As part of our analysis of the latest trends impacting the enterprise market, such as Software as a Service, cloud computing, enterprise FMC, consumerization, and virtualization, Frost & Sullivan interviewed Mr. Rajen Sheth, Senior Product Manager for Google Apps, Google's enterprise productivity suite, which is making significant inroads into the enterprise space. In this interview, Alaa Saayed, Industry Analyst at Frost & Sullivan's Unified Communications & Collaboration group, discusses some of these key trends, Google's new role in the evolving marketplace, and its key areas of focus in the coming years.

Rajen: Sure, Alaa, my name is Rajen Sheth, and I'm the Senior Product Manager in charge of Google Apps, which is our cloud computing platform for enterprises. It includes a variety of communications and collaboration apps that we provide to the consumer world, brought into the enterprise context, as well as a set of applications that are specific for enterprise, that we brought into our context as well. And going forward, we will not only allow platforms and other technologies to be able to extend our apps, but in addition, you will be able to build your own apps into our infrastructure.

I'm part of the Google Enterprise Division, which started about six years ago. About eight years ago, we released our first enterprise product, which was the Google Search APPLIANCE. At that time, Google would still experiment with whether or not we could sell products to businesses. We got a very solid reception with Google Search Client, so we created this division specifically around enterprises and, at that time, it was very much focused on our Search Client solution. I actually came into Google around that same time (about six years ago) with the specific objective to move the enterprise division into new areas beyond just search, beyond just a client. The effort that I ended up heading is the Google Apps for Businesses, which is what I'm the product manager for today. This effort aims to bring all of the innovation that we have for consumers into the business world.

We started this project back in 2005, and the initial goal was to focus on the SMBs as well as the educational market. We actually deployed our first university (first business) at the beginning of 2006 and, in early 2007, we launched our enterprise product. We started targeting the upper end of the small business market, mid-market and large enterprise; especially over the course of the last year and a half, we started to see an explosion in the large enterprise market.

We started migrating a variety of very large enterprises into Google Apps. There are companies like Motorola that have fully migrated into Google Apps, and Genentech, which has also fully migrated into Google Apps. We have several dozens of very large companies that have now fully migrated into Google Apps.

Our initial selling point has been focused on messaging - essentially, replacing these organizations' Exchange and Lotus Domino servers and moving them in the cloud for messaging. But in addition to that, we are providing the collaboration tools with Google Docs, Google Sites and Google Video for business so that we can spur increased collaboration within businesses. That's where we are right now, and we are looking to expand this offering quite a bit. We will be adding new types of collaborative apps and enhancing the collaborative apps that we have. We will also be adding in products like Google Apps Engine so that corporations can develop their own apps on our cloud infrastructure.

Rajen: It depends on when you asked that question. If you had asked me three years ago, when we first started this, it was absolutely very, very difficult at the time. There were a variety of factors such as product maturity at that point in time; we were a very young product. Also, the cloud model was not yet very well accepted in the industry, and we didn't have a lot of reference customers on the platform.

Where we are now is a very different story. Almost every CIO that I talk to is planning a cloud strategy, and the value proposition of the cloud is very widely known at this point. For most corporations, now, it seems, it's a matter of WHEN rather than IF they are going to move to the cloud for a lot of their core services. That said, this is definitely a new technology; we've gotten a lot of solid early adopters onto the platform, and are now getting beyond the early adopters. We have important companies looking at the value proposition of this, comparing it to what they have for their messaging systems, and moving to Google Apps; we are a serious player in most of the conversations we are having about messaging out there.

Rajen: We now have over 2 million businesses that are on Google Apps and over 20 million active users, actively using Google Apps every week on the platform. In regards to the segmentation, it is definitely a mix of SMB, mid-market, and large enterprises. Now, in terms of the volume of companies, obviously the volume would lean towards the small business space, but in terms of volume of users, it actually is pretty evenly split among large enterprise, mid-market and small businesses.

Rajen: That is a good question. I think what you will see is more and more communications products being incorporated into the Google Apps suite. What we've done even over the course of the past year is, we've incorporated things like one-to-one video chat directly from the Web browser and one-to-one voice directly from the Web browser, in addition to our Google Doc suite, which provides presence and all the typical things you would expect from an IM system.

