Can Google Challenge Microsoft In The Channel?

the new reseller program

Google's channel consists of partners that came over in its July 2007 acquisition of security services provider Postini, and VARs in the Enterprise Partner Program, which launched in September 2005 with a goal of recruiting solution providers to help expand the search capabilities of the Google Search Appliance to corporate data behind the firewall.

Postini developed a name as a skilled SMB channel player, but that reputation has been tarnished somewhat since the acquisition, and some VARs aren't sure if Google has its best interests at heart.

In February 2008, Google angered VARs by dramatically cutting the prices of Postini security services from a range of between $30 and $100 per seat/per year to just $3 to $25 per seat/per year. Google also named two authorized distributors for Postini security services -- TestudoData and Excel Micro -- that act as liaisons between Google and channel partners.

Michael Cocanower, president of solution provider ITSynergy, said this arrangement makes it difficult and time consuming to resolve issues with Postini services when they arise. "Google won't engage with us directly, and that makes it tough to handle things like incidents and troubleshooting," he said.

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The fact that one of Google's first steps after buying Postini was to distance itself from channel partners shows how hard it is for VARs to make money from the partnership, said Les Kent, principal at solution provider Progent. The Google Apps program's lack of deal registration adds to this difficulty, he added.

"I don't think Google really understands that in order to have successful channel partnerships, their partners need to be able to make money," Kent said. "Between the lower prices, modest margins and lack of channel protection, it's very difficult for partners to justify the transaction costs of servicing small numbers of clients."

Although Google isn't starting its channel from scratch, it still has a long way to go to catch up with Microsoft in terms of building a partner program that drives sales and builds loyalty among partners, said Mark Crall, president of Charlotte Tech Care Team, a Microsoft partner.

Microsoft's strategic advantage in the battle to establish services 'sockets' has been its partners, and in the past year, Microsoft has re-invested heavily in its SBSC Partner program and Local Engagement Team, both of which leverage partners as strategic advisers to SMB clients, according to Crall, who cites these as leads Google would be wise to emulate.

Despite the Postini-related difficulties, some partners believe that Google will eventually work out the kinks in its channel program. Bill O'Brien, president of Commercium Technology, expects the Google Apps reseller program to succeed once it learns to effectively articulate the economic advantages to customers.

"It's a compelling financial proposition for Google to deliver all these applications in the cloud and be responsible for things like scalability, maintenance and bug fixes," O'Brien said. "Everything is soup to nuts, whereas Microsoft applications are complex, difficult to maintain and costly."

Google's willingness to incorporate partner feedback into its channel strategy will go a long way toward determining the success of the program, according to Michael Cizmar, president of MC+A, a portal expert that was one of the first companies to sign up for Google's Enterprise Professional Program.

"Google has been very helpful in educating the partner community and providing training, marketing and lead referrals," Cizmar said. "We've encountered no channel conflict."