Our search and findability guru, Sue Aldrich, characterized Google’s latest enterprise software additions as the camel’s nose strategy. First, Google offered search appliances for the enterprise and the desktop to make it easy for employees to “Google” the information within their companies the way they use Google to find external resources. Then, Google offered consumer email, which many business people quickly adopted as an alternative personal email service. Now, Google is providing “Google Apps for Your Domain” which offers good-quality email with integrated calendaring, chat, VOIP and other features that will appeal to small businesses and to end users within large enterprises as well. Google Earth for the enterprise is picking up traction as more and more companies use the app for strategic applications from construction to oil exploration to logistics to environmental applications.
Will small businesses and mid-size companies begin to question the wisdom of paying a full-time email maintenance staff to keep their email lifeline flowing, when they can avail themselves of “free” (easy-to-use email, calendaring, Web page creation, and hosting, etc.) from Google? You bet!
Will large companies move their employees off of Microsoft Exchange or Lotus Notes to Google Apps and Gmail? Probably not.
But will large companies allow employees to use Gmail as a back-up email alternative for situations in which their corporate email is compromised by virus attacks or inaccessible? Absolutely!
And, will people who work together in businesses, educational institutions, and not-for-profits of all sizes use Gmail, Google Calendar and Chat, VOIP and Writely (the Web page creation software Google acquired) as the default platform with which to coordinate the work of groups of people across organizational boundaries? Absolutely!
Using free Google apps as your back-up email platform and your easy-to-use cross-organizational collaboration platform is a no-brainer; or a camel’s nose. Once you find yourself doing most of your cross-organizational work—e.g., the work that involves collaborating with customers and partners to get things done together—using your Google platform, where will you begin to gravitate for your “real work?” That’s the camel’s nose. Soon the camel is sitting comfortably inside your corporate tent and you’re serving it tea and crumpets!
Inobtrusive Ad-Supported Software Services
What works about the “Google Apps for Your Domain” and the other Google services’ business model is that many of these services are absolutely free to the business and to their end users, yet the services are funded by the revenues derived from ads that show up on the search results pages from searches launched. Since we’re all accustomed to seeing ads on Google results pages anyway, this doesn’t degrade the quality of the user experience.
If you insist on a non-advertising-supported model (which I don’t think most small businesses will care about), Google plans to offer that model, as well as an upgrade path for fee-based services if you want more hand-holding, more storage, and more stringent security functionality.
But remember that Google doesn’t need to charge for software in order to make money. The more information Google can access and mine, the better it can tailor the search results you’ll see, and the more relevant and therefore the more valuable the ads it serves up when you choose to search the Web.
Company-Branded Business Applications and Landing Pages Google is happy to provide corporations, educational institutions, and not-for-profits the ability to run Google apps and to co-brand them as their own. The look and feel of your company’s email and applications and that of your business starter page (read “portal”) from which employees will access all of your Google-branded and third-party applications is under your control. Right now, you have minimal choices: colors, your own logos, which widgets (e.g., portlets) you want to make available to all employees—you can lock down one of three columns as “required” apps and content. The rest can be completely customized by your end users.
PREDICTION #1: Fast Adoption of “Google Apps for Your Domain” by Small Businesses
The fastest adoption of Google Apps for Your Domain will be by small- and medium-sized businesses. (Right now the beta accounts are capped at 25 users.) This is a sweet spot for Google and a no-brainer for just about any small business.
PREDICTION #2: Google Apps for Your Domain Becomes a Defacto Collaborative Platform for Cross-Organizational Teams
Google’s “openness” and its existence as a defacto standard makes it the easiest choice for cross-organizational groups to set up domain names to use in order to create their own “virtual organizations” through which to coordinate just about any project. Today, many people do this through Yahoo! Groups and other consumer-oriented platforms. But Google’s ability to be the common denominator in our business and our personal lives makes it a better bet. Since you can only get a Gmail account by being invited by another Gmail user, it’s a great way to grow the user network, and so far, knock on wood, Gmail is spam and virus free.
