Google Set To Challenge Microsoft In The Channel

Google and Microsoft compete vigorously in areas like search, mobile devices, and SaaS applications, but when it comes to the channel, there's no comparing the two companies. This week, as Google celebrates the one-year anniversary of its Google Apps Authorized Reseller Program, the notion of Google becoming as synonymous with the channel as Microsoft is doesn't seem as far-fetched as it used to.

That's not to suggest that Google hasn't encountered difficulties along the way. Solution providers tend to regard vendor newcomers to the channel with the cold, appraising eye of a father sizing up his teenage daughter's first boyfriend. So when Google launched its program last February, many VARs that have built businesses around face-to-face interactions were skeptical. And in some early cases, their suspicions were confirmed.

Some VARs that tried to engage with Google were irked by being unable to reach a human company representative, and didn't appreciate being steered instead to Google's Web-based support. Daniel Duffy, CEO of Valley Network Solutions, a solution provider in Fresno, Calif., says that based on what he's seen from Google thus far, the company isn't quite ready to build meaningful channel relationships.

"Their application process and auto-e-mails don't even provide a phone number. By automating everything and eliminating humans wherever possible, Google doesn't make it easy to engage them at a human level," Duffy said. "You'd think that if they wanted to work with resellers, they'd make themselves a little more accessible."

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Nonetheless, there are signs that Google sees building a channel as a learning process to which it's fully committed. Google says it's happy with the momentum of the Google Apps Authorized Reseller Program, but it's also acknowledging areas that need improvement and vowing to keep the lines of communication open with channel partners.

"We know we're not doing all things as well as we could, but we're trying to improve. This means listening and making an effort to support and communicate with partners," Stephen Cho, director of Google Apps channels, told earlier this week.

Google's use of Web-based support reflects the larger industry trend toward more online tools serving the channel community, but that's not the only way the company interacts with partners, Cho said. "In cases when it's possible for partners to be well served through a set of online tools to get problems solved, we're trying to take maximum advantage of that."

Shawn Wilkie, founder of Sheepdog, a Google Apps reseller in Nova Scotia, Canada, and a member of Google's initial group of 30 resellers, says the partnership "hasn't been perfect" but is definitely headed in a channel-friendly direction.

"We've had a lot of care and handling from Google, and they've escalated issues to senior management," said Wilkie. "We're working with Fortune 500 and Fortune 100 companies on opportunities we wouldn't have seen if we hadn't gone down the SaaS path with Google. Their openness and willingness to attack problems head-on to build a relationship with my company has been incredible."

While many SaaS vendors have built channel programs that bear little similarity to those with which legacy VARs are familiar, the Google Apps Authorized Reseller Program is designed with both traditional and cloud-relevant elements, according to Cho. For example, Google is providing partners access to training, online materials, product functions, and best practices. In the future, Google plans to add general certifications to the program to ensure that partners have the appropriate skills, Cho said.

This year, Google plans to boost its channel resources for partner enablement and profitability, giving VARs the tools they need to get up to speed and deliver basic value added services such as implementation, integration, custom application development, and ongoing management, Cho said.

Does Google think it can attain the kind of channel cachet that Microsoft, arguably the IT industry's best large-scale channel program, has built up over the years? For now, Google is sticking to the humble approach and saying that it has much to learn before it can be considered a true channel master.

However, Google appears to have zeroed in on at least one area of Microsoft's channel program that has been a source of irritation for VARs.

Next: The Microsoft BPOS Effect

Although Microsoft VARs sell the software giant's suite of hosted Web applications, which carries the headache-inducing moniker of Business Productivity Online Services (BPOS), they must relinquish control over the billing relationship to Microsoft. But Google gives Google Apps resellers full control over billing, charging them $40 per seat for an offering they can sell for $50 per seat, and alerting VARs when it's time to renew through an automated management console.

"This was one of the things that partners wanted most during the Google Apps pilot program," Cho said. Building a channel is a new challenge for Google and one that may seem wholly unrelated to the company's consumer-facing businesses. But according to Cho, the customer service lessons Google faces every day in serving consumers translate well to the channel environment.

"We believe that if the users in business aren't satisfied with the value of the applications and services we're delivering, they have the right to [take their business] elsewhere," Cho said. "We as a firm don't believe that, in some sense, we can maintain or force those relationships based on contractual business conditions."

One lesson Microsoft learned a long time ago is that it's virtually impossible to reach SMB customers without involving channel partners because of the high touch that's needed in this segment. With nearly 1,000 resellers in some 50 countries having joined the Google Apps Authorized Reseller Program to date, Google appears to have assembled a channel that's capable of giving Microsoft a run for its money in this space.

"One thing is clear: Google is a product innovation company and we absolutely will only be able to reach and serve all of the small and medium and large businesses if we work with partners. We simply will not be developing a degree of reach in a direct selling force that would meet these needs," added Cho.