Is Google Dealing from the Bottom of the Deck When It Comes to the Channel?

I just watched Google’s Jeff Ragusa’s video clip explaining the Google Apps reseller model. If I didn’t know any better I would have thought the Just for Laughs Festival I attend every year started early. Here is the big joke: Google is offering a whopping 20% of the Google Apps revenue generated by the Channel for directing their customers to Google’s coffers. For those of you that don’t know yet, let me give you the math: Google charges $50 per year per user for access to Google Apps. Gee Goog, you shouldn’t have. I mean really! A cool $10 per year for every user I hand over? Where do I sign up for this cash bonanza!

The financial scraps approach to building a Channel play and my sarcasm aside, this is where it appears Google is dealing from the bottom of the deck when it comes to the Channel: You are giving up the control over the operation of your customer most important applications: Productivity and Email. Opening up your IT Service practice to Google is nothing short asking the fox to guard the henhouse.

If you are seriously considering the Google reseller program, ask tough questions. Here are 10 questions to get you started:

  1. How does Google Apps integrate with my clients other business systems?
  2. Will I be able to apply my remote monitoring and maintenance tools to Google Apps so that I can maintain SLA consistency with my client?
  3. Will Google Apps integrate with my Professional Services Automation (PSA) software?
  4. Who controls the database where customers are registered?
  5. Will my clients email be filled with Google ads, just like my Gmail account?
  6. Can I choose where my customer email data is stored geographically to satisfy data residency requirements?
  7. If I educate my customer about Google Apps and then they sign up directly, how do I get compensated?
  8. Can I just take the Google Apps software and run it on my how hardware?
  9. My customer has built an IT operation on Active Directory services. Is IT migration to Google Apps as easy as buying an Adword?
  10. Who owns the risk if Google Apps fails since I’m the one billing and collecting from the client?

Google’s ‘hand is quicker than the eye’ program comes with a nice slick portal, white labeling bells and whistles, a cool training program and the power of Google’s expertise in building a state of the art system from the ground up. But don’t be fooled. Google fails just like any other IT system. What matters in this is who owns the guts of the operation; it’s who controls the data. Google is right on point when they say that centralized application delivery is the future (SaaS), but IT Service Providers need to ARCHITECT hosted solutions for their clients to perpetually demonstrate value and relevance as the cloud computing paradigm continues its takeover of IT best practices and deployment strategies. It might be the harder road to travel in the near term, but your service practice will be better for it.

I truly believe IT Service Providers CAN succeed and actually beat Google at their own game. I spoke with one of our Service Provider clients recently that believed the price of Google Apps was going to ‘win’ the market because Microsoft on premise solutions are so expensive. I said to him, “look, if your customer is not married to the features and functions of the Microsoft solution, then don’t let them become susceptible to the Google pitch.” By that I meant begin exploring hosting open source software alternatives to Microsoft. Other Service Providers are flocking to open source mail systems and productivity software suites and the control over pricing to your customers is very compelling.

Naysayers point to the fact that Google’s price of $50 per year per user is simply so rock bottom that you can’t compete if you are a regional Service Provider. Not true. At 6fusion we are helping Service Providers go to market with open source services priced the SAME as Google and we are beating them at their own game. Google sees the commodity applications as a loss leader. They aren’t interested in building their business on Apps revenue. They are interested in everything that trails the wake of productivity and email application use. IT Service Providers working with us are starting to use the very same strategy (we give them commodity utility computing infrastructure so they can compete with the likes of Google and others). And it’s smart. Any mature IT Service Provider knows full well that the bread and butter are IT management, migrations, projects and ongoing fixed fee SLA revenues.

So Google now has over 1000 employees focused on cracking the Enterprise SaaS nut and you, the IT Service provider, have a team 12 consultants and 2 sales people. Worried? Don’t be. Here is what Google will never have that you will never have: Trusted advisor status with your customer’s decision makers and more to lose if things don’t work as advertised. This is a very valuable trump card. If you play your cards right, Google (and others) should never be a real threat to your business.

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2 responses to “Is Google Dealing from the Bottom of the Deck When It Comes to the Channel?

  1. Pingback: Understanding the Role of the Channel in Cloud Computing «

  2. Pingback: Implications of the Twitter Hack for the IT Channel «

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