Google Preps Postini For Business World
As enamored as the tech world can be with the business to consumer relationships of Web 2.0 applications, Google understands what companies like Microsoft and IBM do - the real money is in business to business relationships.
Context & Ripple Effects
Google's July 2007 move to acquire Postini — framed at the time as buying a manager of corporate e-mail rather than a consumer property — is now being converted into product: the company has more than doubled the mailbox storage on its corporate e-mail service and is positioning Postini explicitly for business-to-business selling. The framing in the coverage is pointed: as one analysis put it, the real money is in B2B relationships, the territory Microsoft and IBM have long owned.
The timing matters because the B2B ambition was already live in commentary — Nicholas Carr's March 2007 argument that Google should buy Intuit treated enterprise software as Google's logical next market. The Associated Press picked up today's story nationwide, signaling that Google's enterprise push is being read as a mainstream competitive event, not a niche product update.
First-order effects
- Google's existing corporate e-mail customers get more than double the storage capacity immediately, making the hosted offering materially more competitive against on-premise Exchange and Lotus deployments.
- Postini shifts from a standalone security-and-compliance acquisition to the front end of Google's direct sales motion against Microsoft and IBM in business software.
Second-order effects
- Incumbent enterprise-messaging vendors face price and capacity pressure on their own hosted e-mail plans, since Google can subsidize storage from an ad-funded core business that Microsoft's server-license economics cannot easily match.
- Resellers and IT departments gain a credible non-Microsoft option for e-mail infrastructure, forcing channel partners who built businesses around Exchange administration to reposition.
Third-order effects
- If the pattern holds, consumer-web companies enter enterprise software through acquisitions of compliance and security layers rather than building suites from scratch — a route that lets them sell reliability first and applications later.
- Enterprise e-mail becomes the wedge product for broader hosted office suites, shifting the battleground from per-seat licenses to subscription services where Google's distribution and data-center scale are structural advantages.
The trend: Consumer-internet giants are buying their way into enterprise software through messaging and compliance infrastructure, turning ad-subsidized scale into a weapon against license-based incumbents like Microsoft and IBM.