Google for enterprise: my $500 bet

Google for enterprise: my $500 bet

Summary: 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.


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.

Topics: Collaboration, Browser, Google

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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  • Scoble is going to lose...

    For sure Scoble is going to lose the Bet... in a short time mail will evolve and the system that we know know will be obsolete. I have my vision, but Google will have a long and hard road to keep surviving. Also I don't think that Scoble is the best to make foresees, he was going to cry for Microsoft World-Wide Telescope (great product but not great enough to cry)... also I have to say that no-one should do foresees because internet evolve in unexpected ways.
  • RE: Google for enterprise: my $500 bet

    If I had the money to put in escrow, I'd join you on this one.

    One of the things I think that Scoble isn't tapping into as well is the concept of data control.

    Having spent a bit of time in the Enterprise world (for JD Edwards prior to the PSFT buyout, prior to Oracle) I'm familiar with the psychology of the standard Enterprise user - and s/he isn't going to put that sort of thing under the banner of a company that s/he has no control over.

    Especially if there's the idea that someone might have access to both their company's data AND that of a competitor.
  • RE: Google for enterprise: my $500 bet

    Hi Dennis. I think you're more likely to win than Scoble,

    There are a few important things neither of you touch on,
    and they relate to talent coming into your business.

    If, say, you're a big bank, then today you are bringing
    young people into your organisation that are far more
    technologically savvy than your existing staff - they use all
    kinds of tools to collaborate and organise stuff as students
    or wherever. But right now you put them on a load of
    training courses to teach them how to use tools that are
    actually far less intuitive, have less functionality and are
    ultimately less collaborative than what they already know
    and use. This is a big contrast to, say, ten years ago when
    most staff were trained to use tools that made them more

    If you're a bright young thing are you going to stand for
    this process? Sure, if someone's gonna pay you to sit on a
    course that teaches how to do something less well than
    you already can. But in the end, you'll probably still
    shortcircuit it all and introduce your own tools to your own
    networks of colleagues.

    I think the best bet is we'll start to see technology
    subcultures - underground movements - begin to grow
    inside enterprises. The smartest companies will learn how
    to foster them while ensuring they stay within regulatory
    limitations, etc. Often the new tools expose bad practice
    much more quickly than the established tools, which is
    surely another reason companies should embrace them.
    • I could have...

      ...made that element clear but as I've said in other posts,
      the problem of the 'greasy pole' still exists. I do think
      though that communications evolves regardless of those
      who come into the workplace so it may not matter about
      the Gen Y'rs. I'm seeing a lot of really interesting stuff in
      that area.

      Subcultures may grow but remember that what we've seen
      in the past isn't necessarily the way things pan out in the
      general workplace. Denial of access to Port 80 alone could
      scupper attempts.
  • Define "enterprise"

    How large does an organization have to be for it to qualify as part of the "enterprise" market?

    I think Google could easily take a chunk of the SMB market, and a big piece of the educational market.

    I don't think we'll see GMail in the Fortune 1000 anytime soon.
    Erik Engbrecht
    • You're right

      ...and of course Scoble doesn't make that terribly clear (any
      more than I do) but the implication is there and I do
      believe Schmidt has such a personal hatred for MSFT
      following what they did to Novell that he will do almost
      anything to get some sort of victory in that area.

      I do however believe that people won't be using much
      email in the future and therefore it becomes a moot point.

      Google has a long way to go to convince even the most
      liberal of thinkers. I'm speaking from experience.
  • RE: Google for enterprise: my $500 bet

    You are right and Scoble is wrong.
  • Use Thunderbird to pull Gmail, RSS and GCal together

    Now that Gmail supports IMAP, I use Thunderbird with a Lightning plug-in and it works great for Gmail, RSS, and GCal.
  • A risky bet if "some share" and "enterprise" are undefined

    Obviously Google uses Gmail internally to run a $15B+ business so getting them to convince "some" enterprises to adopt Gmail might not be an issue and that can lead to "some share" in 5 years.

    While I don't completely agree with your assumption that email will be highly marginalized in the next 5 years as a mode of corporate or enterprise communication that it wont matter. I do agree with the statement that something like Twitter which is more short burst might augment it.

    What if there is a twitter client for email that within an enterprise or even in the extraprise allows you to leverage your email infrastructure to do Twitter like communication? Now that might be more interesting for enterprises who currently dont see much adoption value in Twitter as it is today.
    • True but...

      I agree there is a risk and you are right to question the definition aspect. The reason I put out the money (Scoble asked if I want to bet) is that I believe there are a bunch of factors that weigh in my favor under most scenarios. I have therefore taken the Gartner 0.8 probability theory and put it where some money is.

      I've outlined some of those factors which is rather more than the blanket 'Google has won' arguments I hear every day when the evidence is entirely to the contrary. It's part of the joy of parsing reality against some of the things I see in the suspended reality that passes for Silicon Valley.

      I also agree that having seen Twitter in different guises, there are all sorts of scenarios that could play out. None of which involve email.

      Finally, the time horizon is pretty good. It gives time for all players to take positions and in that context makes for an interesting gamble.

      On the question of the money - I'd recommend winner gets to choose the charity of his choice.
  • RE: Google in SMB space

    I tend to deal mainly with SMBs and agree with your assessment. Despite apparent disadvantages, the Microsoft arhcitecture and roadmap has been accepted by a large majority of these companies.
  • RE: Google for enterprise: my $500 bet

    If someone makes a market in this wager, I'd like to take Dennis' side of the bet as well.
  • What Garbage! Scoble I'll add another $1,000

    The deluded and misguided fans of the Google and Salesforce hookup who seriously believe this will make a dent within Enterprise are addicted to Google press releases and obviously living on another planet!

    Scoble I'll add another $1,000 to that bet and I can't wait to come back each year for the next 5 years and see the look on the faces of these people! I have seen the same sad predictions from the Linux and Open Source fan boys for the past 5 years and Windows Server grows and grows......