I haven’t had much time for blogging lately, but this one caught my eye:

Gates to Google: “Your business applications stink” | The Open Road – The Business and Politics of Open Source by Matt Asay – CNET Blogs

(Disclaimer – I’m a former Googler and have been using Google products for productivity and personal purposes for over 2 years.)

Matt Asay, who does a good job covering open source developments, has a short piece where Gates points out the flaws in Google’s web-based productivity suite.

If Google ends up getting meaningful market share in this space (and I believe they will), this will go down as one of those quotes you see in a future version of “The Innovator’s Dilemma” – it’s just classic. This is my favorite pull quote:

“If you’ve seen … the Google tools that have tried to do productivity type things, they really don’t have the richness the responsiveness. You can see that relative [to] the success they have had there. Most of these Google products, to be frank, the day they announce them is their best day and then after that ..”

At the end of the day, Google Apps do not compare favorably to Microsoft Office apps on a head-to-head basis. And it’s likely to stay that way for some time given the richness available from Microsoft’s desktop products. Microsoft has built an ecosystem around Office and many people depend on it every day.

This reminds me a lot of the kinds of comments I heard about web-based email and mobile phones when they were relatively new concepts. My mobile phone is just now beginning to approach the reliability of my landline phone. Somehow mobile phones have managed to grow nonetheless. The reason is simple -for some use cases, the new technology far outshines the previous alternative and renders comparisons meaningless.

The real compelling use case for Google Apps is distributed collaboration. They really shine in a situation where a distributed group is trying to share information or iteratively update a group project. It’s also a great solution for small businesses who don’t want to or can’t afford to implement a full Exchange environment with Office on every desktop.

If Gates’ focus is on penetration among customers who value richness, Microsoft will get blindsided by Google Apps. Google Apps’ existing adopters are people who value the online collaborative elements over the depth of functionality offered by desktop alternatives. If Google does things correctly and continues to both add in popular features from MS Office and do things that simply can’t be done in an isolated desktop environment (like real-time collaboration on the same document where you can both see changes as they’re made, a common spreadsheet that everyone can work on simultaneously, etc), the Apps suite will become “good enough” for a larger number of users.

By the time Google Apps show up AND (and the AND in caps is intentional) are heavily used at major Microsoft houses, it will be too late for Microsoft to do anything about it – Google will have gotten there by improving the Apps suite until it matches the functionality that Office provides.

Aside from the ability to learn about what major enterprises need to have before they’ll flip the switch to web-based apps and the chance to land a few marquee accounts, I don’t see much value in pitching large, entrenched Microsoft houses today. I don’t believe there are a lot of large businesses out there ready to make the wholesale switch today.  There is a much larger opportunity for Google to go after people who don’t yet have a solution (new businesses, web-based SMBs) than to try to convert Microsoft users who have solutions that are more feature rich.

Aside from barking up the large enterprise tree, the real danger I see for Google is focusing too much on MS Office parity. At the end of the day, I’m of the mind that time is better spent building out features and functions that you can’t do on the desktop than simply trying to duplicate every feature in Office.

Last thing, life outside of Google has taught me that there are a lot of people who have really optimized their work around the use of MS Office desktop apps. They don’t “trust” cloud-based apps for their work any more than early mobile phone adopters would have lived without a landline as backup. Getting meaningful usage of Google Apps is going to be tougher than simply getting sales and closing deals – employees are going to have to get comfortable with the tools and see them as a better way to get their jobs done than the status quo.

Blogged with Flock

Tags: google, googleapps, microsoft, office20, enterprise

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Earlier this week a friend of mine updated his IM status message asking his friends for thoughts on the future of social networking as he was getting ready to speak at an event on that very topic. I think that what the Xobni guys are working on is the future of where social networking is going. Phase I was simply getting people connected. “Friending up” your network was a necessary evil and I think people will continue to do this. Phase II, which is where I think we are today, is really about adding some context to the nature of relationships. We’re still working through this phase, be it on LinkedIn or Facebook, and I do think that the near-term dominant model will be for users who care about adding context to the nature of their connections doing so in a manual fashion.

