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Will Google Apps Woo Enterprises?
By Michelle Savage

August 15, 2008 — Google Apps has fully extended its reach from consumers to enterprises, but is it the end-all, be-all answer to enterprise groupware? Some experts say that the low cost of Google Apps doesn’t outweigh the security and privacy risks it brings to an enterprise, while others believe Google’s future is bright in the enterprise market.

Today, many companies are using or at least experimenting with cloud-based Google Apps, including Gmail, Google Talk, Google Calendar and Google Docs. “There are now more than 500,000 businesses using Google Apps and more than 3,000 new ones are signing up every day,” said Andrew Kovacs, a spokesperson for Google. Valeo, an automotive supplier, now has 32,000 users using Google Apps, including Gmail, Calendar and Docs, and the Government of Washington, D.C. recently moved 38,000 users to Google Apps.

Rajen Sheth, senior product manager at Google, said that more and more enterprises are weighing the benefits against the concerns and finding that Google Apps is a viable solution for companies of all sizes. “The biggest benefit for enterprises is that they can just turn it on and not worry about the infrastructure,” he said. “The biggest challenge is that it is a very different model, and enterprises are not used to storing data outside their firewall. Getting used to that model and thinking of things in a new way are probably the biggest challenges.”

But some experts are concerned that far greater challenges exist. Josh Greenbaum, industry analyst at Enterprise Applications Consulting, believes that Google Apps comes with far too many compliance, availability and data integrity risks to be taken seriously by enterprises. “Fundamentally, Google Apps has an enormous security hole in the model that makes it impossible for these solutions to replace desktop tools,” said Greenbaum. “Gmail is one example. Google is scanning the content of your mailbox and popping up ads that are relevant to your content. This can’t be in compliance with decent privacy models and regulations.”

Sheth pointed out that Google’s Premier edition allows enterprises to turn off pop-up ads and comes with what he called “enterprise-class” security features. In addition, Google has different products at different phases of SAS 70 certification, which is a national standard that helps companies identify service organizations that comply with business processes and audit standards. “Corporations can integrate their own authentication systems on top of what we have and they can even add their own policies,” he said. “Postini helped us enable better compliance and archiving features, as well. Trust is the most important thing that we have with our user base. If we lost that, we’d see people pull away. So we take it very seriously.”

But Greenbaum argues that Google has not done enough to make Google Apps enterprise-ready. “There are other companies, such as Zoho, that provide rock-solid, cast-in-stone security policies,” said Greenbaum. “Google has still not done this. If I were the Chief Security Officer at a company, I wouldn’t trust Google until it makes an unequivocal statement about whose data belongs to whom.”

Gartner analyst Tom Austin, agreed that both free and paid versions of Google Apps raise security and privacy issues. For this reason, Austin doesn’t expect widespread enterprise adoption anytime soon. While Google can be beneficial to small and mid-size companies, larger companies have a responsibility to their stakeholders and governments to control their assets. Because Google does not fully disclose what its security policies and control mechanisms are, Google Apps does not meet this requirement. Until Google addresses this deficiency, enterprises “need to exercise considerable care here,” he said.

Also, because Google doesn’t guarantee locality of storage, many global customers can’t use it. “I have a government client in Australia who couldn’t use it because government regulations require that all government data be stored in that state,” said Austin.

Kenneth Marshall of Deloitte Consulting said that the majority of his enterprise clients aren’t even considering Google Apps, although he believes that, as Software as a Service (SaaS) initiatives are more widely embraced, this will likely change. “At an enterprise level, I don’t see independent deployments of a Google application in a vacuum. It makes more sense that Google Apps will be deployed as an add-on to a Salesforce.com stack or other SaaS offering. SaaS is a driver for adoption of things like Google Apps for companies that want a lower cost solution that is easy to deploy and doesn’t require maintenance and upgrade fees.”

But even when it comes to cost, Greenbaum advises companies to take a closer look at the true cost model of using free or cheap applications before using them. “That cost model should come from understanding of security and privacy,” he warned. “Don’t be fooled by free. Your enterprise license with Office may offset the cost of what it will take for you to secure what Google is offering. There’s no business case for signing over security for a few pieces of silver.”

