Inside Google's bet on 'consumerization'

February 14, 2012: 10:21 AM ET

Google's sales to large businesses are still relatively small, but the company is making rapid gains. And it plans to ride the wave of "consumerized" IT to even greater heights.

google-hqFORTUNE -- Here's Google's (GOOG) strategy for selling to the enterprise: Take a popular consumer product, make a few small enhancements and tack the words "for business" on the end of the name. Sound simplistic? Turns out, it works. Larger and larger companies are signing on for products like Gmail, calendar and maps. (Google's most recently announced enterprise customer is Spanish banking behemoth BBVA.) All of this despite the fact that Google has a relatively tiny team devoted to snagging corporate customers.

Still, enterprise sales make up less than 4% of Google's total revenues, so the search company is nowhere near becoming a large-scale enterprise player on par with Microsoft (MSFT) or SAP (SAP). To find out more about how Google plans to become an indispensable tool for corporate users (not to mention developers), we recently caught up with Amit Singh, the newish leader of Google's enterprise business and a 20-year-veteran of enterprise power-player Oracle (ORCL).

FORTUNE: How would you describe your enterprise strategy?

Singh: Our long-term goal is to take these same consumer assets and bring them to businesses that are keenly interested in changing how they operate because they see the kind of innovation that's taking place in the consumer space. We did this first with our search appliance, then with apps, then with our maps solution. We are taking our technology assets and building enterprise versions of them -- think of them as enhancements. Of course, certain things we'll do just for the enterprise, because clearly there's no consumer version of it. But the whole consumerization of IT has deep, profound implications. It's much more than bringing your own device to work.

MORE: Apple goes after Motorola and Google with legal guns blazing

Are there advantages to using Google Apps for Business, other than real-time collaboration?

Collaboration and sharing are the key areas. But it's also about simplicity and speed. The next version just shows up, so you don't have to install anything. Technology is moving out of the way. You never have to use a manual because it's simple and intuitive. You shouldn't have to worry about what we do in the back-end to enable that.

So what's next for Google Apps?

Imagine you're at an airport and based on your social graph you know that at the next gate there's someone you're in touch with through work. We're moving from asking the system to do something for you to the system suggesting and assisting you. You can do a lot with location for enterprise users -- you'll see some product launches in this area. We have calendaring and tasks and email, and you'll see us deeply integrating the people side of it. Google+ and Google Apps are coming closer and closer together. You now know where someone is and you know how they're connected to someone else. So your phone could prompt you to go introduce yourself. This has implications to sales.

What's your platform strategy?

We've come a little late to that party. But we have some really interesting core structural assets. There are things that we do in the data center at scale that nobody else does. On top of that we built certain products like the Google App Engine for developers to build and host their apps. Our platform-as-a-service is growing very fast. We also make our core infrastructure available. The first product we had was storage. And we have several different fairly proprietary pieces of technology that we're opening up. We are the largest big data company in the world, and we built proprietary algorithms for managing that data. There's an API called prediction that we made available, and it's now being used inside Ford (F) vehicles, in a beta stage.

MORE: Chutzpah: Google also wants 2.25% of every iPhone sale

Can you offer anything that Amazon (AMZN) can't?

We think Amazon's done a nice job, but they're a pure infrastructure commodity play. The differentiating capabilities will be as we open up more and more of these APIs -- like translate, big data, prediction and more. Developers will be able to take advantage of hundreds of years of manpower of building those algorithms. Platform is a very important part of our strategy, and you can see that from the last two quarters of our product launches. And there's more coming.

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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