Google exec touts company's fledgling SaaS efforts

by Brian Fonseca

March 12, 2008 —

Matthew Glotzbach, director of product management for Google Enterprise, says
corporate customers still need to become more comfortable with hosted application
delivery before it will really take off. Glotzbach sat down with Computerworld
during the AIIM International Conference last week to talk about Google
Inc.'s fledgling Google
Apps software-as-a-service (SaaS) offering and how the company plans to
compete with traditional application vendors like Oracle
Corp. and SAP
AG and with new hosted offerings from top vendors like Microsoft
Corp.

Are corporate IT managers customers ready to trust hosted products with
their data?

We have tens of millions and hundreds of millions of users who trust us with
their data, be it search history, Gmail or credit card information. It's easy
to believe that our systems for managing and storing data are going to be as
secure, or in most cases more secure, than your average enterprise system. It's
really more of an emotional argument than anything else. This cloud is an intimidating
and somewhat abstract idea. We're quickly dispelling this myth that these cloud
based or services-based applications are somehow lightweight versions of traditional
apps. Because these apps are connected up in the cloud, they facilitate a collaboration
and sharing that is nearly impossible for traditional apps.

How do you get disgruntled packaged software users to consider hosted apps?

Cloud-based applications are just built differently. One benefit is ongoing
maintenance support and upgrades. They're not thought of as versions. You're
not on version 1 or version 2 -- there's a constant stream of updates. From
an IT perspective in a large enterprise, it's even less about the cost associated
with that than it is the hassle. It's difficult to upgrade to the latest version
of some application. You may have customized so much that upgrading to the new
version is nearly impossible. That is definitely one thing we hear a lot. There
are just things you can do in a cloud model that you can't do with traditional
software. On the e-mail front, we give 25GB of storage to our business users
and 6GB to consumers. That's just not something you can do with Lotus Notes
or Microsoft Exchange.

Why aren't hosted products widely used in large organizations today?

One peace of mind that IT departments have when they run things in house is
that they can go look at the servers and hug them. When we move to a cloud model,
there's an arm's length attachment along with all the benefits. You can't point
at the server that's holding your data. Google is one of the strongest global
brands, but you tend to think consumer. One challenge we've had is building
enterprise credibility.

How is Google dealing with that challenge?

Our group's job is to learn from the consumer space and apply it to the enterprise.
It's a myth that the enterprise user is fundamentally different than the consumer.
All users are just people. Users that [deploy] our consumer products are the
same as the IT people we're talking about. They don't walk through a phone booth
and put on an enterprise user cape when they go into work every morning. From
an end user point of view, you'll see 90% consistency between the enterprise
and consumer versions of out applications -- and that's [done] on purpose. We
learn a lot from consumers, and try to drive that ease of use and simplicity.
The enterprise dimension comes into play around administration controls. It's
making our applications organizationally aware. We can make sharing among your
company very easy and straightforward. We can put protections that ensure you
don't share things outside. And there are APIs to integrate with directory systems.

How does Web 2.0 and social networking affect hosted apps?

Social networking is really going to find its home in the enterprise. That's
not to disparage Facebook
or MySpace or our own social
network. But when you think about work and business, it's all about the network.
It's about who you know and who you're connected to. The existence of a social
network and the leveraging of that network is really key as cloud applications
continue to evolve.

What is Google's social networking strategy?

Our open social initiatives are really about tapping into the social graph.
For us, the first very simple incarnation of social networks is embedding presence
in more and more places like calendars, spreadsheets, and applications. The
cloud facilitates that capability. As you move out of disconnected world into
[a connected] cloud-based world, we can build our apps from the ground up to
be inherently social or inherently collaborative.

Are there plans for Google Apps to take on the products of top applications
vendors like Oracle Corp. and SAP AG?

I would never say never but I don't see us having a core competency in enterprise
resource planning financials, or CRM. I don't see us necessarily heading in
that direction.

Are you concerned that Microsoft has put Google Apps directly in its crosshairs
with a new hosted offering?

I don't wake up every day thinking: 'how am I going to beat Microsoft.' Obviously
Microsoft is a competitor and they are the dominant player in the office productivity
space. We do see them in the market -- saying we didn't would be disingenuous.
But we don't make that our focus. It's a really big playing field, there's room
for lots of people -- Google, Microsoft, IBM, startups.

Is Google better suited to host business apps than companies like Microsoft?

The advantage we have is no legacy. We weren't trying to take Exchange and host
it or to take Sharepoint and host it. That's probably one of the biggest challenges
for Microsoft and other vendors. They've got 30 years of a traditional way of
doing things. It's very hard to step outside of that and start from scratch.

What pricing model do you think will be used by SaaS vendors in the long
run?

I think we're going to move toward a true utility model. You only pay for
the power that you use. Yes there may be some connection charge you pay every
month to keep the lights on, but you only pay for what you use. And I think
software as a service cloud computing applications give us that capability.
I see no reason why should you even pay for all users -- you should really pay
for active users.

Computerworld