Google for enterprise: my $500 bet

Robert Scoble believes that Google is making a run for the enterprise and that over the next five years will grab at least some share of that market, specifically in email. He might be right but I'm willing to bet $500 that he's wrong. This is what I see as the core of Robert's argument:

Enterprises will never move wholesale over to Gmail and Google’s other offerings. Users just don’t like that kind of change. There would be revolt at work, if CTOs tried to force it. But this way a CTO can let his/her employees use whatever systems they want and still have them synchronized. And there ARE major reasons to move to Gmail: Cost, for one. I also am hearing that Gmail’s email servers use far less electricity per mail than Exchange’s do. Environmentalism anyone? You think that’s not important for CTOs? It sure is. Both are going to be major drivers that will get Google’s offerings paid attention to.

Never is a long time so I wouldn't use that term. Here are some of the reasons is why I think Robert is off base:

• Why would an enterprise worker care when all the signs are that email is becoming increasingly despised? Check Luis Suarez valiant efforts to wean himself away from email. Isn't the broader question which forms of communication will dominate into the future? I'm thinking that a Twitter variant will provide significant value that you can't get from email. I'm also thinking that current development by Lotus Connections, SocialText, HiveLive, Jive Software, Wordframe, Nuoscope, RedDot, Alfresco, Newsgator and about 30 other companies is way more valuable than Gmail or Outlook. And that's before we start to think about what Sharepoint might bring to the table.
• What's the point? Email is but one productivity tool among an emerging suite of tools where people require more than email. Enter Duet, the partnership between SAP and Microsoft that gives people a reason to stick with Outlook by integrating email to process activity. That's a very powerful point of stickiness.
• The budget for email is so small in relation to the total IT budget, it is hardly worth the effort. In large companies, it is possible to negotiate the price down significantly so simply throwing out the cost angle doesn't cut it. Check Phil Wainewright's post for a deeper discussion on this topic because if you think the fractional cost of the software is the only angle then you'd be way wrong. When viewed in this light, there is no incentive to switch.
• The environmental angle is interesting but again, IT has much larger fish to fry than worrying about the gas an Exchange server uses. Rather, they're more likely to call up HP and see what they're doing in virtualization to drive down operating cost. Despite the attention given to all things green, sadly I see little appetite to take 'green' seriously.
• Google is an ad-driven business where everything else takes second place. The net result is that Google has yet to demonstrate any serious commitment to finishing off application functionality that comes close to the maturity of incumbent alternatives. Where for example are the Gmail roadmaps that will give the CIO comfort?
• Does Robert seriously believe that Steve Ballmer is going to sit idly by and watch Google attack its installed base without a considered response? Robert says that Ballmer is handcuffed. Not true. The incremental revenue loss from giving away Outlook or heavily discounting Exchange (beyond existing levels) would be a blip in Microsoft earning. That's because Microsoft has a lot more product firepower to call upon than email.
• The most frequent argument put out is that Google will make a serious dent in the SMB space. At one time I would have believed that to be true but today I am less certain. While software acquisition cost plays a factor, we can't rule out the cost of convenience. Outlook is part of a larger, integrated view of communications where Gmail doesn't come close. Neither do any of its other productivity tools. I've tried pulling Gmail, Google Reader and GCal together via iGoogle. It kinda works but is ultimately inconvenient. If Google works on this problem and shows the roadmap for getting there, I might think differently. Right now I don't see the signs but then I'm not as close to Google as others so any input here is welcome.
• Google's attitude to privacy is something of an Achilles Heel. Regardless that we're all being indexed by the Google cloud, the company hasn't shown serious commitment to resolving questions about business data privacy in a way that sells itself to the enterprise. Most recently, Steve Gillmor argued that Google is going through its 'Microsoft period' of arrogance. He may be right and taken with privacy concerns, I have to ask what business person is going to take the risk with business sensitive data.

All these concerns could be worked out over the next five years such that Google presents the challenge Robert claims. But that assumes everyone else stands still. That isn't going to happen. Certain vendors are sharing their five year roadmaps with me and if what I've seen is delivered then the email question will have faded way into the background by then. Call me a fool, but that's why, when Robert asked if I am prepared to bet on it and I have offered to put $500 in escrow. As at the time of writing, I'm awaiting a response.