So what’s next? Well, I think what’s next (and by far most interesting) is some concept of the “strength” of a connection. Specifically, today I can see a lot of my friends’ social networks, but I have no idea for the relative strength of connections. Sure, if I see Person A knows Person B, I can always make an offline inquiry to see if that connection is strong or weak. But very soon I think we are going to have tools like Xobni that profile communications patterns and surface that information both to end users and to other applications. And it won’t be just social networking and community applications that benefit. Enterprise applications (collaboration tools, CRM tools, HR/recruiting systems, etc) will all benefit from having access to some of this information. We’ll call this contextual “strength” Phase III.

Phase III is really interesting to me because I think it has to be a largely machine-driven approach. Communication patterns are too dynamic for any user to bother continually updating “strength” of connections. Also, as Xobni has shown me, if you are a power emailer you’re likely to be surprised by who shows up as ranking highly. There’s no reason the same can’t be done for IM. I’m not sure that I’m going to turn my phone logs over to some 3rd party analytics company, but IM and email would be a pretty decent picture of what I do and with whom I communicate. Passive profiling of communications patterns is going to be really interesting and I think will expose really interesting information about the nature of communications. I think Xobni is on to something really cool and big as it’s delivering value to me today (even though I have to use it in Outlook) and I can see a path to a lot more value in the future.
As an aside, I think this is the best shot that Google, Microsoft, and Yahoo have to wedge their way back into social networking relevance. They already own the message stream and have the data they need to get a sense for who knows whom. It will be interesting to see whether they choose to open this information up and let other applications take advantage of it or whether they use it for the bedrock of their own auto-generated social networks.

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I was reading this really interesting post on GigaOm about how young people aren’t going into enterprise software anymore. My initial thoughts are that enterprise software feels like trucking or transportation – lots of revenue but limited growth opportunities. Some of the reasons that younger folks are deserting enterprise software can be chalked up to the impatience of youth. Others can be chalked up to the perceived growth prospects for the industry.

The traditional packaged enterprise software industry doesn’t feel like a high growth area. It’s large, but not so dynamic. Enterprise software is definitely a really large industry. However, with Oracle, SAP, and Microsoft buying up almost every category-leading vendor out there, the industry feels like it’s a large behemoth with limited growth opportunities. Aside from SaaS and open source, there aren’t a lot of areas of software that look attractive to new folks in technology. On the flipside, consumer-facing web companies are not nearly as large (in terms of profit potential), but appear to offer much better growth prospects.

The nature of the sales and product development process tends to keep younger people in the background. Most traditional enterprise software companies, save those who are targeting mid-market or SMB customers, tend to sell to senior executives at Global 2000 companies. The folks to whom these software companies sell tend to be senior executives and well, older in general. I’ve certainly seen software companies who want to send sales, marketing, and product folks whose age and experience profiles more closely match those of their target customers. As such, it means that many younger people end up having to “pay their dues” in the background before they get additional levels of customer-facing exposure. Contrast this with the latest wave of web 2.0 companies, many of which feature people in their early 20s in leadership positions. Without the need to sell directly to customers who are senior executives, it’s not as necessary to have “grey hairs” in visible roles on the team.

Enterprise software companies have really long product cycles, whether it’s initial development or future revisions. I don’t know a lot of enterprise software companies who release more than one major upgrade of their core product with a frequency greater than every 12-18 months. For someone who’s eager to get feedback about what they’re working on and get experience with the product launch process, that’s a long time to wait. You’ll basically need 3-4 years to see a few revs. You’ll learn a lot in that time, but it’s a long time to wait. There are lots of web companies who launch new revisions to their core platform in a near constant basis. This offers a young person many more opportunities to see the launch process in action in a fairly short period of time.

