Salesforce.com and Google opens more cans of worms

The world and his dog seem in rapture about the announcement that Google and Salesforce.com have tied the application knot and that they've both effectively become channel partners. Phil Wainewright has the most detailed analysis:

Salesforce.com has more than 41,000 customers, including a growing number of large enterprises. It’s now saying unambiguously to all those customers that Google Apps is its preferred productivity suite. The integration is far in advance of anything achievable with MS Office.

He notes Josh Greebaum and my skepticism, critiqued by Frank Gens at IDC who thinks that my criticism of GoogleApps is short sighted:

The objection over functionality, in my mind, is short-sighted, given the track record of success by “good-enough” disruptors throughout the history of the IT industry. Google Apps may be somewhat less stuffed with functionality than those from Microsoft, but they are free - and for many organizations (not all, of course) that will be “good enough”. And does anyone doubt that Google Apps will get better and better, as adoption goes up, and funding goes up?

Functionality does matter. OK - so we all complain that Word and PowerPoint are bloated but I'm not convinced that limited or 'good enough' is good enough in the enterprise context. It may well be good enough for sales and marketing people but what happens when you step outside of those roles? Phil makes the powerful argument that collaboration among customers, colleagues and suppliers can now bring the efficiency benefits many in the enterprise have been aching to see:

The viral effect within enterprises is going to be significant. Once one or two people within a workgroup start sending others links to view and share their Google Docs documents, it’ll reinforce usage of the online apps by everyone in the same group. They’ll also share documents with colleagues in other departments and with partners, customers and prospects, exposing many more to the experience of using Google Docs....

...There’s not even any money changing hands for sign-ups to the free version. It’s just an invisible stream of bits in the ether. Adoption will be mostly unseen, until one day it will suddenly have become too big to ignore.

As a GoogleDocs user, I relish the speed and agility it offers. But it doesn't get away from the annoyances and frustrations I experience compared to what say Zoho offers. Even so, looking through the various demos and online videos Google and Salesforce have done a stunning job integrating the workflows that are inherent in sales and marketing operations. Hats off to them.

Despite the hoopla I remain skeptical. I draw little much comfort from David Armstrong, product and marketing manager for Google Enterprise in EMEA response to mine and Josh's criticims:

When I put those criticisms to Armstrong on Friday, he wouldn’t be drawn, stressing that, “What we’re announcing here is fundamentally a reseller agreement.” Google evidently won’t be rushed on resolving these defects until it becomes convinced of the need, which may put a brake on announcing larger deals.

That's not good enough. Whether any of us like it or not, IT departments that have invested huge amounts of time, effort and money in securing desktops and email systems are not going to stand idly by and let users do whatever they want without exercising oversight and compliance. Salesforce.com's permissioning controls from inside its applications go some way towards that, but IT departments will want to know a lot more before sanctioning a wholesale switch. That re-introduces the ToS argument Josh and I have used although I accept those same arguments will be less of a concern for the smaller business where such matters are frequently overlooked.

Assuming Phil and others are correct about adoption, this then opens up another can of worms around fracturing  suppliers in business critical application areas. IT departments have spent years building relationships with a diminishing group of suppliers in the hope of containing support and maintenance cost. Salesforce.com's support pricing for Google Apps premier edition doesn't exactly torpedo support pricing from elsewhere although it goes some way towards it when taken in aggregate with cloud storage. Even so, other colleagues are less than impressed. Vinnie Mirchandani notes:

Of course, I like it from an buyer economics perspective. But why just target Microsoft? Frankly it should be a lot more competitive against the much more expensive on-premise Oracle, SAP and other products.

But there comes the sobering reality - because Google has so much else going on and salesforce has been more focused recently on its force.com platform strategy, their combined functional footprint in the enterprise has not evolved much in the last year, and absent a few acquisitions will not grow much any time soon. When it comes to vertical extensions their footprint is negligible.

Regardless of what I or anyone else thinks, adoption trumps all opinion. The greatest business inefficiences lie in supply chain processes where internal spreadsheets and email rule. If Salesforce.com recognizes that vendor management is fundamentally no different to customer management then it will be interesting to see what happens to the adoption curve.

People tell me that in five years Google will own the enterprise. I'll take that under advisement. A lot can happen in that time. This is just the first shot in what will become a bloody war. In the meantime, I'm still not betting against the Microsoft war chest even if it is denuded by Microhoo.