We also have Google Voice, which is not yet integrated into the Apps suite, but there are a variety of companies that like it - companies that are oriented towards helping people communicate more effectively. Now, whether or not this becomes a full unified communications suite, I think is yet to be determined. I think what you will see is that we are going to provide a lot of the elements that people expect from a unified communications suite and, in addition to that, provide a lot of integration points. For example, Google Talk is based on the SMTP standard so that it fits into other systems. We have partners, for example, that have integrated Google Talk with other unified communications systems to have a bridge between our systems and others.

Rajen: Yes, we definitely plan to offer these capabilities within enterprises as well. Right now, it is a consumer-only product, but we plan to bring it soon into the Google Apps Suite as well. I think that what we are doing with Buzz could actually be revolutionary for businesses. There are a couple of aspects to it that I think would be really interesting.

The first is that we are seeing a gap in the industry related to traditional messaging tools that are out there. There is a lot of information that is either not communicated or that is communicated only in silos. For example, I wouldn't send an email to everybody telling them that I'm meeting with Frost & Sullivan right now. However, with an update stream you start to build this additional paradigm of communications where you can put these passive updates into the system. Therefore, I can update my status message; I can update it as part of Google Buzz, and people that are interested in it can consume it. They can consume it as part of a stream, search for it, and do a variety of things.

So it is a very different paradigm than regular email, which is assumed to be actionable. When you get a message in your inbox you are assuming you have to read it, and there is potentially some action you have to take. So, I think what we will see with Buzz within the enterprise is that, there will be more information that is going to be communicated.

But in addition to that, a lot of time communications by emails are in silos: I will send a message to 600 people asking them a design question, or somebody else will send another message to 600 people asking a different question. There are these little silos, and the conversations that are happening there, and the decisions that are made are typically not open to others, while in reality there is nothing really confidential about them and they should be open to others. That is another area where Buzz will help out.

One thing, for example, that we've done internally here is that we use Buzz for asking design questions. So our founders will throw out questions about "What should we do about an X technology?" and people would be able to comment on it and add their thoughts to that, and we are using it as a way to spur innovation and creativity within the organization. So I anticipate things like that happening with Buzz as well within the enterprise.

Now you also mention integration with email, and I think this is critical, too. There are other technologies like this in some enterprises right now, but often times they are disconnected from email. What I'm seeing with Buzz, the great thing about it is that, it is connected with email - connected with the interface that people log into every morning and see every day. This, I think, is really going to help spur usage within the organization when we release it.

Rajen: Absolutely, I think you brought up a great point. There are two views coming from the businesses. The traditional enterprise view on applications has been relatively conservative. People are taking extreme care when rolling out applications, particularly to validate that they are secure and also make sure that the IT department can handle the application. It takes time to go and deploy a new version of whichever software they need to: it needs to be supportable and comply with a set of different things.

On the other side, in the consumer world, you see brand-new technologies released almost every year that are advancing what people can do with communications, and that includes everything from the kinds of applications that we have to smartphones to a variety of technologies that are out there. And we see employees essentially get frustrated. They go to their home and have access to all these great technologies and then when they come to work, they literally have to turn back the dial five years, to technologies that were available five years previously.

So, that is essentially the mission of Google Apps - to give people access to that consumer innovation, but do it in a business context; provide it to them in a way they can use it for the business - both in terms of use cases for business, plus policies, compliances and security. So, what we've done is essentially leverage a lot of these consumer innovations, but we have an administrative framework around it such that IT and security departments can control how these applications are being used. This is everything that you can control within an organization - which applications your users have, which users have which applications, and how people would use those applications.

For example, we have a host of policy controls in Google Docs within organizations, which let them restrict whether or not documents can be shared outside of the organizations. In addition to that, we have a set of security and compliance features on top of the products; everything from blocking SFO access to the product, layering on top your own single sign-on systems, and also things like e-discovery that are built into the platform. The way we architected this is so that any platform that comes to the Google Apps pack gets all these policy and security properties. The truth of the matter is that we've gone through a variety of things to make sure that not only the security of the platform itself is very sound, but in addition to that, enterprises have the ability to set their own policies on top of it.

