Google’s Trojan Horse into the Enterprise?

On the heels of partnering with Google Enterprise to integrate Google Apps into, Google has now done an equally extensive partnership and integration with SuccessFactors around embedding Google Apps and other apps into the HCM SaaS applications of SuccessFactors.

Google’s enterprise playbook seems like it is, or should be, clear … continue to build the collaborative productivity applications on the backs of consumers, layer & integrate them into the main enterprise SaaS apps via partnerships, and then probably consolidate those companies into Google – i.e. acquire SFDC, SFSF / TLEO, and others in core SaaS categories where the players are getting enterprise traction (i.e. above only SMB).

This is not the first time somebody has suggested that Google might acquire, but the path is becoming clearer, and it would be more logical as part of a broader SaaS consolidation play along with SuccessFactors, and potentially others like Omniture and/or Taleo.

Even Eric Schmidt has commented publicly about the core nature of apps to Google (quote below was pulled from here):

CEO Eric Schmidt described “apps” as one of three strategic components for the company, alongside search and ads, adding that charging businesses for apps “is a business that looks like it is going to grow very nicely for us.”

What is unclear is the potential timing of this playbook being executed …

Some reasons why it might happen quickly are below:

  • Cisco or somebody else (Microsoft) takes a strong interest in acquiring, which could force Google’s hand as SFDC is a unique property
  • Google feels pressure to diversify more quickly from its pure advertising model sooner due to the economy and other factors

Regardless of the above, I would consider betting that Google starts running a playbook like this within 18 to 24 months at the latest. The need for new growth engines may be motivation enough to move quickly, and as Henry Blodget points out, building out an enterprise-class sales & support infrastructure is not something that happens overnight.

It certainly seems like the clock has begun to tick faster for Microsoft on its Exchange / Sharepoint / Office franchises. With that at stake, the fascination with Yahoo is an even bigger head scratcher.