Austin points out that another major problem with Google Apps is the increasing number of under-the-radar users. According to Austin, whether enterprises like it or not, free Google Apps are creeping into companies as secondary tools that he said are “passively tolerated” by IT departments. Most of these users are downloading informally acquired free versions of Google Apps (with advertising present at least in the e-mail window), rather than the paid Premier edition (which allows enterprises to turn off all advertisements).

Austin said that IT often turns a blind eye to the problem because they don’t want to deal with or support it. The downside to this approach is that security, regulatory and governance risks are increased.

Rather than ignore this trend, Austin advises IT organizations to support selective experimentation by end users, using the Premier edition, to learn more about how it can use Google Apps to bring value to the business. “Find out who is using Google Apps and what they’re using it for,” said Austin. “Encourage them to share business value, best practices and success stories.”

In addition to security concerns, Google Apps users must also consider productivity issues, which are considered the thorn in cloud computing’s side. For example, in early July, Google Docs, Google’s alternative to Microsoft Office, went down briefly. While it was up and running again within an hour, some argued that downtime is another concern when dealing with cloud services such as Google Apps.

Greenbaum called downtime and the risk of lost e-mails or documents “glitches” that are tied to the consumer-oriented service levels that Google offers. “These glitches don’t translate to the enterprise,” he said.

But Marshall said this problem was not big enough to discourage enterprise adoption. “Google’s hitting 99.9 percent uptime,” he said, “which is better than what most in-house data centers can promise.”

Sheth added that Google invests heavily in guaranteeing the availability of its systems. “We provide escalation for business Gmail users to ensure that their mail will be up and running at all times,” he said. “And we do a lot internally to ensure continuous availability. Most of the infrastructure we provide is far better than what companies can provide internally.”

So just where does Google Apps stand in the enterprise market? Through at least 2012, Austin predicts that the primary enterprise use of Google Apps will be as supplements to tools like Microsoft Office. “In the long-term, we think Google Apps and similar Web-based tools may evolve into more viable candidates as the primary tool of choice, displacing more tradition tools, but we do not expect many enterprises to abandon what they already have,” he added.

And Google sees itself in a similar light, said Kovacs. “Compared to traditional desktop solutions, we view Google Apps as complimentary, not necessarily competitive solutions,” he said. “Do I still have desktop software? Absolutely. Am I using it much less? Yes.”

“Certain segments of enterprise population are using Google Apps as supplements, but not replacements,” noted Austin. “But Google Docs is nowhere near Microsoft Word when it comes to features. However, if you have a dozen people and want to conduct a real-time meeting using the same document, you can’t do that across enterprise boundaries with Word. But you can do it with Google Docs.”

Austin believes that greater adoption of Google Apps is likely as Google continues to improve and enterprises become more comfortable operating in the cloud. He compared Google Apps adoption trends to PC adoption trends in the 1990s. “Google is no more likely to replace Microsoft Office in the next two years than PCs running Windows 95 on NetWare LANs were likely to kill the mainframe between 1995 and 1997,” he said. “But Google is giving away its Apps to gain a foothold in the enterprise market. And Google will continue to improve its level of service and provide higher levels of security guarantees.”

Whether or not Google Apps gains this foothold, one thing is for sure—Microsoft won’t be idly standing on the sidelines. It has already announced online versions of several key offerings, including Exchange and SharePoint, and has committed to investing heavily in online services over the next few years. And rumor has it that Microsoft is building a cloud infrastructure service under the codename “Red Dog,” which would compete with Google App Engine, a developer tool that lets companies run their applications on Google’s infrastructure.

Gartner also predicts that Microsoft will soon deliver rich Office suite functionality via Microsoft Online that will fully support both online and offline work. But Austin believes that the Google threat is more in the communication and collaboration space than in Office sales. “Microsoft likes to think they’re far richer but Google promises to be richer in some areas,” he said.

Related Search Term(s): cloud computing, e-mail, security, Google, Microsoft

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