January 14, 2009, 9:36 AM — Google launched on Wednesday a reseller program for the paid version of its Apps hosted collaboration and communication suite.
The program will allow, for the first time, third parties to resell Apps Premier, which costs US$50 per user per year.
Resellers can be IT service providers, VARs, system integrators, consultants, software vendors and ISPs of any size anywhere in the world.
Although most Apps customers are individuals and small businesses that use its free Standard edition, Google has beefed up the Premier edition in a variety of ways to attract the attention of large organizations.
Fostering the creation of an active reseller community for Apps Premier is the latest step in that direction. Resellers are able to provide the dedicated, one-on-one support that large organizations often require throughout the lifecycle of their enterprise software products.
SADA Systems in Los Angeles has been providing IT services for Apps Premier for two years. This fast-growing part of its business now represents 25 percent of its services revenue, said President and CEO Tony Safoian.
The company, founded in 2000 and with a staff of about 30 people, jumped at the chance last quarter to participate in the pilot for this new reseller program.
"Now we can manage the entire Apps Premier transaction and relationship for our clients," Safoian said.
In addition to its Apps Premier business, SADA Systems also does traditional client/server projects, custom application development work, and managed services for small and medium-size businesses.
Although there is a perception that Apps is a self-service, easy-to-implement hosted suite, there is a need for companies like SADA Systems to assist with implementation, integration and support, particularly in large deployments of hundreds or thousands of seats, Safoian said.
Premier has many more moving parts than the Standard edition, such as the Postini e-mail security and archiving component and APIs (application programming interfaces) for integration with other systems. "Those things aren't trivial from a technology standpoint," he said.
Beyond the technology issues, resellers can also help customers with the project management and end-user and IT staff training involved in bringing in Apps Premier to an organization, said Safoian, whose company has done Apps Premier implementations of between 7,000 and 8,000 seats.
Google provides close support to SADA Systems and continues expanding its resources and tools, he said. "I talk to someone at Google every day. We go all over the country and meet [jointly] with customers," he said. "Some of the other partnerships we have, the vendors don't even know we exist."
Another reseller on board is Cloud Sherpas in Atlanta. Eran Gil, cofounder and vice president of business development, sees Cloud Sherpas as an extended arm of Google sales and support.
"Google doesn't provide an extensive support model [for end customers.] Google leaves it up to the partners to assist with the ongoing support," Gil said. "We're here to help Google scale the model."
Google will offer Apps Premier licenses at a 20 percent discount to resellers, and provide training, support, and tools for sales and marketing.
Resellers will be able to bundle their own complementary IT services with the sale of the suite to generate additional revenue. Resellers will handle the billing process for Apps Premier, not Google.
To further differentiate the Premier and Standard editions, effective Wednesday Google is also capping the number of users an organization can have on the Standard version. This limit doesn't apply to existing Standard users.
CIOs and IT managers in mid-to-large companies are warming up to Web-hosted software like Google Apps as an option to traditional software that is installed and maintained on customer premises.
Among the things many find attractive about hosted software, commonly known as software-as-a-service (SaaS) products, are that it's generally cheaper, it's installed and maintained by the vendor on its data centers, and it's usually designed to make it easy for users to share and collaborate on files.
On the other hand, there are also objections to SaaS products, such as occasional performance and availability issues and security concerns.
SaaS products are part of the cloud computing trend, which also includes the provision of IT infrastructure services via the Internet, like storage and server capacity.
"In general, there has been a lot more awareness about cloud computing [recently] and about the transition [to that model] that has been taking place," said Rishi Chandra, senior product manager of Google Apps. "Many partners have been coming to us and telling us they see the [cloud computing] momentum and that they want to get involved."
A participating reseller that is betting big on this cloud computing trend is Excel Micro in Philadelphia. The company, founded in 1991, changed its entire focus five years ago from IT networking to cloud-based software, said Joseph Vaccone, president.
"We're excited about this shift into the cloud. The current economic conditions are going to force the model a bit faster than what we would have projected last year," said Vaccone. He expects Google Apps-related business to account for 25 percent of the company's revenue by the end of this year.
Companies interested in applying to the program can find out more information about the requirements online. Google will begin giving partners the green light to resell Apps Premier toward the end of March.
About 50 partners have been participating in the reseller program's pilot phase.
This Apps reseller program is an extension of the partner programs Google has had for some time for its enterprise products, like Apps and the enterprise search device Search Appliance.
Google has an Enterprise Partners program for third parties that offer services for Google enterprise products. For example, Cap Gemini made a deal with Google in September 2007 to offer Apps Premier services to large organizations.
Google also has a Solutions Marketplace of products that extend the functionality of Google enterprise products.
Apps, which also has the free Standard and Education versions, is in use at more than 1 million businesses by more than 10 million end-users.
Some large organizations that use Apps Premier include Genentech, Telegraph Media Group and the Washington, D.C., government.