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Ever since Gmail captured the imagination of consumers, Google has been trying to push Google Apps to enterprise customers. In spite of some news about problems in their implementation for big customers, it has been gaining traction steadily. The biggest attraction towards Google Apps Email over other systems is the cost. Even though other players like Microsoft and IBM have a cloud strategy, Google’s pricing makes Google Apps very attractive for many enterprises. The Google Apps Marketplace, an ecosystem of 3rd party products and services integrated with Google Apps, makes Gmail even more interesting for these customers.
Sensing an opportunity in the cloud email market, Cisco acquired a company called Postpath sometime back and started offering cloud based email under Webex email brand. Cisco thought that they could use this acquisition to make their collaboration and voice suite complete with email. After rolling out in a controlled manner to their customers wanting to test out the email service, Cisco pulled the plug two days back. They will no longer be investing resources on this service and they will help the current customers move out to another email system of their choice after their contract gets over.
What intrigued me in the Cisco blog post is the reason they have given for their decision to shut down the email service
In the thirteen months since, we’ve been market testing Cisco Mail via a controlled release. The product has been well received, but we’ve since learned that customers have come to view their email as a mature and commoditized tool versus a long-term differentiated element of their collaboration strategy. We’ve also heard that customers are eager to embrace emerging collaboration tools such as social software and video.
It is pretty clear from this post that Google’s attempt to commoditize email has been largely successful and competitors are finding it hard to compete with them on price. As Ms. Chrapathy points out in the post, email is completely mature and commoditized, a factor that can be attributed mainly to Google. Even though Microsoft has woken up to this reality and has started pushing cloud based Exchange service, I have a feeling that Google will ultimately win the race because of the expected success of Android in the enterprise market.
However, Google is having a weak spot in their Google Apps strategy. As pointed out by Cisco’s Ms. Chrapathy, social is fast reducing the role of email in any business. Salesforce.com recently highlighted how DeMatteo Monness, a financial services company, moved their conversation away from email to their Chatter service. We are increasingly seeing enterprises embracing social in their workflow and the emergence of services like Tibbr, Chatter, etc. only goes on to highlight how social is transforming the enterprise landscape for better.
Unfortunately, Google has absolutely no clue on how to execute their social strategy and it is going to hurt them badly sooner than later. With IBM firming up their Social Business vision, the threat to Google’s enterprise strategy is just round the corner. Either IBM (provided they execute their vision properly) or one of the newer players focussing on Enterprise collaboration may end up beating Google if they don’t get their social strategy right. They only have a small window of time to execute on their social strategy and stay relevant in the enterprise space. What do you think? I would love to hear from you on Google’s “Social Challenges” and how they can turnaround.
Related articles
- Cisco kills off Web-based email service (downloadsquad.switched.com)
- Cisco kills off its hosted email product (infoworld.com)
- Google Is Trying To Get Exchange Users Through Backdoor (cloudave.com)
- Cisco Terminates Cloud Email Service (informationweek.com)
- Cisco nixes hosted email: Where does email fit in the collaboration mix? (zdnet.com)
- Cisco ends hosted Cisco Mail email trials (v3.co.uk)
- Cisco sends a recall on its cloud email strategy (zdnet.com)
- Certification program endorses Google Apps resellers (zdnet.com)
- Cisco Pulls Plug on Web Email [Voices] (voices.allthingsd.com)
- Cisco Pulls Plug on Web Email (blogs.wsj.com)
I don’t think you know what you’re talking about. (Links at end of this comment)
You are referring to the “email market” in a single dimension. You are mixing social and business markets, as well as paid vs “free”. There are vast differences in each of those areas.
Google may have won the “free”, social email market. Yahoo and AOL The race for business is clearly between MS and IBM, whilst Google is still playing catch up. Google’s first attempt at an integrated social collaboration platform (Wave), was over-engineered and counter intuitive, alot like what IBM workplace strategy. Although I am not particularly fond of Microsoft I think they will conquer the business space for social collaboration as IBM have a strong track record for poor deployment and screwing things up, and generally making things more complicated than they need to. Which gives a free pass to MS. But to say Google is currently a distant 3rd in the business space and is unlikely to close the gap any time soon.
Go check your numbers before making assumptions.
http://www.networkworld.com/news/2010/092810-google-apps-market.html
http://www.gartner.com/technology/media-products/reprints/microsoft/vol10/article19b/article19b.html
1) I know what I am talking about and don’t rely on media for my information but from talking to actual users
2) I didn’t claim Google won the email market. I have only said it has completely disrupted the market by commoditizing email. Please take a moment to get what I am saying before making immature accusations. Anyone who has been observing this space will agree with me on that
3) If you have really taken time to read what I wrote, you would have noticed that I have put an emphasis on IBM’s execution for their future success on social front
4) Anyone watching the enterprise space know the trajectory of Microsoft and the numbers you have quoted doesn’t talk about the trajectory per se
In the startup community I’ve been surprised at the high rate of google apps adoption. Having touched several dozen startups over the last 6 months, about 75% of them are on google apps. Some of those startups grow up to be enterprises (or bring new ideas into their acquirers). And while google apps isn’t fully mature yet, it’s on a quick trajectory.
You’re right that the “social” angle is google’s weakness here… maybe 3rd party apps in the google apps mktplace can solve that?
One question: what’s the data behind the “expected success of Android in the enterprise market” ? I’m a believer personally, but haven’t seen forecasts or datapoints regarding android enterprise.
Thanks Nils for your insights. I have been speaking to many startups in the cloud space and mobile developers. They are all excited about developing for Android platform. For example, I spoke with Box.Net CEO sometime back and he said they love Android platform because of the way they could integrate Android’s search with their app and give users a seamless experience. I also spoke with some VCs and developers in the enterprise space and they are looking forward to widespread adoption of Android in the enterprise. My usage of “expected success of Android in the enterprise market” is based on these conversations.
I would say that one of the reasons Google has done well so far w/ the email is their ability to continually innovate. In a Forbes article posted by Adam Hartung http://bit.ly/hV8ID7 he points out how Google has consistently demonstrated their ability to grow while companies like Microsoft are defending their business model. But is does look like Microsoft is starting to “get it” but I’m not sure it’s too late. And even if Google’s social skills are not as strong, they know how to continuously add new applications to the market so they will not be stuck with just one core product.
I would like to put forward a thought that “social” in work environment is different from “social” in personal life. Relationship is not bidirectional by default and it is also temporal. For example, you may share an information with me because of a common project. I may not be given access to that information if my role in that project has changed. Also I might share information with you because you are my superior; but you may not. Like that there are many other differences. But as far as I know many attempt to replicate personal social network features. My expectation is that as organizations try to roll out such services, they will ask for changes. Google having a clean slate may be in a better position to develop a more appropriate feature set.
I agree. I would say that if anyone tries to replicate the personal social network on enterprise, they are doomed to fail. It has to be done differently.
I would say that my reason for using Google Apps is integration. All their Apps are connected is a simple and smart way. Maybe Google Apps have few options “in the menu” and less functions, for example Google Doc in comparison with Microsoft Office. But ALL the Google Doc’s options and functions are useful everyday, but is not the same with MS Word or Excel (just 20% of their functions are used by standard users on a daily basis).
We connect Google Apps with Sugarcrm as a whole package for our clients in Spain, that are dynamic NGO’s, private foundations and fresh startup companies with tight budgets, lot of new projects and large teams to collaborate with.