Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Seven Questions for Shan Sinha, DocVerse Founder Turned Google Apps Exec

The last time I talked with Shan Sinha was the day that Google announced Google Cloud Connect, its add-on for Microsoft Office that gives users the ability to sync documents with Google Docs, the search giant’s Web-based alternative to Office.

At the time, I asked out loud, “Where’s Office 365?” The answer I got back from Redmond: “Later this year.”

Well, “later this year” equals today. In a few hours I’ll be headed to a Microsoft event in lower Manhattan, where the software behemoth will formally launch Office 365, its own Web-based office suite, essentially a cloud-based competitive response to Google Docs. In advance of that, I thought it worthwhile to check in once again with Sinha. You’ll remember he’s the former CEO and founder of DocVerse, a company that Google acquired, and whose product got turned into Google Cloud Connect. He’s now Group Product Manager at Google’s Enterprise Group. I caught up with him last week to talk about the soon to be more competitive market for cloud-based office services and about what’s going on at Google Apps.

As a counterpoint, tomorrow I’ll have seven questions for Kirk Koenigsbauer, Corporate VP of Microsoft’s Office Division, and we’ll be talking all about Office 365.

AllThingsD: Shan, this week things kind of come to a head, with Microsoft launching Office 365. Clearly there’s a lot going on in the cloud-based office suite business. How does Google see the state of play right now?

Sinha: The enterprise business at Google is actually really great. We’re seeing a lot of growth. It’s accelerating, which is more important. We’re going from zero to 60 faster than we ever have before. We’re talking about larger revenue bases. We’re obviously not breaking out our revenue yet, but it’s just been a really phenomenal year for us. We’ve got 30 million users of Google Apps; three million businesses have signed up. We’ve seen a tripling of signups this year alone. All the growth we’re seeing across the board. We’re seeing large enterprises, midmarket companies and small businesses.

I get the point with small business and education institutions, and even everyday people like myself. I’m a Google Apps user myself, but I also still have a Microsoft Office seat. But the part I find myself being a little more skeptical about is the large enterprises going to Google Apps. Who’s doing it, and how is it working out?

That’s a common thing that people worry about. It’s not unreasonable to ask if a cloud solution is suitable for something as critical as messaging. The answer we’re hearing a lot is “yes.” What’s even more interesting about it is that it feels like we’re breaking out of the early adopter segment of the market. If you look at some of the biggest customers we’re working with, there’s McClatchy, which rolled it out to 8,500 users, and there’s IHG, the International Hotel Group — that’s a 25,000-seat deployment. You might go so far as to say they’re on the early edge of the adoption cycle, but then we’ve also started working with the state of Wyoming, and I don’t know the last time that anyone considered a state government as part of the early adoption cycle of anything. Wyoming just deployed 10,000 seats for everyone in state government. A lot of people like to talk about the reticence of companies to adopt cloud-based applications, but I think that’s an artifact of two or three years ago, when the question was “why?” Now they get the benefits — there’s cost and ease of deployment. For something that’s as commoditized as email, which everyone has, it’s something that just makes sense.

What changed? You’re offering something that every office has.

Three things. First, email has changed. Every single company has email, so it’s not a strategic tool or technology. You just have to have it. Companies want simple, hassle-free ways to bring email into their organizations. Second, the world has changed. The world is no longer moving off typewriters and printouts. You’re talking about groups of connected people who work in teams, and Google Apps is built for that world. You get collaboration across the whole suite. You get integration between email and docs. Third, in an organization, you’re looking for the way to get the best leverage out of the IT organization. One of our biggest customers is Genentech. They told us that in the past, when they had Exchange deployed, they had a team of 12 managing hard disks and quota and backups and disaster recovery. Now that they’re on Google Apps, they have one person. Those 11 other people are working on more important things to help the company be more competitive.

So when you get into these companies and governments, are you displacing Office and Exchange? Or are you enhancing them or coexisting with them?

When we talk about mail, typically we’re displacing something. We’re either displacing Exchange or Lotus Notes, or some of the smaller products. Now, we do enable companies to incrementally roll out so that it’s not a night-and-day kind of switch. When it comes to Google Docs and collaboration, what we’re seeing is a need for two things: working in teams and working mobile. You’re seeing a need to support lots of different types of devices — iPhones, Android, BlackBerry, tablets, as well as traditional PC desktops. The second piece is centering around teams. If you look at Microsoft Office, it’s a product that was built for individuals, and it was built at a time when the goal was to get people off of typewriters. I think the last typewriter company in the world just shut down. And so what we’re really seeing is Google Docs enabling team collaboration to help people get the most out of teams and groups. Microsoft Office certainly isn’t going away. What we’re seeing is a shift in how people use it. In the past, companies would buy a sitewide license for Office and give it to everyone. Now, companies are considering buying it on a case by case basis. If the finance department is building complex financial models, sure, get them Office. But for everyone else, Google Docs has become a great set of tools for creating and editing documents.

Last time we talked, you told me about Google Cloud Connect for Microsoft Office. You were the founder of DocVerse, which basically became Google Cloud Connect after Google acquired it. How has that been working out so far?

It’s rare that you see an acquisition stick so closely to its original intent. Our goal was to help create that bridge into the cloud. We’ve been seeing really great uptake of Google Cloud Connect, both at large companies and midsized companies. It’s only been three to four months, so we’re not going to break out any numbers, but so far we’re really pleased with the adoption we’re seeing.

So what are your priorities? What’s on your to-do list for the next six to 12 months? One thing I keep reading about is “offline availability” for both email and Docs. What can we expect?

When we think about our offering, it’s not just products and features, but it’s about a completely new way of doing business. At a product and feature level, yes, offline is important, and it’s coming later this summer across all the Google Apps products. We’re going to be making a lot of user interface improvements. And then there’s going to be a lot of rapid iteration. We have a release that comes out every two weeks. Last year we did more than 200 feature releases. This year we’ve done about 100 so far. We push them out to users so that they don’t have to wait three years for the next version. But it’s also important to think about all the ways we do business. We’re going to be making significant improvements to our support infrastructure so our customers can go and get support more easily and in a broader way. We’re also going to make improvements to the collaboration and communications aspects across the suite. We also just changed the billing arrangement. We used to have a $50 per user, per year flat model. And we actually just introduced a $5 per user, per month no-commit model. We’ve seen a tripling in signups because of changes like that.

Let’s get a little catty here. Microsoft is out with its big Office 365 release today. How do you see the competition coming from them? Google Apps is fair competition for Microsoft. But is Microsoft’s online offering going to provide fair competition for Google Apps now?

I think at a very high level, it’s exciting to see a real emphasis on the cloud. This is great for the market. This is where customers are headed, and where they want to be headed. To see Microsoft going in that direction is a great thing for the industry and it’s a great thing for customers. Stepping down a bit, what I would say, it’s reassuring for us that Microsoft is competing on our turf. This is a business we’ve been doing for a few years, and it’s something we know how to do. We’ve built systems processes and products all geared around the cloud, because we don’t have a business model to compete with. Microsoft has to compete with a business model from the past in order to make its way into the cloud-based way of doing things. Microsoft is taking its existing product and kind of putting a cloud sticker on some pieces of it, but it’s still vested in desktop software. You’re still running Outlook, you’re still running Office. And there are still management headaches that come with it. I think we compare favorably on licensing terms. We have one pricing and licensing model. Microsoft has 1,000 people working on Enterprise licenses and schemes, and has 11 different editions and versions. Its a more complicated picture, when we think the world is looking for some simple solutions to problems that frankly aren’t strategic anymore.

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