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How Google Workspace unlocked the market for subscription business software

5 min read

The software stack of a startup in 2020 looks much different than a company starting in 2007. In 2007, a new company would require large capital expenditures to build a Windows infrastructure for email, file storage, accounting, and marketing tools. It would cost tens of thousands of dollars and require hiring IT experts to deploy and manage ongoing. 

Today, all of those solutions can be “purchased” using a credit card and paying a monthly fee. Very few companies are hosting email onsite, file storage can quickly be done in the ‘cloud,’ and there are countless solutions for a company to manage their accounting online. In just over a decade, all of the core solutions required for a company to operate have gone from extremely expensive to becoming ‘turn-key’ solutions that only need a credit card to set up. 

How did we get there, though? It certainly didn’t happen overnight, and in my mind, it’s Google that deserves a lot of the credit for driving acceptance of ‘software as a service’ in the enterprise. 

Google Workspace — formerly G Suite, formerly Google Apps for your Domain — is Google’s enterprise offering for email, calendar, file storage, and collaboration. Many of my customers are using Google Workspace alongside Spike’s products, so I think it’s important for founders in this space to realize the influence Google has had and what it means for your business today.

A key thing to keep in mind is that not only did Google Workspace help simplify the IT experience for companies, but it also boosted innovation. Before Google Workspace, Microsoft was the only game in town for the enterprise. Outlook was the only email available on desktop, and even mobile devices either used Outlook or required dedicated ‘connectors’ to an Exchange server. 

The only way to do ‘productivity’ was in Microsoft Office. If you wanted to build an application, the only way to deploy it to companies was by tying directly into Active Directory. In short, the enterprise technology stack was driven by Microsoft and its applications.

So instead of fearing Google’s popularity, I think it’s important to see how it opened up the market to new subscription business software solutions and use it to find a place for your own idea to thrive.

Google for your Domain

In 2006, Google set out on a course to change that, though. When they launched Google for your Domain, they began a path that would forever change the enterprise landscape. In 2009, they added an Outlook sync plugin that made Outlook work almost precisely as Exchange did. Many users were so tied to how Outlook worked that it was needed to bridge the gap. 

Employees who wanted to use Gmail on the web could easily do that. Employees who wanted to use Macs and Apple’s email program could easily do that. Employees who wanted to continue using Outlook could easily do that, too. 

Over the next few years, they would add the Google Apps Marketplace to make it easy to integrate into other solutions, add FISMA certification, and build an API for third-party email clients to work natively with Google email.

I remember, in the beginning, IT professionals were hesitant to ‘outsource’ their email to a third party, but over time, it became standard operating procedure. IT departments didn’t feel like they would lose their jobs by allowing Google to host their email. They began to see it was a way to free up resources to focus on leveraging technology as a business tool instead of just repairing broken servers.

Where enterprise IT is today

Today, as a result of Google driving the concept of ‘SaaS’ into standard operations, there are many innovations in the enterprise that would not have previously been able to exist. When someone has an idea for a new business, their path to reaching their customers has never been easier. 

Instead of focusing on selling IT departments on integrations into their systems, the focus is now on providing a great end-user experience. Because companies know that they can build a hosted solution that anyone can quickly sign up for, they now focus on selling directly to the people using the software instead of selling to IT professionals. 

By focusing on selling to the same people who will use the software, they can communicate the key benefits that their particular solution offers without worrying about how to deploy it on a company’s server infrastructure.

For businesses that are just starting up, it’s also been a critical part of controlling costs. Instead of spending $50,000 on a server infrastructure, organizations can subscribe to a hosted email solution, a web-based accounting system, and a hosted customer management tool for a recurring monthly expense. Instead of large capital expenditures, you end up with operating expenses that are much easier to budget for in the future.

This trend for software sales has been terrific for ambitious founders as it’s led to a wealth of innovation in almost every software category on the market. 

As Google began to replace Microsoft in many organization’s software stacks, they began to look elsewhere for more specialized solutions as well. As long-standing customers of Microsoft’s began to explore elsewhere, niche services developed audiences. Specialized problems began seeing specialized solutions.

No longer are companies tied to generic software solutions that only meet some of their needs. They can now find specialized solutions for specialized needs. 

If you are a project manager for a construction firm, you no longer are required to force your workflows into Microsoft Access. There are specific apps and services for the job of a construction project manager. If you write books, you don’t have to figure out how to make it work in Microsoft Word, there are now specific services that assist authors in that process. If you want to manage your email like a chat app, there are specific services for that. If you want a service to manage company credit card receipts, you don’t have to build complex macros in Excel and Access. All you need is a credit card and a web browser. 

In the last 15 years, we’ve gone from a world where everything a business did was tied to a Microsoft app or something that potentially required millions in custom software development. As companies became comfortable with Google for their corporate email, they suddenly became comfortable with a lot of other web-based companies helping manage their company operations.

Published November 23, 2020 — 07:00 UTC

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