Google Apps Draws Enterprise Users

In August 2008, Google Gmail and Google Apps experienced periods of downtime that had business users howling over the loss of both communication and applications.

For some, that may have led to a bit of soul-searching over the viability of Google's Web-based applications as a foundation for an enterprise. But according to a Jan. 30 report released by Technology Business Research, more than 10 million individuals from over 1 million businesses—including 3 million active users from educational institutions—have chosen Google Apps as their enterprise software.

This represents "slow and steady progress in attracting enterprise and SMB [small and midsize business] customers to [the] Google Apps suite of office and communication tools," according to the TBR report.

"Right now we have more than 3,000 businesses every day signing up for [Google Apps], up from 2,000 a day a year ago," Andrew Kovacs, a Google spokesperson, said in an interview. "We're seeing some benefit from current economic conditions, where people are looking to save money, and Google's an easy way for them to do that."

When the paid version of Google Apps was launched in February 2007, Kovacs added, SMBs adopted it first; in the second half of 2008, however, larger companies such as Genentech have also integrated the platform on an enterprise level.

Earlier in January, Google initiated a reseller program to kick-start sales of the paid version of Apps, with a focus on the SMB segment. Although Google experienced a substantial 68 percent dive in revenue between the third and fourth quarters of 2008, the results represented 18.1 percent year-to-year growth.

"For people starting small businesses, it's easier to use Google Apps than to build a server," said Abner Germanow, an analyst with IDC. "Downtime on any system is never desirable, but an hour of downtime for a small business isn't necessarily critical."