As Google turned 10 this week, and the release of its Chrome web-browser gained generally favorable reviews, some began begging the question: has google spread itself too thin? Should a company that has made search and advertising its bread and butter product really be trying so hard compete with the likes of IBM and Microsoft in the enterprise computing space?
The answer is yes. And actually, they should invest more in their web-based software.
Google should be aware of new innovations in the search space, but the numbers just don’t indicate that anyone is gaining serious ground yet.
The investment in Google Apps and other computing endeavors has been pretty modest when you consider the Google cash cow in its entirety. Google has allocated generously to its Enterprise wing so it can build its applications and encourage their adoption in the market, but they haven’t mortgaged their search efforts by any stretch.
If you read the company’s last annual report, its founder, Larry Page, addressed this issue head on and admitted that the company has debated it:
“We are still keeping to our long-standing plan of devoting 70% of our resources to search and advertising,” he wrote. “We debate where we should classify our Apps (Gmail, Docs, etc.) products, but they currently fall into the 20% of resources we devote to related businesses. We use the remaining 10% of our resources on areas that are farther afield but have huge potential, such as Android.”
In fact, far from spreading itself thin, maybe they’ve been too conservative. Before I wrote an overview of the Google Apps software back in June, I drove down to Mountain View and met with Dave Girouard, President of Google Enterprise. When I asked him about how he cultivated relationships with large enterprises, and how that relationship was similar or different than the one companies had with incumbent vendors (such as Microsoft and IBM), he responded:
“It’s not fundamentally different. It’s only different in the fact that, relative to those guys they’re used to, we don’t have nearly the same amount of feet on the street. If you’re John Deere, for instance, you probably have 25 IBM guys and 10 Microsoft guys who think about nothing but John Deere. We’re not at that scale yet. So we don’t have the resources and the size to provide the attention a lot would like to have. At this juncture in the market, when you’re talking about Fortune 1000-sized companies, we have to be selective and careful that we’re spending our energy on the prospects that really want to implement [Google Apps] and move forward.”
Google shouldn’t dump all its money into its cloud computing initiatives, but the overarching philosophy here is clear: despite being a search company, they believe that the fundamental delivery model for computing is changing, where the operating system becomes a utility and the web-browser is king.
Relying solely on search would be costly, if not risky. If there is one thing we’ve learned from incumbent tech companies like Microsoft, it’s that what is your core business today can be just another division of it in the future.