The latest Google move arrives today. The company announced a Google for Work and Education partner program that aims to make it easier for partners to sell some or all of Google's cloud services - from Google Apps to Maps, Cloud Platform and more.
Within the technical trade press, you'll hear about resellers making more money. In fact, Google's top partners will now make about $15 per seat per year, up from $10 per seat per year.
Thinking (Much) Bigger
But there's a bigger story here. It involves Google's enterprise battle against Microsoft. And it's all about simplicity. In some ways, buying and deploying Microsoft Office 365 remains too complex - with at least six options for some customers to navigate.
In stark contrast, Google is going from seven different partner programs down to one. During a phone briefing on Wednesday, Murali Sitaram, Director of Global Partnerships & Strategic Alliances for Google for Work, told me:
We're not a professional services shop. We're a technology company [focused on] speed and scale. [The Google Apps offerings] are all about the success of the end user.
It's a safe bet Microsoft would make a similar claim about its classic Office productivity applications, which are being transformed into the Office 365 cloud services.
Google's simplified go-to-market cloud strategy will roll out worldwide in January 2015, according to Sitaram. Having covered the Google App cloud business since around 2008, I know Google has a habit for making good on its go-to-market promises.
There's also another lesson here: In some ways, Google is building a bigger ecosystem of support companies to move up market into the enterprise versus Microsoft. Google's direct sales team simply can't support every Global 2000 company, nor can it support thousands of additional mid-market companies.
Cloud Dollars And Cents
For investors, the Google Apps and cloud strategies are worth watching. Generally speaking, Google doesn't disclose its quarterly or annual cloud revenues. Neither does Amazon.com (NASDAQ:AMZN). But I suspect that will change within the next few quarters.
As Google's classic paid search business continues to face maturity and growth pressures, the company will be forced to describe dollar-and-cents growth in other businesses.
No doubt, the Google cloud business is growing - reaching about $1 billion in 2013. It's a safe bet double-digit growth continues this year. But the competition also is intensifying.
Microsoft CEO Satya Nadella's cloud-first, mobile-first strategy is working. The company's commercial cloud revenues - across Office 365, Azure and Dynamics - grew 128% in Q1 2015 vs. Q1 2014, according to Microsoft's most recent earnings report. And Amazon Web Services is no slouch, with an estimated $5 billion in revenues this year, according to Pacific Crest.
Where does Google go from here? Watch for the company to cross-pollinate between Google Apps (SAAS) and Google Compute Engine ((IaaS)). The idea is to get software developers to move their applications onto Compute Engine, then link those applications to various Google Apps offerings. During my call yesterday, Google's Sitaram said that trend was underway.
For investors who are long Google, the cloud strategy (speed and simplicity for enterprise end users) sounds compelling. But continued price wars and feature wars against Amazon and Microsoft means this isn't an investor journey for the faint of heart.
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