Summary

When considering the vibrant market for Microsoft and IBM VARs (Partners) and a shift in spending for the SMB/SME market, it's no shock to see Google pushing their Google Apps solution in new and innovative ways.  Google wants to create a VAR channel for Google Apps and is taking steps to make that a more widely known reality with initiatives such as "Going Google".

Analysis

The largest salvo is yet to come from Google against Microsoft Office/Exchange and to some extent, IBM Lotus. This analysis will focus on the most visible SMB/SME market threat posed to Microsoft.
 
While not new, there is already a reseller program being actively developed since January 2009 for all things under the Google Apps umbrella of services.  What is new, is the direct market approach to end customers named "Going Google" .  This approach is a familiar type of viral campaign hopes to build a funnel that will likely be used to create what Microsoft already has built over many years — a channel.
 
This is a race to see if Google Apps Reseller Program can be catalyzed further by internally spread direct marketing messages in an overt campaign.  As is often the case with the SMB/SME market, the business will often rely upon a VAR or integrator to take advantage of discounts and tangible support options.
 
At stake are mid-market VARs that operate exclusive to the SMB/SME community.  The VARs must begin to appreciate the recurring revenue stream (as a known path) to offset the ever decreasing margins on unit sales of software, hardware, and support contracts. What is presented by "Going Google" will be a slice of revenue that is recurring and likely promotes sustainable growth.
 
It is very likely that the prior Postini acquisition will form another path to covert accounts or to provide the VAR channel with a list of qualified leads to take the Google Apps relationship to a deeper level with existing customers.  However, key challenges that have to be addressed by Google Apps Reseller program will include but not be limited to the following:
 
  • Incentives that appeal to "converting" competing channel partners (Microsoft migration tools, training, and onboarding)
  • Clear certification and solution finder assistance (Microsoft Solution Finder)
  • Addressing VAR perceptions that prior Postini VAR models are are being replayed/re-used
  • Multiple market (cities/offices) incentives and VAR tools for partnering (MSPP Channel Builder)
 
The game will be between Microsoft and Google for creation of a channel vs. trying to cut out the middle man with self service applications. The VAR and integrator has to achieve  appreciable margins or look to recurring revenues with the option to sell deeper into their customer. As the “box movers” struggle to find margins the survivors will be those that look to services. 
 
In conclusion, one can expect to see Google Apps show up in more SMB/SME environments in mid 2010 and a vibrant Google Apps VAR community emerge by late 2011 if the challenges mentioned previously are addressed by the close of 2009.

Analyses are solely the work of the authors and have not been edited or endorsed by GLG.