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The Google Apps Marketplace: Chances of Survival

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Over on his blog, VC Brad Feld posted about the experience of three of his portfolio companies being part of the Google Apps Marketplace – Spanning, Yesware and Attachments are all built on top of Google Apps and Feld is particularly positive about their experience;

While Google has been building this all very quietly, I’m extremely impressed with what they’ve done. Companies like Yesware are able to release a new version of their app to all users on a weekly basis. For an early stage company that is deep in iterating on product features with its customers, this is a huge advantage. And it massively simplifies the technology complexity to chose one platform, focus all your energy on it, and then roll out other platforms after you’ve figured out the core of your product.

I expect to see versions of each of these products expand to work with Microsoft – and other – ecosystems. But for now, the companies are all doubled-down on Google Apps. And I find that very interesting.

So far that all sounds fine but the plot thickens somewhat. Feld is comparing building on Microsoft Office as a platform versus Google Apps as a platform. But that, in my humble opinion, is a risky and flawed comparison. Microsoft is fundamentally an application platform company – they’ve made their money selling operating systems and software – so while, as Feld points out, it might be incredibly painful to deploy an enterprise-wide Outlook plugin – at least when you do so you have the knowledge that Microsoft is unlikely to change strategy in terms of its core proposition anytime soon.

Looking now at Google Apps, and particularly the Google Apps Marketplace, I’m not sure we can say the same about Google. Google is all about (as everyone knows) driving search, all the products it has built that are seemingly unrelated to search in some way increase its core revenues. And we’ve also seen, especially since Larry Page took over the Google CEO role from Eric Schmidt, that any products that don’t directly add to the bottom line get quickly culled – Aardvark, Google Desktop,. Notebook etc etc – all experiments which have been discontinued.

So how does this relate to the Google Apps Marketplace? Well, quite simply, if having the marketplace doesn’t strongly and directly result in increased signups to Google Apps, there is little reason for Google to continue throwing engineering time at it. While there are a million and one startups jumping over themselves to get on the marketplace and see it almost entirely as their go to market play, that’s potentially a risky strategy should Larry decide to pull the pin. It’s interesting to read some of the comments on Feld’s post about the flexibility and ease of use of the platform (or lack thereof) which, while focused on Google Apps, by extension relate to the marketplace integrations as well;

The “democracy” of Google Apps is freedom and choice at the expense, to varying degrees, of efficiency, reliability, and polish. I use Google Apps for Business + one of the top-rated CRM products + one of the top-rated mailing apps every day, and the experience is rarely satisfying. Google’s office suite is still terrible and not-very-compatible (my company found it unusable and has switched to Dropbox + traditional Office). The apps we use are good in theory, but the integration really turns Google Apps into this kind of Frankenstein where nothing is as seamless as it should be and you’ll often run into these AJAX bugs that bring everything to a grinding halt.

While the Marketplace is a great tool for startups to list on as a way of gaining attention with a view to acquisition (Manymoon was acquired by salesforce and renamed do.com, Assistly was acquired by salesforce, SlideRocket was acquired by VMware etc etc), that doesn’t add much to the internal justification for Google to build the Marketplace, unless they themselves use it as a proving ground for companies they’ll eventually acquire – so far this has not been the case.

The bottom line is that for a startup, the Google Apps Marketplace is a great place to build recognition, but shouldn’t be thought of as the sole go to market location – rather your best bet is to diversify where your attention is given – for a company building business applications there are other options alongside Google’s marketplace – the Intuit Partner Platform, salesforce’s AppExchange and leveraging the platforms of vendors like NetSuite are a good option. And arguably, all of those vendors have more at stake with their application platforms than does Google…

It’s interesting that when SAP and Google announced their partnership to deliver Google Apps functionality to SAP customers, it was parsed in terms of deep integrations. While I’ll accept that the Google Apps Marketplace isn’t exactly a good fit for SAP’s traditional customer base, I’m wondering if we’ll see more of a focus on partnerships and channel arrangements from Google going forwards, and less on its own marketplace…

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