Google is introducing a new name for the software and services that it sells to businesses, as the well-known consumer Internet company makes its play for a bigger chunk of the lucrative commercial tech market.
“This is one of the big growth opportunities for Google,” said Amit Singh, president of the company’s newly renamed “Google for Work” division, which sells products ranging from online software and data-center capacity to Chrome-based laptop computers to businesses, schools and government agencies.
Google boasts that more than 60 percent of Fortune 500 companies now use some paid Google commercial services. But even though it has won both small-business and major corporate accounts, analysts say Google still faces a challenge in convincing some potential clients that it’s not just a consumer technology company.
At a meeting with reporters Tuesday, Singh and some of his top lieutenants stressed that Google is committed to serving business customers by providing commercial-grade tech support and security for its products. Singh said Google has “thousands” of workers devoted to commercial services, although he declined to be more specific.
Google has sold products to businesses for nearly 10 years, starting with the release of a commercial version of its search tool for corporate computer systems and websites. But the company has beefed up what it has previously called its “enterprise” business in recent years. Singh was a longtime executive at Oracle, the business software giant, before he joined Google in 2010 to lead international sales for the enterprise division.
Today, that division competes with Microsoft and IBM by selling online “productivity” software, including email, word-processing and spread-sheet programs, to businesses and government agencies. It also competes with Amazon and other rivals by selling data-center capacity and software for companies that want to use Google’s infrastructure to build and host their own websites or other applications, or to store and analyze data.
Google also offers online mapping, Web search and videoconferencing for business, and it sells lightweight Chromebook laptops to businesses and schools.
While the company doesn’t break out sales figures for its commercial products, some analysts estimate that commercial sales may contribute $2 billion or more of Google’s total annual sales of $60 billion. That’s a small portion of the business market, but analysts say Google is likely to grow.
“We expect Google’s cloud infrastructure revenues to grow quickly over the next couple of years to several billions of dollars a year,” Bernstein Research analyst Carlos Kirjner said in a recent report.
Other tech companies that are known for consumer products are also seeing profit to be made in the business arena. Apple recently announced a partnership with IBM to develop work-related apps for smartphones and tablets.
Google has good reason for trying to diversify its business. “You can’t be a one-trick pony,” said Forrester Research analyst T.J. Keitt, who noted that Google still makes the bulk of its money by selling Internet search advertising.
Still, while Google says thousands of companies sign up for its cloud-based software every day, Keitt said most of those are small businesses. For some bigger corporations, he added, “the Google name still raises some eyebrows.”
Singh, however, said that’s changing. “In many ways, work itself has changed in the last five years,” he said, citing the increased use of online services and mobile gadgets, along with a trend toward giving workers more flexibility to choose the tools they use.
“Mobility has come into play, and users are making choices. Google for work better reflects the new market environment we’re all playing in,” he added.
Source: Google Renames Its Commercial Software and Services
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