Tedschadler by Ted Schadler

I spoke recently with Stephen Cho, the product manager for the new Google Apps Reseller Program. It's quite clear that Google has learned from its Postini reseller program, from partners like Appirio and Cap Gemini, and from Microsoft's Exchange Online reseller program.

First, the details:

  • Resellers own the customer. That means billing, first line support, the works.This is in distinct contrast to Microsoft's program for Exchange Online, where partners can sell and benefit from the business, but the Exchange customer would write checks to Redmond.
  • Resellers get 20% margin. That's in the US, anyway. That means $10/user/year. Period. Have you ever seen such price transparency (and low points) in any reseller program? I haven't. The entire term sheet would fit on a 1/3rd of a page.
  • Enterprises can't be their own reseller. They have to sell to at least someone other than themselves. Otherwise, this would be a simple way for a enterprise to whack 20% off the already low $50/user/year cost.
  • Google will provide technical admin support if requested. They won't provide end user support. though. That's one of the value-added services that a VAR can provide.
  • Google won't shut of a reseller's customers, even if the reseller goes belly up. This just makes sense. Google would rather carry the contract and convert the customer rather than see the customer get cut off.
  • The program is specific to Google Apps. It doesn't include other Google products, at least not at this time.
  • The free version of Google Apps is no longer available to companies larger than 50 people. This pivot makes sense, but is yet another indicator that Google is serious about selling email, IM, sites, video, and docs.

What this means for information and knowledge management professionals:

  • WIM #1: Google is serious about making money with Google Apps Premier Edition. It still has a mountain to climb to earn enterprise credibility, but customers like Genentech, Avago Technologies, and a slew of universities can't all be wrong.
  • WIM #2: Google can make money at $40/user/year, which bodes well for the future. If Google were just scraping by at that price, they wouldn't be scrambling a battalion of resellers to meet demand. They can clearly make money at $40/user/year. Take note, email administrators, CIOs, information and knowledge management professionals, and the competition.
  • WIM #3: The Google Apps portfolio will just get stronger. How? Because these are value-added resellers. They have to be 'cuz nobody can live off of $10/user/year. To survive, they will have to extend the application and integrate Sites, Docs, Video, Talk,Gmail, and whatever else Google Gmail Labs dreams up into their own cloud-delivered products. Ipso facto: the ecosystem will invest; the product portfolio will improve.

Disagree? Please comment.