Google`s Incomplete Channel a Work in ProgressBy Lawrence Walsh | Posted 2009-08-24 Email Print
Google admits that it needs resellers and industry partners to keep its high-flying revenues soaring. Channel programs launched around Google Apps and search technology promise new opportunities for solution providers, but some feel firsthand how Google’s channel efforts remain largely incomplete.
Perhaps nowhere else than the education market does Google Apps enjoy a distinct advantage over Microsoft Exchange—hosted or on-premises—in that it’s free. But free doesn’t always mean superior manageability, and many institutions have discovered provisioning and managing Google e-mail accounts is more than challenging.
Data Technique, a solution provider based in Pittsburgh, Kan., partnered with an independent software developer to create a shim to integrate the free Gmail platform with Novell’s eDirectory to provide a scalable, efficient means for creating, provisioning and managing student and faculty accounts at large education institutions. Since the initial implementation, Data Technique has improved upon the shim to make it more commercially viable and has begun marketing it to other schools.
The one problem, says CEO Terry Calloway, is that Data Technique is not a Google Apps partner and is having no luck connecting with the search engine to join the developer and reseller program.
"We’ve applied twice to be a developer for Google and be listed in the program, but got no response," says Calloway. "We don’t have any problem in wanting to partner with Google. We’re willing to pay the $5,000 developer fee, but we can’t find anyone to approve over there."
Despite its size and success in its short lifetime, Google is a relative neophyte in the channel. The vast majority of the company’s $22 billion revenue stream comes from its AdSense search engine marketing program. Search appliances, applications and Android mobile operating system represent a comparative fraction. Revenue from resellers and solution providers is miniscule.
Google’s channel maturity is reflected in its reseller Website. While many vendors’ partner portals and Web pages highlight the benefits of being an authorized reseller, provide testimonials of existing partners, list executive leadership and provide contacts for joining the program, the Google Apps’ partner page is just slightly more populated than the Google home page.
Unconventional and evolving is perhaps the best way to describe Google’s approach to developing its 2-year-old channel program. Paul Slakey, head of the Google Apps channel, tells Channel Insider that Google is taking an iterative approach toward working with solution providers and not following the well-worn traditional trail blazed by companies like Microsoft, IBM and Hewlett-Packard.
"We have a relatively small sales force, so the idea is to go out and make a lot of friends that can help us make the most of this large opportunity," Slakey says.
The stakes are high. Google Apps, Zoho and other Web-based applications, and a raft of open-source apps are pressuring one of the great cash cows at Microsoft—the vaunted Office suite. Office represents 90 percent of the revenue in Microsoft Business Division, which saw a 13 percent decline in revenue in the company’s last fiscal year and contributed to Microsoft’s first financially bad year in its 33-year history.
Microsoft is countering threatening cloud apps with online versions of its popular applications, including Word, Exchange and SharePoint. Microsoft calls its cloud strategy "Software+Services," which subscribes to the notion that businesses will always have some on-premises applications while utilizing Web-based applications. In this scheme, Microsoft says solution providers can make money through integration and customization services.
Google’s approach is similar, although it offers larger margins (20 percent compared with 12 percent offered by Microsoft). Google isn’t interested in the on-premises applications, believing that the migration of the data center to the cloud is irreversible. "We want to make it easy for people to host their applications in our data center and to deliver cloud applications," Slakey says.
How Google approaches cloud computing in the channel is somewhat similar to the approach of Salesforce.com; partners can resell the hosted platform but they make most of their money on the unique value proposition of their own products and services built on the Google platform. That often requires a different approach to market and level of commitment on the part of the solution provider.
"If someone is looking at this as a margin-based opportunity, they’re missing the opportunity of all the things that you can do with cloud computing," Slakey says.
One such company making an investment in the Google philosophy is DLT Solutions, a large integrator in the federal government channel. It recently partnered with Google to integrate enterprise search, Google Maps and spatial applications into systems used by government agencies.
"Google knows search engines and ads, and that’s the machine they’re built on, but we’re pretty bullish on their enterprise search and geospatial options," says DLT CEO Rick Marcotte.
While other vendors provide similar technologies and applications, DLT sought a partner where it could be either the No. 1 or 2 reseller and maintain a relationship of importance. "We want to place our chips down on companies we want to do business with, and Google was a safe bet compared to some of the other companies we looked at."
Capitalizing on the cloud computing trend and the Google platform, Slakey says, requires new ways of thinking. He rattles off a list of partners and next-generation partners such as Appirio, Cloud Sherpas and Sada Systems that are embracing transformative business models to build and deliver cloud computing solutions.
Slakey says conventional IT vendors may have well-worn channel programs and cloud computing ambitions, but the old models may not work in the future Web-based application and infrastructure world. But he equally admits that Google doesn’t have all the answers for how to deliver a channel program for cloud computing.
"We’re learning, and it’s iterative," Slakey says. "That’s what we’re doing with the channel. We’re getting better at it."
In the meantime, Calloway is still waiting for Google to return his call. But he’s not waiting too long. He’s going to market with his creation with or without Google. "I guess they’re so damn busy over there because they’re growing so fast," he says apologetically.