Can Google be trusted with enterprise data?

Alan Pelz-Sharpe is an incisive Enterprise Content Management system analyst. He blogged today that Google’s aggressive use of its users contact data in the recent launch of Google Buzz indicates that Google is unsuitable for the enterprise, as they can not be trusted with enterprise data.

Alan’s statement is important in the context of the battle between Microsoft and Google for the provision of cloud based e-mail, calendaring and collaboration applications to the enterprise. The battle has only recent commenced but it is already developed into both a price war and a war of words.

  • Microsoft’s offering is BPOS (Business Productivity Online Standard Suite). BPOS provides enterprises with the following applications, hosted in the cloud: Exchange Online, SharePoint Online, Office Live Meeting, and Office Communications Online
  • Google’s offering is Google Apps which packages up Gmail for business, Google sites, Google Groups, Google Docs, Google Calendar and Google Video

Both of these products are immature: Google Apps has been on the market longer, but Google are new to enterprise computing. Microsoft have vast experience of enterprise computing but little experience of providing software-as-a-service (SaaS).

In terms of functionality BPOS, and in particular SharePoint, provides far more features than Google Apps. If levels of service and price were comparable you would expect Microsoft to win this war (though small enterprises may prefer the relative simplicity of Google Apps).

The fact that Alan Pelz-Sharpe sees trustworthiness as a key factor in judging a SaaS vendor shows how different the SaaS space is from the traditional packaged software space. In the packaged software space you did not have to decide whether you could trust the vendor with your data – they would never see it. You simply needed to be satisfied with the features that their software possessed, the financial stability of the vendor and their road map for their product.

In contrast SaaS providers will be judged on the supplier’s reliability, quality of service, security and trustworthiness, as much as on the features of the software. The SaaS market plays in many ways to Google’s strengths. Their success has been built on the resilience of their infrastructure. Their search engine is hardly ever down. They have always guarded the secrets of how they configure their data centres as zealously as their search algorithm, indicating that they regard running data centres as a core strategic competency.

Conversely the move to cloud computing negates two of Microsoft’s strengths:

  • Their monopoly, through Windows, of operating systems in the enterprise is negated because organisations can run applications off rival operating systems based in the cloud, or subscribe to applications (like Google Apps) that run off rival operating systems (like Linux).
  • The expertise that enterprise IT departments have built up over the years in the administration, upgrade and extension of Microsoft products gave them an edge against competitors. Organisations were reluctant to buy software that their IT staff were not familiar with. In the SaaS world applications are administered and upgraded by the provider, and the scope for developing and extending them is limited

Google and Microsoft are big, cash-rich companies, with plenty of freedom to manoeuvre, who act in what they see as their best commercial interests. I do not want to condone Google’s aggressive use of Gmail users’ contacts data, (it made me glad I do not use Google to maintain my contacts). However the commercial imperatives behind Google’s over aggressive launch of Buzz are not the same as Google’s drivers to enter the SaaS space, and I do not think we can necessarily assume that Google is less trustworthy with enterprise data than its competitors purely on the basis of their actions in the launch of Buzz.

The reasons behind Google’s aggressive launch of Buzz lie in the threat that Facebook poses to its monopoly of the web advertising market. Google’s monopoly of web advertising stems from their monopoly of search, and from the fact that search was until recently overwhelmingly the major route through which individuals were directed to websites.

The growth of Twitter and in particular of Facebook has altered that. More and more traffic on the web is directed by links from friends on Facebook or Twitter, and this is reducing the influence of Google search results. Steve Rubel recently reported that Facebook now drives more traffic to major websites than Google. In another post Rubel said that ‘Facebook is unstoppable, they aren’t just the next Google, they’re the next web’

Google recognises that in the medium term search will lose out to discovery through social networks. People are more and more using their Twitter network, and/or their Facebook network to bring them news, rather than going out and searching for it on Google. Google will only be able to retain its dominance of advertising if it can provide a discovery service that is both personalised to you as an individual, and social. It needs to be tailored to who you are, where you are, who you are interested in, and who your friends are. This is why Google is turning itself from a search company into a software company, it needs you to use its applications because that is how it will get to know you.

Contacts data was at the crux of the controversy over the Buzz launch, and contacts data is crucial to Google. The key advantage that Google’s Android phones have over Apple’s iPhone is that when you log on to your Google account on a Google phone it instantly synchronises your Google contacts and Google calendar to your phone. In contrast getting my contacts and calendar synched between my Mac and my iPhone is a service that Apple charges me £59 a year for (it is worth it to me, and I love the service, but I do not think the charge is sustainable in the face of Google providing a similar service for free).

Contacts data is important to people. They want to keep it in their control as they move from job to job, and device to device. Facebook and LinkedIn function in many ways as address books, but they do not tend to hold phone numbers and have no coverage of people that are not users of those applications. The perfect contacts book would be available when I use my phone and when I use my laptop. It would link with my e-mail, and it would have links to my contacts’ identities on applications such as Twitter, Facebook and LinkedIn.

Google are in a better place than their rivals to provide just such an integrated contact service:

  • Apple are dominant in smartphones, and the iPad could give them dominance of the netbook/tablet space. Their contacts and calendar applications are more pleasant to use than Google’s. But they are weak in e-mail provision and do not provide a social network.
  • Google have the smartphones, the e-mail service, and now with Buzz they are making a play for the social network space. When the Chrome OS netbook is launched they will rival Apple in the netbook/tablet space
  • Facebook is by far the strongest in the social network space, but does not (yet) do e-mails or phones or any sort of device. There have been rumours about a Facebook phone and a Facebook e-mail service for some time and both would make sense.

Google’s land grab with Buzz was a bid to get into the social network space before Facebook’s extension outwards became unstoppable. They needed to get as many people as possible using Buzz as quickly as possible and that is why they launched it on users with little or no warning. They pushed Gmail users at breakneck speed through a series of questions without giving them any way of judging what the consequences of their choices were. Google used Gmail users’ contacts to suggest people for them to follow, and to suggest them to others. However the consequence of this aggressive strategy was that some people found that lists of people that they frequently had Gmail correspondence with were being displayed on their Google profile.

It was an aggressive move, but it is an aggressive market. Google has more to lose from standing still and seeing Facebook overtake it than it does by aggressively moving to occupy some of Facebook’s space.

Alan Pelz-Sharpe points out in his post that the enterprise market accounts for only 1% of Google’s revenue. He is right that the enterprise market is far less important to Google than it is to its competitors (for example Microsoft). However Google’s war with Facebook is not taking place in the enterprise. Facebook is not trying to compete for the enterprise (Microsoft holds a significant stake in Facebook and the two companies have not encroached on each other’s space). I do not believe that Google has anything to gain by acting as fast and loose with enterprise data as it did with customer contact data when it launched Buzz. For these reasons I am reluctant to read across from their actions in the launch of Buzz to make any conclusions as to the trustworthiness or otherwise of Google in relation to enterprise data

One thought on “Can Google be trusted with enterprise data?

  1. Have you read Google’s contract for use of their products? No records manager would accepts those provisions. Even storage of boxes provides better contract provisions! If you want to see what good contract clauses for storage of data and other types of information look like go to ARMA’s standards and guidelines in their bookstore, particularly Guideline for Evaluating Offsite Records Storage Facilities and Guideline for Outsourcing Electronic Records Storage and Disposition. A guideline for records and cloud computing is now in the works and builds on these two guidelines.

    Any enterprise data to be stored off-site whether it is in the cloud or a dedicated service provide must have some protections for the customer’s data. The major problem with Google and others is they are free. The risks are very high, but free is hard to beat!

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