Capgemini and Google hook up, bring apps to the enterprise

The Google partnership with Capgemini puts flesh on the bones of its designs on the enterprise app market. The other 800-pound gorilla, as well as the SaaS stars, will surely take notice.

Google Inc.'s designs on corporate desktops got a little more real with the announcement today from consulting firm Capgemini that it's partnering with the search giant to bring Google Apps to the enterprise market.

Paris-based Capgemini, which has $10 billion in revenue and supports about 1 million desktop users worldwide, said the partnership with Google bolsters its portfolio of desktop solutions, bringing "next generation" communication and collaboration services to corporate employees, from deskless seasonal workers who need email, for example, to employees in need of efficient ways to collaborate on documents.

Google Apps Premier Edition, which includes Docs & Spreadsheets, Gmail, Google Calendar and Google Talk products, will be delivered as  Software as a Service (SaaS) over the Internet through an employee's Web browser. Over the next five years, this delivery model of software is expected to have an annual compound growth rate of 25%, according to Gartner Inc. And the price for Capgemini clients is cheap -- $40 per user per year.

I look at it as a pretty good win/win.

Ray Wang,
analyst,
Forrester
Research Inc.

Ben Pring, an analyst at Stamford, Conn.-based Gartner who is following the partnership closely, said he sees the news as a "relatively big deal," providing a road map for Google's foray into the enterprise territory, a nice bit of publicity for Capgemini and legitimacy to the SaaS model. One could potentially raise an eyebrow that the partnership is not with one of the leading firms in the U.S. market, but he said it is an "important first step."

"From Google's perspective this is the beginning of developing relationships with the large outsourcing vendors, the integrators, the consultants, the professionals services firms, who are a very important channel for software companies traditionally,"Pring said. "These people have good relationships with CIOs and with other C-level executives at big corporations and are often are very influential in the software decisions and the downstream implementation and management of technology."

As Mountain View, Calif.-based Google pushes into selling enterprise-class applications to large companies it will need to work through this channel, Pring said.

Capgemini, which is better known in Europe where it's based, shares in the Google "halo" effect and gains some short-term competitive advantage among peers by being first to market, Pring said. More significant for the software market at large, the venture indicates there is interest in Google and this kind of service among the firm's large corporate clients.

"Most people have thought that the SaaS story is just for small companies, and Google is just for consumers. And we have long felt this is not an accurate picture of what is going on," Pring said. "There is a desire [for Saas] amongst big companies, and particularly among big companies that operate in a federated or independent way, with divisions that more or less do their own thing."

Ray Wang, an analyst at Forrester Research Inc., said, "This is one of those interesting deals where you have a preeminent Web 2.0 company and what they're offering on the app side, partnering with Capgemini, one of the big systems integrators. Google gets to make a play into the enterprise market with a trusted partner, and Capgemini gets the credibility of putting a Web.2.0 app like Google Apps before its customers as an alternative. I look at it as a pretty good win/win."

Wang said the Forrester data on SaaS shows two important points. "The interest in SaaS is actually on the enterprise side. The No. 2 thing people are looking for in SaaS is not CRM [customer resource management], but email/collaboration software." Capgemini already provides email services to lots of companies around the world, so this is a "natural extension" for clients who want an email alternative to Microsoft or different deployment options, he said.

In its announcement materials, Capgemini took pains to address the impact of this partnership on its relationship with Microsoft, an important client. The firm said it will continue to promote and support Microsoft Office, but by offering support for both solutions it gives clients a choice.

The partnership is not likely to surprise or give much pause (publicly anyway) to Microsoft, Pring and Wang agreed. Pring said Microsoft is very "clued up" to "in the cloud" computing, as indicated by its massive public relations campaign to get out its "Software-Plus-Services" version of SaaS. And, Google's application offerings are still "a fly on an elephant's backside."

"Microsoft will shrug their shoulders and say, 'Well it's not a big deal.' But it is a big deal in the context we talked about before -- that it begins to show that corporations are looking for alternatives to Microsoft's way of doing this. Someone who can come in with a cheaper price point will always be attractive," Pring said.

SaaS providers, from Salesforce.com on down, will also take notice. While they have been friendly to and encouraging to Google so far, Pring said, "they are very conscious now that Google could quickly swallow up, or even develop organically, competing capabilities.

"I think they are seeing that Google could quickly layer on top of Google Apps lots of other functionality and very quickly become the 800-pouind gorilla in this."

Let us know what you think about the story; email Linda Tucci, Senior News Writer.

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