Granted, there are lots of collaborative features that workgroups need and that the basic Google applications don’t yet provide, but I’m assuming that groupware functionality will turn up faster in the Google applications world than it will in the Microsoft and IBM relatively “closed” worlds. (Ray Ozzie is racing Google on this one.)
I’m assuming that Gmail becomes the common platform that links all my different personas. While different people may use different Gmail domain names to reach me for different purposes, these are all automatically organized in my Gmail inbox based on the domain names/project identities that are associated with each one.
PREDICTION #3: Google Becomes the Winning Platform for Customer-Led Innovation in Business Application Development
Everyone is writing and blogging about how Google’s small business and enterprise application strategies adversely impact Microsoft’s Enterprise Office and OfficeLive strategies. It goes without saying that Google has thrown down a gauntlet to which Microsoft will need to respond ASAP. But I don’t believe that the battle is really over OFFICE applications. The current battle that’s being waged is the battle over who will “own” (and monetize) the innovation platform that business end users and their customers will use to co-design their work together.
For example, what intrigues me the most about Google’s current implementation is how easy it is for end users to create and/or customize Google Gadgets they can put on their Google home pages and/or on their new business home page (Personalized Start Page) powered by Google.
The current ever-growing set of Google Gadgets is very seductive. They range from the extremely useful: show me my last 20 Google searches; to the personally appealing: show me the nearest Starbucks; to the business-strategic: show the current locations of every delivery truck in real time. Think of this as your “poor man’s intranet or company portal.”
To be fair, Apple and Yahoo! were first in creating a vibrant ecosystem of customer-generated gadgets and widgets and they have thousands more than Google currently offers. But Google has been the most aggressive in promoting end user-created Gadgets for business applications. For example, the new Personalized Start Page that comes with Google Apps for My Domain lets me create and select a set of content and Gadgets as a default set for all employees. But I can also have a group of company-approved Gadgets and content and a larger set of “you find or create anything you want and share them with all of us” Gadgets. Today, my employees and co-worker/colleagues will be able to access our Google Start Page as the launch pad for just about anything they need to do or to find in our company. Tomorrow, I predict that Google will realize that customer portals can be quickly built using the tools that are now being offered to small business users. Business customers will gravitate to organizing their work around projects and availing themselves of the content and Gadgets that help them do their jobs. Customers may “come to” a PSGroup Web page blog or portal, or they may subscribe to a syndicated feed of those Gadgets and content they care about, and/or they may collaborate with us and with one another through common domains and services.
That’s the point. Google is doing what Yahoo! and Apple are not going to touch—business applications, business portals, syndication of business information. Google is offering businesses the opportunity to let their end users create and syndicate content and Gadgets that other employees and customers can use. It’s easy and seductive to create a customized company portal, complete with company and Google co-branded applications, into which your employees and soon, your customers, can add any application functionality they need and can create, copy, and/or reuse and customize from any other user’s Gadgets. Stay tuned…
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Jonathan--Another great and thoughful post! Kudos!
Among the numerous great suggestions you make, my favorite is this one:
• Innovations in product, service, or capabilities should ultimately focus on helping customers meet their goals. I believe businesses focus too much on how a product or service will help them succeed and not enough on how they can make their customers succeed in their markets or financially.
HEAR HEAR!!!
Patty
Posted by: Patty Seybold | September 25, 2006 at 11:07 AM
Patty,
The following are some observations on the subjects – collaboration, innovation, and customers.
My first observation is that I worry when tools are the answer to problems, whatever they might be. SFA and CRM were the answer to the sales problem but time has shown that sales execs needed to first understand their people’s skills and the processes they used to execute sales activities. The software would then enable an efficient and effective way to implement them.
In other words, skills, processes, and tools go hand-in-hand and changes to each can initiate changes to the others.
The same is true with collaboration tools/software, be it Google’s, IM, Groove, or even the telephone (e.g. must plan out the call’s content, have the skills to get the message across without face-to-face contact, and a process that includes follow up activity).
My second observation is whoever runs collaboration projects to produce innovative results must be extremely careful selecting customers. For example, customers may have “hidden agendas” (I’m not talking about “stealing” intellectual property – a security issue) that may steer the innovation project to a customized need when the goal was to produce a broader market solution. Or, chosen customers may not have the “knowledge” required to participate, adding information that may be in error or out of context. In essence, I worry about producing “flawed innovations” due to “flawed information.”
