Google's Search for Corporations
Google (GOOG) may be plowing most of its resources into a scrum with Microsoft (MSFT) and Yahoo! (YHOO) over the hearts and wallets of Internet users and advertisers across the globe. But a small team inside Google for two years has been zeroing in on an entirely different audience: corporate IT departments.
Now, Google's oft-overlooked business group is starting to make some waves. Seeking to expand upon its small business of selling search appliances for corporate intranets, Google in April announced partnerships with a handful of business-software makers.
By hooking into Google's search appliance, such companies as Cognos (COGN), Salesforce.com (CRM), and SAS can bring Google's familiar search functions to business apps that have traditionally been anything but user friendly (see BW Online, 5/03/06, "The Friendly Face of Business Software"). The pairing "makes it easy to bring strategic information to the masses," says Paul Hulford, senior product marketing manager at Cognos, a maker of business intelligence software and one of the first companies to reach out to Google about a potential partnership. "We want to push this out to people who aren't technical."
The linchpin for Google's software partnerships is its so-called "OneBox" function, which has been deployed in recent months across its consumer search engine. OneBox is an attempt by Google to pull out relevant information and answer the user's query immediately above the search results. For instance, a search on Google.com for "Boston weather" yields a box with a four-day weather forecast for Beantown above the typical search results. Likewise, OneBox offers answers for everything from local movie times to stock quotes to images of Pluto.
Google is betting that the simplicity and familiarity of its own features will prompt more corporate employees to use them in conjunction with daunting software tools, such as salesforce-management apps or business-forecasting software. The company will team up with the software makers to develop OneBox answers for such inside-the-firewall queries as "April sales" or "employee retention." The answers could come in the form of images, charts, graphs, or even text.
"Enterprise software apps tend to be very complex, designed for power users," says Dave Girouard, Google's VP of enterprise products. "We want to provide a simplified front door to these [programs]."
The wager could be pivotal to Google's fledgling efforts to become a player inside corporate IT departments. The company began selling a search appliance for corporations four years ago, but hasn't paid the business much heed. In 2003, as Google approached a public offering, executives debated whether even to continue in this market. They decided to stick with it, and in 2004 began bringing in the personnel to lead the team.
Today, Google sells a number of different search appliances for businesses, ranging in price from $2,000 to half a million dollars. The company doesn't break out its enterprise sales, but says the business almost doubled last year. It's believed to account for only 1% of Google's $6 billion in gross sales in 2005. If true, that would still constitute the biggest non-advertising piece of its business -- providing a sliver of hope for investors worried about Google's lack of revenue diversity (see BW Online, 1/04/06, "Google: $600 or Bust?").
Partnering with the software firms can only help to keep this slice of the business growing. "Our customers asked us to make business intelligence available to the masses," says Christina McKeon, global business intelligence strategist at SAS. "This is one way to do that.... Almost everyone knows how to Google."
Google clearly wants to sell more than enterprise search appliances to companies. It is already finetuning versions of Gmail and its desktop-search offering for businesses and universities. Google hasn't yet decided how it will attempt to make money on these enterprise versions of its consumer products. They won't command lofty license fees like its search appliances, and instead may end up being ad supported. "We think we're going to do a lot of very compelling things in the enterprise over time," says Girouard.
Still, Google's wild success among consumers hasn't translated readily into the corporate arena. The company leapfrogged ahead of the competition in 1998 with its unique way of searching the Web. Not only did it scan and analyze the content of pages, it examined the links that connect Web pages across the Internet. In a nutshell, sites that have more incoming links -- for instance, a news story that's pointed to by several other news sites -- are deemed by Google to be more important, and thus are ranked higher in search results.
Inside corporate firewalls, however, the structure of links is far less important. In fact, key information is often buried inside a corporate database or in depths that are even harder to plumb, such as employee desktops (see BW Online, 5/15/06, "Enterprise Search Gets Lost"). So far, Google has been unable to blow ahead of market leaders in corporate search, such as Autonomy.
CONVINCING THE CORPS.
In addition, Google has taken a hands-off approach to selling corporate-search products, offering less in the way of professional services or ongoing customer-support contracts. This has some industry players questioning whether Google has the wherewithal to compete for big-ticket contracts for corporations that often desire such handholding.
"Google is very rudimentary vs. what you would find in sophisticated enterprise search vendor tools," says Robert Shimp, VP of global technology at Oracle (ORCL), which unveiled a secure enterprise search engine in March. "There really is no comparison."
Analysts agree that Google has considerable concerns to assuage before it can become a sizable player in enterprise software. Foremost, the company that has developed a reputation for making information accessible to almost everyone will have to convince CIOs that it's capable of keeping sensitive corporate data secure.Still, Google's affinity with consumers at the very least gives it an edge -- both among IT buyers and potential software partners. In their personal lives, IT managers have grown accustomed to using search engines like Google's, and have come to expect fast answers. Jim Murphy, an analyst at AMR Research and frequent adviser to corporations buying software, says he often hears clients ask why their enterprise software apps can't function more like Google. "They want the simplicity of Google," he says. "I hear that all the time."