It’s hard to start an enterprise software company until you understand enterprise customers. Simply put, I’m not sure how you develop a CRM software solution, the next generation security application, or the next financial application unless you’ve gotten to understand the basic needs of these customers. As such, I’m not sure how many college students or young folks in the industry have this kind of insight until they’ve been in the industry. And if you don’t enter, then how will you learn these things? Again, many of the folks in the web 2.0 space are building apps to solve problems they understand where they are part of the core customer segment.

Enterprise software companies are a great place to learn how sales, product development, and marketing all work together. Despite all of the many issues identified above, enterprise software offers a much better place to learn the business of software (or just business in general, for that matter) than most web 2.0 customers. In enterprise software, you learn a lot – you can learn a lot about how the direct and channel sales processes works (which is largely absent in most web 2.0 companies), how to manage a longer-run product development process that involves direct interaction with existing and prospective customers, and how more traditional marketing (product and corporate) can help drive effectiveness in software. The interplay of development, sales, and marketing in an enterprise software company can teach a young person quite a bit about how business works and how these three forces need to balance each other. Oh, and let’s not gloss over the fact that enterprise software tends to generate cash and lots of it – nothing like having your performance and

For all of the downsides of working in enterprise software, I think the current generation of web 2.0 entrepreneurs could benefit from some of the hard-learned lessons from a career in enterprise software.

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I was reading this post on RWW about how Google and CapGemini are going to work together to drive Google Apps adoption in the enterprise. The post lined up with a bunch of things I’ve been thinking about after reading some Office 2.0 recaps.

Is it just me or does there seem to be a subtle (or not-so-subtle) recasting of web office suites to be less about new functionality and feature differentiation and more focus on the price differential versus Microsoft Office? Early in the web office discussion, it seemed to me that there was a lot more conversation about the benefits of using web-apps (no VPNs, universal accessibility, easier to manage and deploy, etc) versus traditional desktop applications. Repositioning the conversation around price comparisons is a shift, it seems – there are certainly folks for whom price is the major impediment but this recasting strikes me as an admission of how far the industry has to go to reach real competitive parity.

Also, it’s important to note that some of these “disenfranchised” folks who do not have desktop productivity applications on their computer don’t need them. If you are in a task-oriented job where you enter data into a system, you might as well have a terminal as opposed to a full-fledged PC. Why would you need access to spreadsheets, word processing, and email?

More than revenue and sales, this partnership could give Google much more insight into what corporate IT folks need to see out of Google Apps for Enterprise before they start writing checks. It’s worth noting that Google has one major touchpoint with enterprise IT folks today and that’s the Google Search Appliance. The folks who are managing online advertising spend are likely not the same folks who make IT infrastructure decisions. Working with a large system integrator is a good way for Google to get a handle on the key requirements they’ll need to address to make GAFE a more palatable product for larger organizations. I also wonder if spending more time with the guys over at Salesforce.com might not also be the answer – those guys seemed to have cracked this nut before and I bet they’d be willing to share parts of the playbook.

From my experience, many employees struggle to use the tools that they have at their disposal today – adding more tools in might just make life more complicated. I’m sorry, but the whole “Team Productivity” moniker just sounds weird to me. I’ve worked at a handful of places and in almost every case I’ve seen employees befuddled by the full range of things you can do with the existing tools at their disposal. Adding in a new layer of tools and interfaces to learn when the existing products aren’t being fully utilized today might make life harder (as opposed to easier) than it is today. The history of groupware and group-oriented productivity applications has shown that it’s a tough nut to crack. Often times, the individual must find a way to be productive before he/she can worry about improving the productivity of the whole.

All in all, it’s an interesting announcement. I expect it will generate modest amounts of sales for both parties but will help Google get smarter about how to sell, develop, and position their product for a more sophisticated audience.

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Is Microsoft really going to buy RIM? Should they? As a gadgeteer, I can say this – Windows Mobile is absolutely the last OS I’d want on any mobile device these days. Having briefly owned a Moto Q and a few other Windows Mobile devices, that OS has a long way to go to be a true competitor.

