Google and Its Enterprise Push: Changes Ahead?
July 23, 2013
I read “Google Will Invest More in Enterprise Business.” The story reported, “More than half of Fortune 500 companies are paying for Google enterprise products, and 5 million companies are using Google Apps for Business.” The story added:
Google’s deepening ties with HP could also help it crack into more enterprise accounts. HP is selling a Chromebook and is using Android for two of its tablets. Google and HP are also partnering on SMB IT In a Box, which bundles Google Apps with HP PCs and printers.
One important factoid in the write up was the assertion that Google’s cloud business and its applications business was generating about $200 million in the most recent quarter. Assuming that the figure is accurate, Google is on track to generate about $1 billion from its enterprise services. If the company ends the current fiscal year in the $60 billion in revenue range, the enterprise unit will make up one minute of 60 minutes of Google revenue.
Google may be using its own predictive system to help guide its decision to push into the enterprise. The UK Telegraph reported some interesting information about online ads and user behavior. “Study: Users Don’t Click on Online Ads” said:
An academic study concluded that brand adverts in internet searches have “no short-term bene?ts”, and added that “returns from all other keywords are a fraction of conventional estimates.” Byron Sharp, Professor of Marketing Science at the University of South Australia tweeted, “Google won’t like this”….With much of the web funded by advertising, and more advertising needed to make mobile pay, it seems that web business is becoming even more difficult.
Google has been working in the enterprise sector for a decade, maybe longer. There have been a number of initiatives, managers, and products. Perhaps now that Microsoft seems to be in the midst of some management change, Google thinks the time is right to ramp up its enterprise business? If ad revenue is no longer the sure thing it was, Google and other online advertising firms will have to step up their monetization efforts and probably take other actions users may not enjoy; for example, raising prices. Will Google boost prices for the Google Search Appliance, Google Apps, or Cloud Services?
Stephen E Arnold, July 23, 2013
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