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Summary:

The enterprise business isn’t expected to impact Google’s bottom line for at least the next two years, but Google (NSDQ: GOOG) enterprise pr…

The enterprise business isn’t expected to impact Google’s bottom line for at least the next two years, but Google (NSDQ: GOOG) enterprise president Dave Girouard told a Bank of America Technology Conference audience Thursday that the company’s enterprise offerings — which include Google Apps — were already bringing a “few hundred million” a year in revenue. “It’s profitable and it’s growing,” Girouard said. “It’s only in the context of Google’s … search advertising business that it look small.”

Other highlights from his remarks, after the jump

Profit: Google charges companies $50 per user for the Google Apps suite, which includes Gmail, Calendar, Talk, Docs and Spreadsheets. Girouard said that at that price-point, Apps “is very profitable” because Google uses the company’s existing infrastructure to run it; adding users “costs us very little money.”

Products: Girouard acknowledged that most businesses are signing on for Apps to use Gmail or Calendar. “Other products have a ways to go,” he said.

Cost cuts: He said Google’s enterprise division had not been hard hit by the company’s recent cost cuts. “We are getting the investment we always were.”

Adoption: Girouard said the company was focused on trying to eliminate obstacles that might make business customers hesitant to adopt Google Apps. So, for instance, Google recently introduced offline Gmail and also made it easier for users to access Apps via BlackBerry.

Girouard did not address new competition, particularly from Microsoft (NSDQ: MSFT), which has already introduced hosted versions of its e-mail offering and is also expected to soon introduce a web-based version of Office. But he was asked why some large companies that had launched pilots of Apps had not gone ahead with their deployments. (Microsoft Chief Operating Officer Kevin Turner had to personally lobby P&G to keep the company from adopting Google Apps). “We’re not going to win every battle,” Girouard said. “We are very early in this thing.”

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  1. I am a user of Google Apps and it is very useful in my business. I can easily monitor my team and it is nice to know that a lot of people are using this product too.

  2. I'm not surprised at its growth. If you look at the cost savings in licensing, support, PC software installation and maintenance, server costs, IT costs, etc. Google Apps is much better than existing ways of solving the same problems (e.g. Exchange, Outlook, MS-Office).

    Wait until Google Wave takes off…

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