Wired Columnist Says Google Has "Uphill Climb" For Cloud Dominance

John Stokes of Wired recently attended a Google event, and has some pretty interesting insights into the future of Google and cloud computing.  At times he praises, at times he criticizes, but his main point is that right now the ever-popular Gmail is Google's key to dominance.  And of course, he's absolutely right.  Right now, the vast majority of people who use a single Google service are on Gmail.  He even brings in Metcalfe's Law and shows where Google will struggle.  I see his point, but I don't think they will struggle as much as he thinks.

Rather than bombard users with a suite of productivity, Google makes sure they are visibly available while keeping their focus on the one service that every Internet user has: email.  By integrating email with chat and smart phones, they have taken that service and made it portable and universal.  They are just now working out any kinks in your email being a portal into the Google universe, and are in no hurry to launch.  The more people who sign up for Gmail give them power, geeks enjoy having an edge, and regular users are growing more frustrated with expensive and glitchy commercial products.  One targeted advertising campaign can start the landslide.  I imagine it would go something like this: Do you really type enough to warrant spending hundreds of dollars for the software? If not, come to Google!

Google was definitely aware of this Gmail-centric dynamic, as evidenced by the fact that Google VP of Product Management Dave Girouard kept insisting to attendees and the press that “email isn’t dead yet!” and stressing just how critical it still is to the enterprise. So there was some nervousness there around the fact that Gmail is to Google’s cloud offerings what AdWords is to Google’s bottom line—i.e., it’s the bread-and-butter, and everything else is sort of nascent and aspirational.

Now, to be clear, the assembled CIOs were asked in a panel if they were using the non-Gmail parts of Google Apps, and they answered in the affirmative to varying degrees. But it was obvious that none of them did a Google migration based on, say, the docs or the spreadsheet. Time and again their remarks came back to how many disparate email systems Gmail had replaced, and how much money that was saving. CIOs are converting their employees to Google Apps in order to get away from the headache of legacy email systems, and in the process they’re also trying to entice employees to switch from Microsoft Office to Google’s competing offerings.

It’s worth thinking about why Gmail is the main way that Google is getting into the enterprise. Email is a communication network, and as such it obeys Metcalfe’s Law, which says that the value of a communication network is proportional to the square of the number of users. So every person who signs up for an email account anywhere on the Internet adds in a nonlinear fashion to the aggregate value of “email” as a network.

In general, all businesses everywhere communicate internally and externally via a critical Microsoft Office “network” that runs on top of the email network in the form of document attachments. Any of those businesses can move to Gmail without losing access to that incredibly large and valuable Office network, but they cannot move to Google Apps’ other offerings without losing access it. So Metcalfe’s law actually works against Google’s efforts to migrate users from Office to Google Apps.

The only thing I think he overlooked here is new growth.  When the economy swings back and new businesses begin to boom, through consultants and cheaper IT labor (IT professionals have struggled with huge competition in the job market) businesses will start on the free and well advertised Google network.  You know, the one that works easily with different operating systems, Android phones, tablets and laptops?  Yeah, that one.  Virtually everyone will have a Gmail so you avoid the issue of having to have multiple accounts to collaborate.

Microsoft's outrageous licensing fees will be their downfall.  Those who have resented being stuck with the bill are actively seeking alternatives.  Google's other side services have time to develop and be competitive with Office.  If they can match or outperform Microsoft Office, we'll have a winner.