The Skinny on Google's New SMB Application Marketplace

Last week I speculated to some impending announcements from Google about application stores specifically tailored to the small and medium business market. Well, readers didn’t have to wait long, Google has just launched what is essentially an SMB application marketplace – A place where (they hope) customers will discover, purchase and deploy integrated third party cloud applications.

The Google Apps Marketplace is a store front aimed at the 25 million individual users that Google apps has across two million businesses. It’s a standards looking web application space that leverages some core facets:

• Central management of application availability

• Universal navigation within and between apps

• Single sign on
• Secure data access via OAuth

In terms of the business details, later in the year Google will be releasing a flexible billing API for vendors to allow them to set their own pricing policies – either way Google extracts a 20% revenue share for applications purchased through the Marketplace.

I spoke with Bob Warfield, CEO of Helpstream who are part of the salesforce.com AppExchange (a similar, yet slightly different, app store). Helpstream acquires around 100 sales leads a month from their involvement with the store. I asked him what vendor and customer drivers there were around involvement on an app store. Not surprisingly, Warfield’s answer showed the bipolar nature of application store involvement:

For a vendor, app stores are all about how much traffic they bring you.  I suspect for buyers, they’re all about how many choices they bring.

It seems to me that Google’s approach is a somewhat limited perspective on what app stores can achieve for SMBs. Platforms (notably the AppExchange and the Intuit Partner Platform (see disclosure) have a much broader set of touch points than does Google’s incarnation. Whereas the other two examples use a broad common data model, Google’s is limited to management at the back end and calendar/docs/mail at the user facing end.

I put this to Scott McMullan, enterprise lead at Google, who expressed the position that Google believes “the web is the platform, and where common data models are typically created” a seemingly more open approach, but one that arguably drives less benefits to end users than a more proprietary, but richer, approach. I spoke to Sunir Shah from freshBooks about this matter and he, unsurprisingly, supported the oepn web view saying:

The reason the Open Web is important is because closed platforms lock small businesses into solutions they may not want with services worse than why the free market provides. The lightweight data structures is how the Web works best: small pieces, loosely joined. Forcing third vendors to buy into a massive monolithic data structure locks them into a smaller market which limits how much they can grow and reinvest resources into innovation.   

Shah was also very positive about Google as a player in the marketplace saying:

I am a big fan of them. Not just for the obvious reasons of their size and market reach but because from the beginning they have put a huge emphasis on building a marketplace the right way. For years they have supported the Open Web movement and helped usher in protocols like  OpenID and OAuth. They have reached out to partners and competitors to involve them in a fair and meaningful way. Moreover working with them has been great. They have been extremely helpful and I just want to give them a public high five for that. 

McMullan’s view about open versus proprietary platforms was that:

We’re [the more proprietary platforms and Google's more "open" approach] both promoting “integrated apps”.  We just tend to bring different types of data to the party to integrate. Intuit has a lot of transaction/finance data, so they’re extending the value of that into other contexts.  We have a lot of collaboration and messaging and user profile data, so we’re looking to make that more useful to users.

This view is, unsurprisingly, borne out by Intuits Director of the Partner Platform, Alex Chriss, who told me recently that the IPP, with its common data model, will be more appealing for SMBs who want a “one stop shop” for their apps. “The simplicity of sign up and sign in and the ability to have data working seamlessly across applications is a very powerful thing” he said.

I also questioned McMullan about The Small Business Web and it’s goal of getting SaaS vendors to work together and publish open APIs. McMullan was positive about the initiative, saying that “I know this group and we like what they stand for.”

McMullan and I talked about app stores in general and for SMBs in particular. I asked McMullan whether there were synergies between what Google is doing and other SMB plays such as the AppExchange or Intuit’s Partner Platform. While not wanting to look too far forward, he was positive about Intuit’s approach saying that “We believe strongly in what they’re doing w/App Center for sure and are fans. Synergies are mainly ahead of us, given we don’t do much together, other than believe this is part of the future for small businesses acquiring software”

It should be noted that with the launch of the Marketplace, Intuit and Google are working together as Intuit has an Online Payroll application already listed.

So… as for the Google initiative. With 25 million users it almost guaranteed that developers will flock to the app store (at launch there are already around 50 applications available). The current APIs available to developers are well proven and hence integration with t
he store should be relatively straightforward. McMullan gave an example of Google apps appearing within Atlassian’s JIRA Studio app
lication (see below) as a useful and efficient use case for users.

Coming up on the road map are what Google calls contextual gadgets – in the same way that Gmail is now automatically embedding YouTube videos with Gmail, so too could application developers chose to have contextual data from their apps embedded in an email – see the image below showing Appirio data within Gmail. This is from a real product “PS Connect” that Appirio are demo-ing at the Google CampFire right now.

All in all it’s an exciting move. The purist in me would have wished for a far higher granularity around data integration points and a richer common data model but notwithstanding that I’m fully confident that Google’s app store will gain significant traction in the marketplace.