Google and Are No Perfect Match

By Clint Boulton  |  Posted 2010-05-30 Print this article Print


Google lets customers come to them to buy Google Apps, while likes to knock on doors and sell it the old-fashioned way, Vegesna said.

This is part of the reason why Google charges its customers $50 per user, per year for its software, while sells its CRM for $65 per user, per month.

These approaches won't jibe. "Cultural incompatibility is the primary reason that kills acquisitions," Vegesna said.

Forrester Research analyst Sheri McLeish said there is no urgency for Google to purchase because it already offers some CRM and other functionality through the Google Apps Marketplace.

Launched March 9 in what many see as a direct challenge to's AppExchange, the Marketplace lets third-party software developers sell applications that integrate with Google Apps. was notably absent from the initial launch of 50 partners, and while conspiracy theorist like to wonder whether relations have grown frosty, the integrations in the Marketplace resemble the integration Google and already enjoy.  

"Google enjoys this experimental phase to find where there next billions are coming from I don't think there is any urgency in acquiring," McLeish said. "Would it be surprising? No. Is it expected, or required? Not necessarily, they can work in partnership.  

Gartner analyst Whit Andrews struck a similar tone, noting that Google acquires for technology, not for market position (YouTube being an obvious exception).

However, he noted Google would have sudden and almost irreplaceable access to the enterprise.

But Vegesna said Google CEO Eric Schmidt and his team would worry about when they would get their investment back. At $86.53 a share, Google would have to pay billions for (think anywhere from $5 billion to $15 billion depending on the premium).

"I seriously doubt Google would get their money back," Vegesna said, pointing to the $625 million Google paid for Postini for a Google Apps business that makes roughly $100 million per year.

Of course, Google picking up would intensify competition with other providers of SAAS CRM, including Microsoft, SAP and Oracle. Google has proven it's comfortable competing with anyone.

There aren't many areas on the Web that Google isn't playing in these days, and the search and Web services giant hasn't been bashful about snapping up companies

"If you're in technology now, Google is competing with you," said Andrews. "There is nobody that they're not competing with. "But if you're going to compete with somebody, you do it on your own terms."



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