Google Apps shows some commercial clout with a reseller program

Google Apps shows some commercial clout with a reseller program

Summary: I spoke recently with Stephen Cho, the product manager for the new Google Apps Reseller Program. It's quite clear that Google has learned from its Postini reseller program, from partners like Appirio and Cap Gemini, and from Microsoft's Exchange Online reseller program.

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I spoke recently with Stephen Cho, the product manager for the new Google Apps Reseller Program. It's quite clear that Google has learned from its Postini reseller program, from partners like Appirio and Cap Gemini, and from Microsoft's Exchange Online reseller program.

First, the details:

  • Resellers own the customer. That means billing, first line support, the works.This is in distinct contrast to Microsoft's program for Exchange Online, where partners can sell and benefit from the business, but the Exchange customer would write checks to Redmond.
  • Resellers get 20% margin. That's in the US, anyway. That means $10/user/year. Period. Have you ever seen such price transparency (and low points) in any reseller program? I haven't. The entire term sheet would fit on a 1/3rd of a page.
  • Enterprises can't be their own reseller. They have to sell to at least someone other than themselves. Otherwise, this would be a simple way for a enterprise to whack 20% off the already low $50/user/year cost.
  • Google will provide technical admin support if requested. They won't provide end user support. though. That's one of the value-added services that a VAR can provide.
  • Google won't shut of a reseller's customers, even if the reseller goes belly up. This just makes sense. Google would rather carry the contract and convert the customer rather than see the customer get cut off.
  • The program is specific to Google Apps. It doesn't include other Google products, at least not at this time.
  • The free version of Google Apps is no longer available to companies larger than 50 people. This pivot makes sense, but is yet another indicator that Google is serious about selling email, IM, sites, video, and docs.

What this means for information and knowledge management professionals:

  • WIM #1: Google is serious about making money with Google Apps Premier Edition. It still has a mountain to climb to earn enterprise credibility, but customers like Genentech, Avago Technologies, and a slew of universities can't all be wrong.
  • WIM #2: Google can make money at $40/user/year, which bodes well for the future. If Google were just scraping by at that price, they wouldn't be scrambling a battalion of resellers to meet demand. They can clearly make money at $40/user/year. Take note, email administrators, CIOs, information and knowledge management professionals, and the competition.
  • WIM #3: The Google Apps portfolio will just get stronger. How? Because these are value-added resellers. They have to be 'cuz nobody can live off of $10/user/year. To survive, they will have to extend the application and integrate Sites, Docs, Video, Talk,Gmail, and whatever else Google Gmail Labs dreams up into their own cloud-delivered products. Ipso facto: the ecosystem will invest; the product portfolio will improve.

Disagree? Please comment.

Topics: Software, Apps, Cloud, Enterprise Software, Google

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2 comments
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  • Google for real companies

    Great insight that the interest from the Google
    Ecosystem is driven by a desire to help real companies
    do more with Google Apps and Google App Engine...
    including using Google together with other SaaS
    applications as a platform for supporting entire
    business processes. That's what we do at Appirio...
    check out our prediction that we'll see Google "double
    down" on the enterprise in 2009:

    http://tinyurl.com/7vqoo8
    Appirio
  • RE: Google Apps shows some commercial clout with a reseller program

    GOn the surface, Google's steps seem clear, simple and beneficial to resellers. But are they? I'm not so sure. For example:

    1) Reseller owns the customer - Great! Right? But how many resellers can provide 24x7x365 technical support? Resellers who aren't available to address email problems at 2:00 a.m. will find themselves in a heap of trouble. Then what? The customer storms off to Google who can provide 24x7 support (at a price).

    2) 20% margins - Sure, Google can survive on $40 per user per year because of their massive scale. But can resellers survive on the $10 a year per user? I suspect Google doesn't think so - or really care. (Note their willingness to take on customers if the reseller goes belly up)

    All of this raises one simple question in my mind: Are the steps that Google is taking going to help partners thrive and survive in the long run? I'd argue they don't. Beware resellers. Beware.
    charlesvar