Both statements being said, it’s always a good idea for vendors to get closer to the customer. Also, I believe I’m telling you something you’ve already thought about. But your “Outside Innovation” concept is saying something more profound: that collaboration with customers is in itself an innovation. And I believe that to be true. Here’s why.
Business will innovate its strategies – in this case, adding collaboration as a strategic element to its management and individual contributor execution abilities – in the quest to find solutions to their big problems as well as creating unique products and services. Today, those big problems are (related to this subject):
• Commodization of products and related services. When strategies converge so that price is the only difference, businesses have to find new value to add to their propositions – in the form of benefits – and execution abilities. If done, then the business can charge a better price since differences can be priced exponentially, not linearly.
The problem of proper pricing is related to another of business’ big problems; growth and profits.
• Customer loyalty. Getting and keeping customers to buy more and become, what I call, “most valued customers” - repeat buyers, ambassadors for their vendors, conscious of vendor support costs, etc.
• Time, theirs and their customers. Neither have enough of it so innovation activities better not add time to either’s day.
But solutions to these problems tend to get defined by conventional beliefs such as:
• Companies believe they know what the customer needs. (I worked for hi-tech firms a large part of my career and this belief is borne out by my experience.)
• It costs too much in time and effort to learn about customers, inside out.
• Customers will tell their suppliers what they want.
These beliefs drive the principles that management develop to operate by today, driving their activities that define their business’ strategies and business models and the execution thereof.
So, what management needs are new beliefs, like adopting the opposite of those above. From these reversed beliefs, I developed the following principles:
• Customers successfully using your products and services doesn’t mean they’re successful. This should drive businesses to look beyond how they presently help clients and inquire about how customers operate, their competitors, market pressures, what they do successfully and unsuccessfully, and the causes of any existing problems (just to name a few areas).
• Customers are the real source of market “ideas.” Know them better than “product and price.” Even if businesses don’t care about the unrelated problems their customers may have they still should look to them for ideas to find new products and related services and improve existing ones.
Innovative customer value is usually hidden in their total problem set and is hard to discover without working differently, asking different kinds of questions, and involving as many company and customer people as possible.
Also, if customers buy solutions with either missing or “fail to perform” common market features, I believe they will not tell the vendor, just look for those who will provide them. Time is valuable.
Both of the last two comments imply that companies rely too much on information customers bring to them. I believe they have to proactively ask customers what they want, what they need and what problems they face that goes beyond the solutions their products and related services provide. I believe when asked, and there is sincerity in the reasons for asking, then customers will answer. It’s developing trust.
• Innovations in product, service, or capabilities should ultimately focus on helping customers meet their goals. I believe businesses focus too much on how a product or service will help them succeed and not enough on how they can make their customers succeed in their markets or financially.
• The focus on competition should be on how they find “value” not the “value” itself. Following the competition is an age old problem. This principle continues with “keep an eye on the competition” but differently. If the competition is “winning,” how, operationally, did they get into that position? The value they are now selling is moot. The business can copy it but that still leaves them behind.
In other words, If the competition is eating your lunch it’s because they find what the customer wants better and faster than you do.
• “Ideas” can come from anybody in the value chain. Involve them! Customer centricity means the business’ partners, suppliers, and affiliates have knowledge about the customers. Use all internal people, as well as others in the value chain, to generate ideas for improving and adding value (to the proposition and execution abilities).
• Business success and growth comes with customer success and growth! Enough said.
• When Businesses set expectations about value performance, customer experiences have to match! The perceptions businesses have about how their solutions should work are just that, perceptions. They have to be tested against expectations customers have about the solution’s performance and then tracked to make sure the expectations are experienced. Keep in mind, the best experience a customer can have is getting the results they expect and – the experience of a non-experience – not experiencing results they don’t expect.
If these principles are accepted, it should drive management to develop a set of activities to put into practice that will help ensure their organizations work as expected. We are all familiar with the “normal” management interdependent activities, such as:
• Developing strategies and tactics (at each level in the organization).
