Google plans to steal 80% of Microsoft’s enterprise market with the questionable 80/20 rule

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While Microsoft continues to transition and posture itself as the “be everywhere to everyone” company, Google is poised to try and capitalize on this precarious opportunity in time. Amit Singh, president of Google for Work, recently shared his hopes and plans to walk away with Microsoft’s bread and butter in the coming years.

“We’re ready for them now. I think the last 12 months we’ve proven to [ourselves and the market] that the Apps are ready for adoption in large enterprises. Now I think is the time to actually scale that even further.” Singh believes Google for Work is now ready to swoop in and lure long time enterprise users away from Microsoft’s offerings, using a few strategic outlines.

The 80/20 rule — it is a common rule of thumb in business; e.g., “80% of your sales come from 20% of your clients.” Mathematically, the 80–20 rule is roughly followed by a power law distribution (also known as a Pareto distribution) for a particular set of parameters, and many natural phenomena have been shown empirically to exhibit such a distribution. Much of his strategy is business marketing jargon 101, but he does offer up some interesting details on Google’s mindset regarding the enterprise and it’s play for their customer base.

Step 1. Make sure that the apps Google offers have 85-90% of the functionality off Office. He mentions, “And in some cases new functionality ahead of the curve. I mean realtime collaboration in Docs, there’s no equal to that. Office Web Apps is a poor proxy for that.” While there is some debate as to the viability of Office Web Apps capabilities in comparison to Docs, there is little to argue that only offering 85-90% of something that already exist is still the same beta mentality Google throws at all of its projects. Office ITs typically don’t deploy beta software.

Step 2. Don’t worry about the remaining 10-15% of features required by power users, particularly Excel. This sounds more like an admission rather than a selling point. While large enterprise’s tend to run businesses, meetings, and projects through Outlook and EAS, the other linchpin Office has had for many businesses is its robust computational client, Excel. Of the big software firms, like Oracle, IBM, Google, etc., it seems very few come close to Microsoft’s offering, and Google for Work is no longer concerned with trying.

Singh doesn’t seem to care because he thinks only 10% of company employees need or care about that stuff. Based on the analytics Google Apps gathered from customer usage, (a stat that comes from a 3rd party called Softwatch which allows companies to monitor their Apps usage), Google believes people aren’t creating new documents or spreadsheets at all. This is a rather quirky manipulation of data, that seems to reaffirm rather than refute the necessity of Excel; the fact that some people may simply not use Google’s sub par comparison to Excel to do sophisticated financial analysis.

Step 3. Support Office documents as “first class citizen.”  This is a very consumer friendly move that should net Google the ease of use over Microsoft’s seemingly proprietary Office documents. The idea is that with Google’s cloud storage, Drive for Work, people can upload documents and when they open them, they automatically open in the appropriate editor in Google Apps on your desktop, phone or tablet. Much like offering Office for Android or the iOS, this move is simply a market reality Google is forced to face for the time being. More people use Office than they do Apps and in order to maintain the few that do, they need to make interoperability a seamless experience.

GDocs

Step 4. Don’t try and convince enterprise to convert from Microsoft to Google Apps. A confusing and hopeful move, Singh believes that instead of a cold turkey approach to Google Apps, enterprise will overlook the short-term financial burden of purchasing both Apps and Office and realize the long term benefit of a gradual learning curve and eventual move over to Apps. “So give people an option and overtime reconcile your associated licensing on actual usage, not just on some upfront commitment and some long-term contract. That’s the old world of enterprise software. Today you should just pay for what you actually use, not for some arbitrary number of users,” Singh says. Ideally that would work if enterprise we’re interested in doubling their expenses for a negligible ROI.

Step 5. Teach them to become power users. Google is constantly assessing how people are using things. The internet, their phones, and especially their Apps in an attempt to entice them to use them more. With this collection of real time data, Google for Work can target most used features and offer online training tips to help the workload of your often overstressed IT department. This functionality is called Google Apps Learning Center.

“And we’re going to expand that this year, where [customers] can come in and learn from each other and experts where they can be trained on new things coming out,” Singh says. Unfortunately Microsoft also has a very similar program that holds high regard among established IT circles called Microsoft Most Valuable Professional (MVP). While both of these services are beneficial to the most eager of employees and IT admin, they still seem to miss the point that nobody wants to learn about new things in enterprise. This is why backwards compatibility has been one of Microsoft’s largest selling points to date.

OfficeOntheSurface

Step 6. Get new customers hooked on products other than Apps. This seems like a no brainer and a very business conscious move. While Google Apps have been around for a decade, they aren’t doing as well as some of Google’s other offerings. Google expanded their cloud computing offerings in 2014 by adding video conferencing, and connected their enterprise offering to their robust search appliance. Utilizing satellite services like those could help lure more people into trying their full Apps platform.

Step 7. Show them how Google’s cloud helps mobile workers. Singh also believes that mobile devices and apps will soon replace PC’s altogether for a lot more employees. “There will be a new generation of applications written for enterprise, which will be built on cloud for mobile which combines insights from different backend, legacy apps that people might have, but delivers it in intelligent fashion as an assistant to you as you are working.”

This statement seems like a page out of Microsoft’s new restructuring. Microsoft has come to realize that change is necessary but the idea of open office rooms with employees using segways to commute back and forth to wall-less conference rooms while utilizing phones and tablets to collaborate is more of a rarity than seeing a Windows Phone in use on the subway. There is a balance to be had, and while Google pitches a future of phones and tablets (where they are market holders), they are also cautious to the reality of enterprise just like Microsoft.

Singh has laid out a fairly comprehensive plan for elbowing Microsoft out of it’s key market. Sound moves backed by slow adoption is a steady course that could prove fruitful in the long run. With that said, this plan is reliant on Microsoft pulling “an IE6.” Not innovating, not price matching and not utilizing it’s other services in a competitive manner.

Office 365 is being adopted at a very fast rate. Prices for Office 365 are dropping and the amount of users per license are becoming more fluid. Office apps are being ported to platforms mitigating the necessity for 3rd party alternatives or Google’s workarounds, and web apps are gaining new features very quickly. Google Apps have been around for almost a decade and have made some inroads. They have also lost some convincing battles. 

Competition is great for any industry, and I’m certain Google for Work is a welcomed Office competitor. It just seems it’s really got it’s work cut out for itself.

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