Google Goes Its Own Way on SMB Services

Ann All

Technology vendors have long viewed VARs (value-added resellers) as an important bridge into the SMB market. Rather than using their direct sales teams to woo SMBs, vendors recruit partners to do it for them.


But Google's isn't just any technology vendor. And it apparently wants its partner channel to be as minimalistic as its famous search interface. After purchasing e-mail security company Postini, Google promptly cut the prices charged for its services by up to 75 percent.


This has left Postini's resellers understandably miffed, notes New York Times blogger Saul Hansell. Google also apparently plans to handle service for all but the smallest of its customers, cutting off another revenue opportunity for its partners.


Hansell questions the move:

... enterprise customers want their hands held. And if you cut prices too low, there simply isn't enough money for Google or a reseller to provide much service. It will be very interesting to see if the market demands that Google actually raise its prices in order to compete.

Do most companies really want their hands held? Or is it necessary simply because most software is unnecessarily complicated?


Google is banking on the idea that it can put together a package of apps so easy to use that it won't require much in the way of service and support. Rather than using service revenues as a partner perk, Google seemingly wants to streamline service to cut its costs -- savings which, to its credit, it seems to be passing along to customers.


Interestingly, in my July interview with Illuminata analyst Wayne Kernochan, he suggested that small ISVs offered a better access point to the SMB market than VARs. He said:

... you don't have this kind of middle person between you and the ultimate buyer who can screw up your understanding of how the market is doing right now. If the SMB ISV likes your product, particularly the SMB application service provider, you're going to see the revenue immediately. Whereas if you are dealing with a regional VAR, that VAR, in order to preserve its relationship with you, would buy your product ahead of time and then turn around and try to sell it to the customer. Sometimes they didn't succeed, so you didn't know for six months or so that all that revenue you booked wasn't real.

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Feb 24, 2008 5:17 PM Allen Falcon Allen Falcon  says:
I could not disagree more with your view that Google is wants a minimalistic partner channel. As a Gold Partner, Google is asking me to focus myattention on the "value add" component of my value added reseller (VAR) business.At $12 per year per user, Message Security direct from Google is inexpensive, even when you consider the purchase minimums and large setup fee. As a self service offering, though, you will not get the following types of service we provide our customer every day:* A person on the other end of the phone to answer questions and provide help* Guaranteed response on email and web support requests* Hand-holding through the setup process, ensuring that DNS changes, router configurations, and the Postini configuration all work together for the best possible result* Periodic email traffic reports and analysis, followed by tuning service parameters* On-site and web based training to help users how to best use Postini's capabilities* Customer branding and customization of user guides, reference cards, and training materialsThese services, and others, provided the added value -- a value that our customers tell us remains a great bargain at our current pricing.Regards,Allen FalconCEO, Horizon Info Serviceshttp://www.horizoninfoservices.com Reply
Feb 25, 2008 12:18 PM Computer Consulting Kit Home Study Course Computer Consulting Kit Home Study Course  says:
A lot of what I have read recently about Googles services has been about actually it being unfriendly because it has been TOO complicated. The same has been said about its programs for solution providers, etc. I think a lot of partner programs and other services provided by major companies have started to try to open themselves up to be more accessible to the small business market (that has been notoriously underserved in the past). However, I think in many cases that has meant the structure of many of the programs and services has become more complex, with more attention paid to detail to make sure everyone is getting the appropriate level and type of service. I think a lot of companies will change significantly in the future (and even the near future) to accommodate a changing market. Reply

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