Google’s revenue from Google Apps for business was about $136.6 million for the nine months ended Sept. 30, according to Gartner. Annualized, that’s about $185 million in Google Apps revenues — a pretty big number compared to most cloud services providers that offer SaaS applications. Still, the Google Apps revenue estimate represents only about 0.5 percent of Google’s overall revenues — a drop in Google’s revenue bucket.
Does that mean Google Apps isn’t strategic to Google? And where do channel partners fit into this Google Apps revenue discussion? ZDNet accurately points out that Google Apps remains extremely strategic to Google. The reason: Google Apps pressures the Microsoft Office business, potentially distracting Microsoft away from a full-scale Internet search engine war, and also forcing Microsoft to adjust its pricing models for Office in the cloud.
For channel partners, Talkin’ Cloud has frequently made the following points: Cloud VARs and MSPs won’t get rich if they simply resell Google Apps. However, those Google Apps channel partners can earn plenty of consulting fees migrating customers off of legacy email and office systems. Also, cloud integrators can profit by stitching together multiple offerings from the Google Apps Marketplace.
Also, Google Apps play a key role in Google’s Android and Chromebook strategies. Millions of Android smartphone users, for instance, are in position to leverage Google Apps. And the Chromebook for business strategy involves low-cost notebooks running cloud-centric software — Google Apps included.
Bottom line? Wall Street investors likely don’t worry too much about a Google product line that represents 0.5 percent of company revenues, according to Gartner’s estimates. But placed in proper context, Google Apps — heads-up against Microsoft and traditional PC software — remains extremely strategic to Google.
While the Google Apps installed base continues to grow, the cloud suite has also faced its share of challenges — including potential turbulence with the City of Los Angeles.
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