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Sneaking behind IT's back

February 07, 2008

There are two ways that big advances happen in business IT. One way is top down: the powers that be - IT departments and corporate executives - make a decision to bring a new system into a company, and employees are required, either happily or unhappily, to use the system. Think, for instance, of the installation of a big ERP system from SAP or Oracle. The other way is bottom up: individual employees or business units begin using a new technology, without any formal imprimatur from higher-ups, and it proves so valuable that IT departments and corporate execs have no choice but to embrace it. Think of instant messaging or, on a much larger scale, the PC revolution. Top-down technologies tend to be expensive (requiring their own line in a corporate budget), while the bottom-up ones tend to be fairly cheap (a person can put it on a credit card).

Web apps - the ones that run in the "cloud" rather than from your hard drive or from the server room down the hall - are mainly taking the bottom up route. The early adopters of Salesforce.com's CRM service tended to be the salespeople in smaller companies or in individual business units. Because adopting Salesforce didn't require a capital outlay - it was just a monthly expense - it didn't require a lot of formal approvals from higher-ups. IT departments weren't always happy, but they had little choice but to adapt as the service took hold. In most companies, after all, business units have more power than IT units.

Google's announcement yesterday of a new "team edition" of its Apps suite of personal productivity programs is an effort to spur the bottom-up adoption of the programs in companies and other organizations. Up to now, there have been two ways to use Google Apps. You could sign up for a Google account and use the separate programs - Docs, Spreadsheets, etc. - as an individual. That's free and easy, but it has some limitations when it comes to business use. For one thing, it lacks security controls - documents can be shared easily with anyone, whether inside or outside a company. More important, there's no easy way to see who else in your company or your unit is using the programs, so setting up collaborative efforts is a bit cumbersome.

The second, more formal way is to have your company set up a formal Google Apps account linked to its Internet domain. This method provides a lot more security and eases collaboration, but it requires the involvement of IT staff. Your company has to formally approve Apps before you can use it - and that approval can be hard to come by, particularly in a large company with all its bureaucratic rigamarole.

The team edition offers a third route. It's basically the Facebook model: your email address is your personal identifier and, because it's tied to your company's domain, provides an easy way to define the company you're associated with. So if you sign up for a team account, you can immediately see who else in your company has signed up and, for security purposes, you can easily restrict access to just your coworkers. You can, in other words, gain most of the advantages of the formal Google Apps system without having to get approval or assistance from your IT department. As Google's Rajen Seth told Dan Farber, “In previous versions of Google Apps ... the IT department had to get involved in verifying domains and centrally managing users. With the Team Edition a project group can use Google Docs on a project or the Calendar, and individuals on a team can sign up just using their email address." And the team edition is free, so you don't even need a credit card.

By easing the grassroots adoption of Apps, Google hopes to begin reshaping the way employees - and then employers - think about personal productivity apps. The idea isn't to displace, say, Microsoft Office, but to complement it, providing a simple way to collaborate on documents and other files. As the use of Apps becomes more established, it becomes natural for companies to formally adopt the programs to gain further capabilities and controls. In the process, they'll probably also sign up for the premium edition, which requires a $50 per user subscription. And then, in the long run, people start realizing that they're doing pretty much everything they need to do within the web apps, and they start asking themselves: why exactly are we still licensing the old-fashioned versions of these programs and suffering the expense and nuisance of installing and running them on all our PCs?

And then the bottom-up revolution is complete. Or so Google hopes - and Microsoft fears.

Comments

I already see this sort of behaviour becoming more common, as I wrote last night on the Accendor Research ITworth blog.

The IT organizations I visit remain in denial; meanwhile, they are almost at the tipping point of marginalization.

Posted by: Accendor's Bruce Stewart [TypeKey Profile Page] at February 7, 2008 01:01 PM

Nick:

>> That's free and easy, but it has some
>> limitations when it comes to business use.

The last time I played with the Google Apps Suite word processor, I found the auto-correct feature to be extremely slow, sluggish and frustrating compared and had to turn it off. Have they improved it? To me that would be irritating enough to keep people on local apps.

Posted by: Linuxguru1968 [TypeKey Profile Page] at February 7, 2008 02:28 PM

Well, um, meh.

This is a competitive response to Microsoft Sharepoint to ensure that they can't extend their control into shared applications, its just hosted remotely. In the past, people will not pay subscription fees for an asset and its not a given that they will in the future.

Google failed with their corporate search appliance on the same pricing model, why would this be successful ?

Posted by: Greg Ferro [TypeKey Profile Page] at February 7, 2008 03:47 PM

No comment. Just a small cartoon:
http://geekandpoke.typepad.com/geekandpoke/2008/02/one-year-in-a-i.html

Bye,
Oliver

Posted by: Oliver Widder [TypeKey Profile Page] at February 7, 2008 05:57 PM

The story is more complicated than this, really. When PCs were accepted by IT departments, it was on the IT departments' terms, which included tight control of access and functionality.

For all the rhetoric about IT departments being in decline, corporate managements are usually scared stiff of data leaks or widespread system outages, and accordingly give IT managers quite a lot of power.

Many corporations force particular desktops on their users, restrict the types of applications that can be run, restrict users' internet access and log users' activity to an extent much greater than in old mainframe days.

Google's post-IPO frat boys can play their cute tricks as long as they like. There's more to enterprise computing than Ajax.

Posted by: Tony Healy [TypeKey Profile Page] at February 7, 2008 06:23 PM

I was involved in a bottom up enterprise 2.0 implementation. It was an experience which was as rewarding as it was frustrating.

One thing I have come to realise is that the desktop is doomed. I can't wait til it's gone. It's such an inefficient way to work. My whole working life is about version control and email clutter.

I can't wait until I have my own company just so I can create a true Enterprise 2.0 environment. Mine will be first company to ban the hard disk!

Posted by: Charlie [TypeKey Profile Page] at February 8, 2008 06:55 AM

Has anyone read the Google Apps EULA? I assume they can do whatever they want with whatever data is uploaded.

I'd further assume that uploading a 'private' document to google that google then co-owns by their EULA would violate a variety of corporate policies.

This is the part of the discussion I keep seeing people miss.....

Posted by: newsmavens [TypeKey Profile Page] at February 16, 2008 10:43 AM

The business model challenges are far more complex and brutal than the technology or architectural challenges for SaaS and they get compounded when selling to an SMB. It has been argued that the success of complex to implement enterprise software in marketplace is attributed to the channels, ISVs and VARs, to a certain extent since they step in and do the dirty job and it is a very lucrative business for them. If the VARs are not selling it, customers won't probably buy as much. This has serious implications on the SaaS as a delivery model. The fundamental benefits of SaaS such as pay-as-you-go type subscription models, try before buy, personalize against customize, and no physical box are some of the factors that work against the SaaS vendor since there aren't enough incentives for the indirect channels with the current business model.

This is an interesting trend that SaaS vendors should be watching for since it simply changes the definition of an SMB. More and more knowledge workers are inclined to bypass IT if they have an access to better and easy-to-use solution. One of the new features of Google Apps is targeted towards this behavior. If you are a Google Apps consumer in one department, you can see who else has signed up for Google Apps (based on the domain name) and can collaborate with those people. This is what I would call it loose integration.

I have a detailed post at:

http://cloudcomputing.blogspot.com/2008/02/business-model-innovation-opportunities.html

Posted by: Chirag Mehta [TypeKey Profile Page] at February 29, 2008 01:07 AM

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