Rajen: I think there are a few main things here. The first thing is access. I can access my mail anywhere, anytime, on any device, through a variety of means with Gmail and calendar. You know I can be using an iPhone, Windows Mobile phone, BlackBerry, and I will still be able to access all that; I could be at home, on my Netbook, at my desk, and I'm still able to get the same access to the same application. The Web-based experience - that is the experience here, and we've made it such that the Web-based experience is rich rather than being second-class. So access is a lot easier with these applications, which is essential for distributed organizations that have different people with different devices on the move. It makes accessing your data a lot easier.

The second thing is, we have designed Gmail for a world where people get a lot of emails. In fact, Gmail was Google's corporate email system before it was even a consumer product. It was developed for users within Google first, and we think that people could be a lot more productive with Gmail. As we talk to people that are on a variety of systems that are out there, it is amazing how much time people spend every day deleting messages, foldering messages, managing them, etc. They even find it difficult to search for information from their inbox mail or from emails that have been sent in the past. If I needed to quickly look up a critical mail from 2006, in most traditional messaging systems it is very, very tough, and in Gmail it's instantaneous.

The concepts of threading and search can help make email more productive. So, I think what you are going to see from us is to continue to give people a more productive environment. They will be able to access email everywhere at a much, much lower cost than the rest of the industry. That has been kind of the main proposition of why people have been looking at Gmail as opposed to other messaging solutions that are out there.

Rajen: Yes this is correct; this is per user per year.

Rajen: So to start with, these are not in the Google Apps package right now, but the core technologies that we have there are extremely interesting. I think that Google Voice (we are already seeing this in the consumer world) gives you a lot more freedom than you have with the traditional phone systems; even if it is a cell phone or a landline, it gives you a lot more freedom in configurability, in terms of how you manage your phone calls, and also how you manage things like voicemail. It is not tied to a specific hardware, not tied to a phone system either. It is a service that can be generically used across different systems. So I think that, by itself, it can be a really sound value proposition. It remains to be seen how exactly the service will be used in the enterprise space. Obviously, large enterprises have very complex infrastructures with their phone systems, so we are working to figure out what are the greatest use cases within the enterprise space. But I do think that, out of the core technologies out there, there are some interesting possibilities to build on top of.

With Google Wave, on the other hand, what we tried to do is to think about how collaboration would be in the future. Not encumbered by what things are like right now, but more in terms of thinking about where things would go down the line. With Google Wave we took the best parts of a lot of the great applications that are out there and combined them together into a collaborative app. Similarly to Google Voice, we are working with an organization to try to figure out what would be some of the great use cases for us, for Google Wave, and how people would want to use it.

Overall, I think both of these are great examples of how Google has been innovative and how we can constantly think beyond the existing box to do something well beyond. So to answer your question, we are still considering how to best use them in the enterprise, but we believe that these are going to be breakthrough technologies that are going to affect a variety of users.

Rajen: Having worked in different companies, I could say that Google really operates in a very different way than a lot of organizations out there. It really operates in a way that spurs this innovation. I think there are a few elements to it. The first thing is that we are not afraid to look beyond what an existing space is all about right now, and so if you think about it, in many of the cases where Google has been successful, we've reinvented existing spaces. Even in core search; when we came into the market, we were the fifth or sixth player in the market, and then became the market leader over time, similarly with ads, maps, mail and other things. We take an existing space, not thinking about it in terms of how it is today, but what it should be, and how do we make it a brand-new experience.

Another big element to it is the notion of cloud computing, and that is actually one of the things that spur innovation. In many cases where you have to build packaged software, you are forced into a stream where you are releasing major updates every two, three or four years. The problem with that is that you have to think three, four-plus years in advance what is going to be the innovation that you want to push, whereas in reality, innovation happens all the time. With the cloud computing paradigm, we have it such that all our applications are centralized and we can update them incrementally, and that actually increases our innovation rate quite dramatically.