I would hate to see Microsoft buy RIM – I think the Blackberry is an iconic device and I’d hate to see a larger company saddle it with all of the bureaucracy, infighting, and internal competition for resources that would saddle the RIM division of Microsoft. Even worse, I’d hate to see Microsoft try to stick Windows Mobile on the Blackberry. Buying RIM would be tantamount to admitting that Windows Mobile just sucks and plain doesn’t work.

Ironically, I think that admitting that Windows Mobile doesn’t work and isn’t very good would be a very liberating thing for Microsoft to do. I have no idea how many engineers, product managers, and business development people they have working on making Windows Mobile a viable OS, but I bet their energies could be better directed elsewhere. Perhaps admitting defeat and starting over would allow the company to take a fresh look at building a new mobile OS. Who better to further the future of a closed, single vendor device than Microsoft? I can only think of one company, and they already have the iPhone…

Keep RIM independent unless it goes to a better home. I’ll have more to say on this later.

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I have been reading a handful of well-written and interesting posts beating the drum about how some of the great things that leading-edge consumers in the web space have come to know and love (tagging, bookmarking, AJAX-enabled interfaces, etc) will inevitably make their way to the enterprise in some form of “Enterprise 2.0″ and I must admit that I have some deep skepticism about how fast this will happen. Part of me feels like it’s a knee jerk reaction to where we are in the Web 2.0 hype cycle – nobody has been talking about enterprise software outside of SaaS for some time now and this gives life to a boring but important portion of the tech landscape.

The reason I get hung up on why this Enterprise 2.0 stuff is going to take a lot longer than people think is pretty straightforward. As someone who has worked in technology and invested in enterprise start-ups, I have only seen grassroots technology take hold in a corporation in one of two ways. First, a motivated individual (usually at the individual contributor or department manager level) is able to sneak in a technology solution that makes the individual or group more productive. Given that it touches enterprise data, it usually ends up needing (and getting) the blessing of the IT folks who can then deploy it. What starts out as a pilot grows to a small deployment and well, you know the rest. Pretty classic stuff.

The other model is the expense report model. I remember when I first started seeing individual sales reps using Salesforce.com or carrying Blackberries for email, many of them were just expensing the purchase every month as it was work-related and small enough to fall below the water line of scrutiny at their companies. For something that is discrete, doesn’t need to interface with internal IT systems from day one, and makes the individual immediately productive, there will always be the back door of the expense report as a way to get some things in the door.

At the end of the day, I don’t see how you can deploy a Zimbra-like solution for email, an internal social bookmarking application, or some other slick web interface without some collaboration from IT and a motivated individual inside the company who wants to advocate for the purchase. I haven’t seen examples of many established companies who have the combination of a motivated internal customer and a solution that can be deployed easily.

I don’t think it’s all doom and gloom, but I do think that enterprises deploy technology in a different way than consumers adopt it. Simply selling the IT department or a motivated individual on the utility of the solution is a very small part of the puzzle — how do you actually drive adoption and usage, especially if the people at the company are not early adopters and might frankly be okay with stale but well-known interfaces?

There is one area where I do think that there’s an opportunity to deploy a low risk, high value solution that would rile an IT department. Talk to just about anyone who has a medium-to-large sized intranet and ask them how easy it is to find information. A social bookmarking application for enterprises (or some mechanism for identifying useful content outside of algorithmic search) would avoid the tag spam problems you need to solve on the open Internet and would allow internal experts to point users toward useful content. And if people don’t adopt it once it’s deployed, it’s not the end of the world.

Anyway, I think that a lot of these concepts and technologies will make their way into the enterprise, but it will take a lot longer than people think, especially if the goal is to get major corporations (many of whose employees do not live in Silicon Valley and don’t read tech blogs like this all day long) to adopt and deploy this stuff.

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