So much fuss, but all part of the Google vs. Microsoft sales game

There’s been a fair amount of commentary over the past few days since the Wall Street Journal revealed that General Motors has signed a deal to adopt Google Apps for their 100,000-strong workforce. Some feel that this is be a great win for Google in their race to stay ahead of Microsoft for cloud-based application suites and certainly if a signature is ever obtained on a final contract, the deal would be sufficient to cause the sales team to order champagne all round.

But there’s a world of difference between obtaining a favorable nod from a customer and money changing hands. The WSJ report says "The contract, however, requires Google to meet certain requirements before GM makes a final decision to deploy the software.."  So before the deal is secure Google will have to provide tested and validated software that demonstrates it meets those requirements that GM has no doubt set out in a detailed specification document. And while all this is happening, the proposed deal with have to navigate a barrage of claim and counter-claims as there’s no way that any vendor who can propose an alternative (such as Microsoft's Office 365) will simply roll over and play dead to let their opponent walk off with the contract.

I’ve been involved in many such negotiations over the years. Normally it happens that a “bright spark” in the customer’s IT department convinces management that a change to a particular platform, application, or solution will deliver enormous savings and efficiencies over those that can be obtained by whatever software is in use today. Documents will be written to set out the goals of the procurement exercise and then sent to suitable vendors. The vendors will swing into action with dedicated sales team who specialize in FUD and the rounds of claims begin. Spreadsheets will be drawn up and circulated to show just how good solution A is in comparison to solution B. Reports will be strategically planted to undermine the opposition’s claims. World-class experts will be flown in to describe the engineering brilliance that one solution exhibits compared to the other and an attempt will be made to wow the customer with product road-maps that describe a veritable treasure trove of new functionality that will be rolled out over the next five years, engineering resources and bug counts permitting. And a visit will be arranged to corporate headquarters so that the very important people from the customer can meet the very important people from the vendor to work on their golf game and solve the mysteries of the universe.

I recall one such pursuit when Sun told a customer who was running Exchange 5.5 that they would support their 60,000 users on a couple of very large UNIX servers and so drive the cost per mailbox per month down to around $1. The plan sounded great when compared to the migration effort needed to deploy Exchange 2003 and the cost was certainly attractive when the customer looked at the capital expenditure required to fund the SAN that Exchange 2003 required to meet its I/O profile. But cost isn’t everything and that customer remained on Exchange. Service, confidence in the solution, the experience with the product to date, and the personal relationships that the sales team had with customer executives all contributed to cutting Sun down.

I don’t know if Microsoft is competing with Google at GM. If they are, I suspect that much the same playbook will unfold as Office 365 takes on Google Apps. Google will do their very best to emphasize their strengths while minimizing their weaknesses. Microsoft will do the same. I suspect that Google will beat Microsoft on sheer price but will then struggle in other areas. For example, Google’s client story is not as good as Microsoft’s is. Few corporate “knowledge workers” will enjoy moving from Outlook to Gmail or Word to Google Docs.On the other hand, GM has many factory workers and they probably will find a Google kiosk to be much the same as a Microsoft kiosk. Service and support will also play a part. Unlike Microsoft, Google does not have a strong track record when it comes to the delivery of service to large corporations, whether that service is delivered from Microsoft or through partners. And service does make a difference, especially when you have to deal with large multi-national organizations.

We can expect some excellent mud-throwing as this sale winds its way from the current hyped news releases to a point where pen meets paper. As evident in Paul Thurrott’s report, mud is already flying. More can be expected. I’m looking forward to the leaks and other reports that will emerge along the route.

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