Google eyes the enterprise

Ask manufacturing executives what Google does for them, and the answer typically is Internet search. And while some information workers know Google as a provider of office productivity software under a Software-as-a-Service (SaaS) model, few think of Google as a player when it comes to the type of enterprise software that does the heavy lifting in running business operations.

02/01/2009



Ask manufacturing executives what Google does for them, and the answer typically is Internet search. And while some information workers know Google as a provider of office productivity software under a Software-as-a-Service (SaaS) model, few think of Google as a player when it comes to the type of enterprise software that does the heavy lifting in running business operations.

But Google is taking aim at the enterprise. Its search technology has been bundled for enterprise use, and its Google Apps suite of office software is making corporate inroads. Still, Google has a long way to go to be seen as a real competitor to ERP and applications vendors that have for decades provided the financial, procurement, and production management systems that run an enterprise.

There are good reasons to doubt Google’s chops as an enterprise vendor. Google focuses on office and collaboration software, and on its own, simply doesn’t have the type of industry-specific applications that other vendors can offer.

What’s more, Google lacks the decades of experience that rival Microsoft Corp. has in merging office productivity with industry-focused applications. But all that could change as Google continues executing its enterprise strategy—one that depends heavily on partnerships.

For one, Google worked with SaaS-based CRM vendor Salesforce.com to merge Google Apps with CRM processes, much like Microsoft and SAP have done with their Duet solutions.

Google’s work with Salesforce.com around cloud platform interoperability also opens up the world of Google Apps to relatively easy integration with supply chain solutions other vendors have built on Salesforce.com’s platform.

Partnerships such as these represent the start of a cloud-based applications ecosystem that could shape up to be a force in the enterprise software market.

In particular, Salesforce.com has a cloud platform it calls Force.com, upon which supply chain-oriented vendors such as Firepond and SupplierSoft have built their SaaS offerings.

“Fundamentally, we view any Salesforce.com partner as a good candidate partner of ours, and we’ll continue to pursue the open, Web-based approach to partnering and integration with these vendors,” says Scott McMullan, partner lead for Google Apps. “The Web is our platform.”

For J. Hilburn , a Texas-based direct-to-consumer maker of custom men’s apparel, Google’s ecosystem potential isn’t top of mind, but the ability to scale office software to a rapidly growing employee base is.

“The ability to scale [Google Apps] at low cost is pretty unbelievable,” says Veeral Rathod, cofounder and president of J. Hilburn. “We went from five accounts 12 months ago to about 200 now. You just have to go online and sign up. You don’t have to worry about adding more servers, or performance slowing down.”

Cloud takes shape

Google and Salesforce.com are shaping up as leaders in the cloud-based computing paradigm, so-called because the IT infrastructure for such solutions lies totally within the Internet “cloud,” accessible to users via broadband Internet connections. True SaaS-based vendors also differ from the application service provider (ASP) model that’s been around for many years thanks to a concept known as a multi-tenant architecture.

With a multi-tenant architecture, a SaaS solution can be configured to match a company’s needs. The configurations are stored centrally much like data tables in a central database, leaving the software itself pure and consistent.

“Multi-tenant allows for economies of scale for the vendor, while enabling easy configuration of the solution for the needs the customer,” says Balu Sharma, CEO of SupplierSoft , a vendor of SaaS-based supplier management software.

SupplierSoft’s solution set—which spans functions such as product compliance, supplier audits, corrective & preventative action, and supplier contacts and contracts—was built on the Force.com platform. According to Sharma, the platform gave SupplierSoft a complete development and operating platform.

“We don’t have one line of code that was developed outside their platform,” says Sharma. “It all sits on their servers and resides on their platform.”



Via partnerships, Google's potential in the enterprise extends beyond cloud-based office applications to an ecosystem of richer business applications - some with vertical-industry appeal.

Last December, Salesforce.com and Google announced Force.com for Google App Engine, a set of tools and services that makes it easier for third parties to build new solutions that can merge with functionality from either platform. This is in addition to the integration partnership Google and Salesforce.com had in place that allows Google Apps to merge with CRM processes.

Another cog in the cloud computing machinery is the alliance between Salesforce.com and Amazon . In addition to the huge Web computing infrastructure Amazon built for online retailing, it also factored in capacity and expertise in Web services. In November 2008, Salesforce.com and Amazon announced Force.com for Amazon Web Services so that developers can tap the Force.com platform for application development, and use Amazon’s Simple Storage Service (S3) and Elastic Compute Cloud (EC2) for storage and computing.

Already, as Bruce Richardson, chief research officer with Boston-based AMR Research noted in a recent column, start-up vendors such as Zuora —which has a solution for handling billing and payment processes in subscription businesses—are using this combination of Force.com and Amazon as a cloud infrastructure.

