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Founder of We Wire People, Martijn has 15 years experience in the field of Integration, as an Architect working in and for Enterprises. He mainly advises in case of mergers, application rationalization and Cloud / Social Media back-office integration Martijn blogs at martijnlinssen.com

6 responses to “Does Google get enterprise? No – so what?”

  1. Sandip Dev

    For one, I don’t agree with your contention that Linux focused on the consumer.It was initially a hobbyist OS, then became a server OS and it is still yet to make any significant inroads.

    Also I dont agree that Apple survived because people could visit the Apple website through Google. Thats just way too simplistic, and wholly incorrect, way of looking at the come back of Apple (and Steve Jobs). Without good product, a search engine cant do anything.

    Most importantly,its a completely fallacious argument you are making about economies of scale. Oracle, HP, SAP, IBM and Google are different companies with very different product. For example, Oracle(Sun),IBM and HP are into hardware, Google and S&P aren’t. IBM has a huge IT service business but the rest don’t. You are comparing very different businesses with very different labour and capital requirements. The IT services business or the hardware business has far less margins than something like search or product development. You are comparing chalk and cheese.

  2. Sandip Dev

    Also, ‘getting enterprise’ should be important to Google. With consumer products, your company and its products face a much bigger risk every time you launch something new because building relationships with the end consumer is tougher than building a long lasting relationship with another business. It’s also tough to gauge the requirements of a much larger consumer base rather than a smaller number of enterprise customers where you can even build in customer specific customizations. Bottom line :revenues from enterprise is more steady and predictable. If I were an investor in Google (or Apple) I would be more at ease if it had significant enterprise presence (more so in case of Apple).

  3. Martijn Linssen

    Thank you Sandip – although you do make a few assumptions here

    Linux was targeted as a client OS for sure, there’s no doubt about that
    It certainly wasn’t a hobbyist OS, it was the first open source OS. It was so good that 70% of web servers, mail servers and DNS servers now run Linux (http://en.wikipedia.org/wiki/Usage_share_of_operating_systems#Servers) – you shouldn’t let yourself be fooled by the trick that most “usage stats” measure in revenue rather than units: of course Microsoft wins out on that

    I also didn’t say that Apple survived because people were able to locate their website – you don’t need Google for that anyway

    I took the four largest enterprise IT providers. Btw, HP provides more IT services than the others combined, so again there you’re wrong. Apple sells hardware and software and they also provide services to consumers, so it’s a perfect comparison – and don’t whine about margins when my point is that margins Google makes are hugely better than margins made by businesses who are in the enterprise market

    To get back to my Apple rant: Apple has always sold products that were priced too high, and they created many failures: http://www.wired.com/gadgets/mac/multimedia/2008/01/gallery_apple_flops?slide=1&slideView=9 will give you a good impression of those, oh and did I mention Apple TV?

    With regards to your second comment: who needs relationships? What for? Requirements? Whereas the enterprise market is dominated by customisation, the consumer one is dominated by standardisation

    I agree you are a geek, as you state yourself on your site…

    1. Sandip Dev

      I have been using Linux since kernel 2.2 and even then you had to be lucky to get the GUI up and running on your board.Things improved with 2.4 but the GUI still wasn’t that great. It wasn’t until some of the later releases of Suse, Mandrake and finally the advent of Ubuntu that things started to improve. Redhat made all its money on enterprise and so did Suse(Novell). Until Ubuntu I did not see much attention given to usability in Linux. I don’t hate linux; in fact I founded 2 LUGs (one in my 8th grade). Linux still is pretty much limited to servers and desktop presence in minuscule(sadly).

      Now about the comparison. Let’s take IBM versus Google as an example.Now IBM has a huge Global Services division which is basically IT services. Now profit margins in IT services, a manpower intensive business, cant even compare with something like search which is Research intensive but not manpower intensive. That is why I said the comparison was not valid. Google enjoys both economies of scale and scope. It’s huge datacentres are example of that. It would cost more to host each of the services (like GMail, Search, Google+ etc) separately than it would to host them together. In fact, a friend of mine working at Google datacenter engineering team told me that hosting Google+ was not much of a load on google’s computing resources to the extent that the infra costs were negligible.

      And yes, I know of Apple’s many failures. I am not an Apple fanboy. More like a Google fanboy ;-)

      As for relationships, I could explain it to you in terms of economics, more precisely ‘transaction costs’. For a enterprise, the transaction cost (cost of searching for providers of a particular service, evaluating them, bidding, forming a contract, implementation and other issues) are far higher than those for a single user. Hence enterprises would enter into longer contracts, and would not be as ready to try out new services/products as a individual user. There is lies the challenge for a user oriented company like Google or Apple.

  4. John Wilis

    Great Post…

    The bigger question is why does’t the enterprise get “Google”…

    John Willis
    DTO Solutions
    a.k.a @botchagalupe

  5. Paul Dandurand

    Martijn, respectfully, I don’t think comparing Google with the likes of Oracle, IBM, SAP, and HP is the right comparison to make. Google is in the ad business, whereas, the others are in enterprise software and services business.

    Google’s 2011 Q2 financial reported that 96% of revenue came from ad sales. (http://investor.google.com/earnings/2011/Q2_google_earnings.html). The other 4% came from a category called “Other”. I can only assume that Google Apps fits someplace inside this Other category. It would be interesting to see what percent of the total revenue is generated by Google Apps. And to make matters more difficult for comparisons, Google Apps for SMB (under 250 employees) cannot be compared with the products of IBM, HP, SAP, and Oracle. To be fair we would need to look at the Google revenue from Google Apps for Enterprise and the employees working that space at Google to get a better idea of how efficient Google is on a revenue per employee model.

    Maybe a better comparison is to compare Google with the mass media industry, such as BBC News, or the likes of Facebook and Yahoo!