July 23, 2012, 3:16 PM — Google is looking at its cloud-based apps for the enterprise not as a small side business, but as a major driver of future growth.
The company, known worldwide for its highly dominant search engine, has been pushing toward the enterprise with its cloud-based Google Apps. There's a lot of money to be made by selling to corporate customers and Google has wanted to grab a piece of that pie.
Nikesh Arora, Google's chief business officer, says that's going to change.
"Let's acknowledge where we are in the enterprise business," said Arora during Google's earnings call late last week. "I think it's become clear for us that we have a serious small but growing business which is going to be a future growth engine for Google."
Then, without naming the company, he brought up reports that Norfolk, Va.-based Dominion Enterprises, a marketing company, turned down Microsoft's attempts to woo their business from Google Apps to Microsoft's Office 365.
"I hope you read this week about a company who said competition was 50% more expensive than Google and "not as cool," said Arora. "That company is now a $200,000-a-year Google Apps customer."
He added that more than 5 million companies worldwide have "gone Google."
"I think [the enterprise business] is potentially huge for Google," said Ezra Gottheil, an analyst with Technology Business Research. "Microsoft's Office 365 is an important bulwark against Google Apps, but so far it is much more expensive. Some companies will choose to make a complete break from Microsoft."
According to a May report from market research firm Gartner, Google is winning one-third to one-half of new, paid-for, cloud-based office system seats, compared with Microsoft.