google currently operates a solutions marketplace where partners who have service or SAAS product offerings can advertise what they have.

And that’s precisely what Cloud Sherpas and other Google partners plan to do.

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