Google: We Have Stronger Products Than Microsoft

Specifically, there are several things we ask the resellers to do. No. 1 is to market and promote the product and do the selling. They are then able to resell the product itself, bundle it with any additional product or service offerings from their portfolio, and then they do all of the billing, relationship [management] with the customer and collection. So they have full control over the customer billing relationship. They can cross-sell, up-sell, and bundle in additional offerings. We believe that is critical to them so they can continue to be the trusted advisor to their clients and deepen and extend their customer relationships.

So partners get all the money, and then they cut you a check for your 80 percent?

That is correct. They carry the paper absolutely.

Do they pay you annually at the beginning of the year or monthly?

They pay on an annual pre-paid basis. [At $50 per user, per year subscription with a 20 percent reseller discount], they would pay $40 when the seat is ordered for the customer.

Do you expect that the reseller will charge an annual fee or work it into a monthly fee, especially if they are adding other services?

The resellers are able to do any kind of pricing and any kind of terms they see fit that works in with their business, whether it be monthly, quarterly, annually, multi-annually, whether it be standalone or bundled with any other offerings. That is completely up to the reseller.

Can resellers private-label Google Apps?

Effectively private labeling is [not an option]. The branding on it is ACME.com and it looks like ACME.com e-mail, ACME.com all of the other apps on the domain of the business. There is a "Powered By Google" down in the corner on some of the pieces. But the branding is actually the customers' own branding.

Is there any protection if another reseller comes to a client and offers to take away two points off the terms of a deal that is already in place?

As is generally the case, our philosophy is to serve the customer and the user. And so customers always have the freedom to move to a different reseller if they wish, to a direct relationship with Google if they wish. Clearly if, for example, they are paying on an annual basis if they do move, they would forfeit the remainder of what they paid for in their term with a previous provider. But the customer will obviously have the opportunity to move if they believe they are not getting the service they need from the partners they are working with.

Is there any deal registration for accounts?

There is not a full opportunity registration system currently in place. But we expect many of these customers effectively are customers that would not be able to find and have access to the Google services on their own. The Google services are easy to use, and plenty of companies come to us directly. But many companies really are only going to be served by some of these partners or an ISP giving them broadband access providing this capability to them that they otherwise not would have knowledge of.

Will you have a reseller locator on your Web site?

If you look on the Web site now, there is a solutions marketplace around the Apps area for people that provide value-added services today already around Google Apps, and there will also then be effectively a reseller directory as well.

Right now you have 10 million active users that are handled by Google directly. Will Google continue to have a direct presence here?

In those 10 million users, some of those come through partners already, some of them come from ISPs and their consumer Internet businesses.

How many of those 10 million are direct?

We are not sharing directly exactly what that split is. It is safe to say that the current state is not what we expect to continue to see. We expect to continue to see an acceleration of the customers that are served by resellers and channel partners as we go forward here. We will continue to provide direct access online and direct access through our enterprise team here for those customers looking to come to us directly. But it is simply not possible for us to serve all the customer demand that we expect in all the countries and in all the markets. We look at Google really as a product and technology company. We are looking to our channel partners to be able to serve and meet the needs of customers locally around the world.

Next: Dealing with channel conflict