Numbers and packaging will determine Google's Postini effect

It's tempting to see deals like Google's $625m Postini acquisition purely through the specs of technology hindsight, with a future previously hidden popping into view like Brigadoon. Ah, email security with IM and compliance for Gmail and Google Apps - that makes sense. The Postini deal is certainly important at least for the fact it's Google's enterprise business, often over shadowed by the company's search and online ads juggernaught, that stands to be the chief benefactor through the addition of email security, IM security, web security, message archiving, message encryption, and policy-enforced TLS.

The deal is a compelling technology proposition following other recent changes that helps put Google in the arena with Microsoft and IBM on information and collaboration infrastructure. That's important for Google's business users, of which Google claims there exist 100,000 already on Google Apps with 1,000 signing up each day.

Google Apps will impact business. They are already banging on the door of the enterprise IT department and will find their way inside, as did email, IM, PDAs and mobile phones before them. Taking this into account, the timing of the Postini deal is significant, as it will help sew uncertainty in the minds of Microsoft's partners, assembled to drink the Redmond Cool Aid at this week's Microsoft Partner conference in Denver and who will be asking questions about Google as a rising star and potential email and collaboration partner. On the plus side, Postini brings Google 35,000 customers and a claimed 10 million users.

Google's Brigadoon is far from clear, though, and the company has some important questions to resolve, chiefly around integration and packaging and size of market.

It's unclear whether Postini be available separately or integrated with Google Apps running under the covers. The answer to that question is one of customer ease-of-use versus revenue stream for Google, and will also measure the likely challenge email and collaboration incumbents IBM and Microsoft will face. Making Postini available as part of Google Apps makes the most sense from a disruptive perspective and would fit Google's existing mode of operation.

The answer, too, will impact what some might see as the potential death of an industry - that industry being email and collaboration security, antivirus and compliance. That will depend both on Google's perceived and its actual ability to keep its security offerings fresh. Otherwise, Google risks succumbing to the classic platform providers' burden of being too generalist and leaving traditional providers room to develop and market their goods based on technology and domain expertise. Google is likely to rely on partners, not squash an industry, although the sector will need to adapt and increase its marketing profile.

The biggest issue, though, is those market numbers Google claims. We'll have to take Google's word on the 100,000 business customers with 10,000 signing up each day, given the lack of independent verification. Going against that, is Google App's individual features lack of maturity and integration with back office business apps, compared to either Word or Notes. Google's provided no real break out of what types of business these companies are or whether these are businesses (as opposed to users), and whether these are active accounts (instead of trial accounts.)

We do see potential for on demand apps in business - especially in the area of information worker and collaboration. We see a competitive battle between Google Apps and Microsoft Office Live. However, Google will need to communicate more information on actual market details to potential partners and capitalize on Postini's 35,000 customer base to rally partners and build an ecosystem around Google Apps, adding value to the platform and challenging Microsoft and IBM.

Comments

[Mike Artherton]

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