For example, last year alone, we released 109 major new features on the Google Apps platform, and we are expecting to increase that quite a bit this year, too. We are seeing that we are able to innovate, mature and change the applications a lot more very quickly. They are done in a way that end-users and businesses don't have to think about having to do things to get these updates. Typically, if the corporation deploys a patch, the customers have to apply the patch and retrain their users. In our case, what we are doing are incremental changes every couple of weeks, which means that the IT department doesn't have to do anything, and in addition to that, the end-users get used to these things very incrementally over time. So that way we can innovate quite a bit.

Finally, the Google culture definitely spurs innovation. The structure is very, very flat and people are encouraged to think and to take risks, and think in brand-new areas. In fact, we have this philosophy that we call 70-20-10 and basically what it means, we put 70 percent of our effort in the core of our business, but we put 20 percent of our effort in new areas that are beyond the core business that we think might be fruitful. So we think beyond what is making money right now. Then we put 10 percent of our effort in completely off-the-wall things that may or may not see the light of day, may or may not be a great technology. There are definitely some great examples of technologies that have started out in that bucket and that have become some major areas for Google.

Rajen: Good question. To start off with, we think of the problem in a very different way. We don't necessarily think of ourselves as being in particular spaces where we have particular competitors, but rather think about how we can build great end-user technologies that might be well adopted. As a result, we see overlaps in various different spaces; definitely there is as a solid overlap in messaging and, in most of the cases where we are selling, we are a replacement solution for Microsoft Exchange or Lotus Domino within an organization. This is clearly a space where we are replacing things.

However, there are a lot of different areas where we offer some complementary technologies, and people use Google Apps in addition to other technologies that are out there. Thus, I definitely think that there are a variety of ways in which we see people use our technologies. I do think, as well, that this picture is evolving very rapidly and it is going to evolve a lot over time. You see people like Amazon start to move into the cloud computing market, VMware moving towards the cloud and messaging market, etc. The picture is changing very rapidly. The whole notion of cloud computing is actually driving this change, being a new paradigm, and as a result, the competitive landscape will tend to change over time.

Rajen: Typically, a lot of companies right now use Google to replace their messaging tool, and so they will deploy Gmail, calendar and Google Talk in replacement of their existing messaging systems. However, they would also deploy or turn on Google Docs and Sites and the rest of the product suite. What is interesting is that, through time, this second part of the suite (the collaborative part) is what really makes the difference within an organization, that more and more people use the tools over time and in very creative ways. So that is going to be the more important thing for us. I think it is going to be about people starting at particular spaces, but then essentially adopting the whole suite over time. It is therefore tough to pinpoint what people are exactly using, although as I've just mentioned, the pattern is to start with messaging and then expand with the rest of the services.

Rajen: With any new technology like this, the critical thing is that very few customers want to be the first ones to jump into the pool. So the best way we found to highlight our capabilities and show companies how this is a great technology for them to adopt was to highlight the reference customers. The GONE Google campaign has done an exceptional job of doing that. It widely publicized the success stories of Google Apps. We are in a very unique position in that every customer that we rolled out has ended up being very satisfied with Google Apps and nobody has turned back from the platform after rolling it out. So a lot of these stories have helped to convince even more companies to adopt the platform.

Rajen: We've seen a variety of models; we've seen everything from people piloting within particular groups within a company to people doing other kinds of deployment models. The thing we saw is that it is very tough to run multiple messaging systems within an organization. What we've typically seen is people moving their entire corporation onto Google Apps for email or move a major portion of their corporation, or an entire division, like the case of Motorola, which moved their handset division onto Google Apps. So those are some of the paradigms that we've seen with Google Apps deployments.

With that said, we are also seeing deployments, with things such as Google Docs and Google Sites, where organizations adopt these in pockets. For example, it could be in a newspaper company with the editorial team using it to collaborate on articles. It might be a team within an organization that uses Google Spreadsheets as a dashboard or various things like that. We are starting to see people organically starting to pick that up and deploy and use it within the organization. Those are the two major models that we've been seeing so far.

Rajen: Thank you, Alaa.