Not there yet

High-profile partnerships not withstanding, the ecosystem that Google is aligned with isn’t ready to tackle myriad vertical-industry functions.

As Google’s own McMullan acknowledges, “We don’t have any manufacturing-focused solutions in the marketplace right now,” adding, “Our approach is to partner with domain experts that are pursuing a cloud-computing approach.”

Google may find such partners among vendors that built on Force.com, which number upwards of 50 vendors. Sean Whiteley, senior director of applications for Salesforce.com, says already CRM, collaborative applications, and solutions for most business functions are available via cloud computing. He also points to consulting firms such as Appirio that can help enterprises integrate cloud-based solutions with data and processes from more specialized industry applications or legacy systems deployed behind firewalls.

“Cloud-based computing and legacy systems will coexist, much like mainframe systems do today with client/server or N-tier-based systems,” says Whiteley.

For J. Hilburn, the company is in the process of deploying a SaaS-based CRM, accounting, and inventory management solution from ByDesign Technologies . Rathod was attracted to the solution because it’s SaaS-based and focused on direct-to-consumer businesses. Integration with Google Apps wasn’t a major consideration in CRM choice, says Rathod, though he expects it will be possible to merge some Google Apps functions with the solution once J. Hilburn establishes its CRM processes.

While Google Apps holds appeal for start-ups like J. Hilburn, it is gaining traction among enterprises via small-scale testing of the applications at a departmental level. Some enterprises, such as biotech manufacturer Genentech , will roll out Google Apps on a broader basis.

Meanwhile, traditional office software is deeply entrenched in manufacturing, with Microsoft Excel being used for everything from Six Sigma measurements to factory scheduling. Google Docs supports viewing of Excel attachments, but for Google to be a more complete alternative to manufacturing enterprises, its partner ecosystem will at some point have to face off against SaaS offerings from vendors with deep manufacturing expertise, including SAP, QAD , and Plex Systems (formerly Plexus Systems), to name a few.

SupplierSoft’s Sharma, who has been involved with manufacturing solutions since the 1990s with companies such as factory scheduling pioneer Thru-Put, concedes it will take time for a fuller solutions ecosystem to take shape under one compatible cloud, but he is confident it will.

Says Sharma, “Eventually all types of enterprise software will be available in the cloud, and we’ll be just one in a network of vendors within this ecosystem that will allow enterprises to completely manage their businesses with cloud-based computing.”



Zoho “IT for the SMB” gets deep into apps

Google is a household name for search. Now it is attempting to make a name for its Google Apps office software, but it isn’t the only vendor offering office software via a Software as-a-Service (SaaS) or “cloud computing” model. Competing with Google when it comes to office and collaboration apps via the cloud is Zoho , a division of AdventNet , a vendor of IT operations management software.

The Zoho moniker is derived from a twist on the small and medium business (SMB) markets the company targets, says Raju Vegesna, evangelist for Zoho. While Zoho’s office and collaboration applications are offered via a cloud-computing and subscription model, much like Google’s, Zoho also offers a lineup of “business apps” such as CRM, invoicing, project management, and human resources.

“We want to be the IT department for SMBs,” says Vegesna of Zoho’s product depth, which he claims is about 50 percent greater than those offered by Google. “To be the IT department, you need to offer a broad and deep suite of applications.”

Besides breadth that spans into business software like CRM, Vegesna says Zoho also offers deep office productivity functions, such as support for pivot tables in its spreadsheet, and Visual Basic macro capability. While only 20 percent of users in a company might need such advanced functionality, a SaaS-based office suite can’t completely meet the needs of SMBs if it doesn’t offer the richer functions that companies are used to having, Vegesna says.

Zoho’s office applications are free for up to the first 10 users in a company, and its CRM is free for the first three. Vegesna says this creates a pull model in which the apps are tested in small groups, and later deployed more widely under a subscription.

Vegesna says the company is racking up 100,000 new users each month under this pull model. This growth and the ability for users to create their own Zoho applications with a service called Creator—as well as user blogs—is yielding a large and active user base.

Some of this user idea exchange has led to criticisms that Zoho is addressing, such as the need for tighter integration between its applications, says Vegesna. For instance, the company is working on merging its office apps with its CRM functionality. It also released an online integration utility called Zoho CloudSQL that allows developers to use the SQL language to interact with business data stored across Zoho Services.

CloudSQL could be used, says Vegesna, to merge data from a legacy system with a Zoho application. Zoho is using CloudSQL to enable two-way integration between Zoho’s CRM software and QuickBooks, the popular accounting package for small businesses. Data from QuickBooks can be pulled into Zoho’s reporting module, but CloudSQL exposes Zoho CRM data to QuickBooks.

To date, Zoho hasn’t put much attention on verticalizing its applications, focusing first on depth and breadth, and now integration.

“The expectations are high in a user base for tighter integration, and so we are integrating,” concludes Vegesna.



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