• Managing budgets and other financial responsibilities.
• Hiring and managing people and all that goes with ensuring they can work effectively.
• Making decisions.
• Developing appropriate measures, implementing them and using the results to feedback any changes to operations or people.
• Communicating strategies and tactics to all appropriate enterprise entities – customers, suppliers, etc.
• Participating in and overseeing initiative planning activities.
These management components require skills, processes and tools and none work by themselves. I’m only listing them to make two points:
1. Each of them needs to include any new or modified activities that reflect the principles mentioned above. For example, when developing strategies and tactics, include the results that customers can expect from successfully completing the associated initiatives. Or, when designing jobs, make sure the activity starts with customer needs.
2. There are five more major components that have to be added to and integrated into the mix: managing collaboration, change, customer centricity, business processes, and empowerment. Although there are some overlapping skills among (all) the components, each requires some additional ones not to mention properly integrating each one’s “process” into management’s overall process map.
For example, change management is usually thought of as something that can be done once a project is complete. One of my colleagues was hired as a change manager for an SAP implementation. Only problem was that the project was, basically, over except for getting the business’ personnel to use the system. I can’t begin to add up the amount of time it will take to just take care of the “rework” that will take place, which would be minimized if “change” was integrated into the project from the start. That’s managements’ job.
The same is true for collaboration. Can collaboration work without managing change or empowering participants? I think not.
Business innovation will be created by mixing and integrating all the mentioned management components to create a system that proactively involves the entire customer “picture” in determining future products and services as stated in the principles outlined earlier.
Change isn’t easy. But by asking a few questions, one can (hope to) get management to think about how they need to change their present environment. For example:
• I’ve done some reading about “The Long Tail.” I took something different than the technological aspect away from the concept (even tough I do see its importance), which I believe to be more profound: Let’s say the concept that lots of buyers want “unpopular” products and services is true. That means, to me, there’s a large market for a large number of unique product characteristics. Shouldn’t this be a signal to business that uniqueness is in? How do they find the unique characteristics that matter? They must change the way they find out.
• Can businesses save time by knowing more about customers? Which customers are “good?” How is the business “cultivating” good customers? Which ones are risky and why? Are the most profitable customers the most loyal (or most valued)? Customers want things on their terms. What are they? How does paying too much attention to the competition “blind” the business to the advantages customer knowledge brings to the table?
• Strategy is usually thought of as “How do we beat the competition?” Isn’t it more important to say “How do we create customer loyalty?” Loyalty makes the competition (somewhat) moot.
• What costs more, knowing what a customer wants or losing the customer to a competitor? How much does it cost to figure out why they left? Isn’t it less costly to understand their issues in advance, keeping them from becoming “unsolvable?”
More questions can be developed, I’m sure. But these questions along with the mass of data about “customer switching” numbers, cost of switching, poor service impact, and much more I’m sure you know better than I, should be, at least, more than a starting point for initiating change.
I know there are lots of issues that I haven’t addressed, like customers are wary of sharing information for fear of compromising their competitive advantages. But I have been thinking for some time about how management has to change in order to embrace customers more fully and to make improving their value propositions and execution abilities (execution directly affects customer experiences) a priority and this is some of the results.
Looking forward to reading some comments on what was written.
Jonathan Narducci
CornerStone Cubed
Posted by: Jonathan Narducci | September 19, 2006 at 08:06 PM
Ahh! Good catch and question, Joe. I made that assumption, because when I applied and asked for 20 users for my small consulting biz, I was offered 25.. Maybe Google adds x% to what you ask for!
There is one BIG Gotcha, which I kind of suspected, but now know to be true. If you want to use Google Apps for Your Domain and you have another form of email connected to that domain (e.g., in our case, Lotus Notes), you have to pick one or the other. You can't have both.. that doesn't work for any business that already has another form of email coming to its domain name and wants to try a gradual migration....
Posted by: Patty Seybold | September 06, 2006 at 09:58 PM
Are you sure Google's capping apps for domain at 25?
Posted by: Joe Pastry | September 06, 2006 at 08:57 PM