2M businesses pay for Google for Work, but what does that mean
Google still won't say exactly many businesspeople use paid versions of Google for Work at those two million companies. Jack Dawson, chief analyst and founder of tech research firm Jackdaw, says this omission makes it difficult to determine whether or not the platform is actually making as much headway in the enterprise as Google suggests.
That group of two million businesses likely includes a mix of very small, even single-employee companies, as well as large multinational enterprises, and it's impossible to know the distribution of large and small organizations, Dawson says. "It's hard to put those numbers in context because Google hasn't provided much insight … in the past."
Google previously said that at least five million organizations used Google for Work, so while two million paying businesses is a milestone, it also indicates at least 60 percent of the organizations that use the platform do not pay for it. "That's a pretty high number, especially since Google gets very little benefit from those three million customers who aren't paying anything, and yet presumably incurs significant cost to serve them," says Dawson.
[Related News: Google for Work thriving by dumping the enterprise]
Google for Work is no longer available as a free product to new users, but at least three million businesses are still able to use their older accounts, which let them use the suite of apps for free. Google also announced another promotion last month that enables businesses under enterprise agreements with other providers to use Google for Work apps at no cost for the remainder of those contracts.
Google's largest competitor in the space, Microsoft and its Office 365 suite, reported 66 percent annual growth for the commercial version of its platform during the quarter ending Sept. 30, 2015. Microsoft said it has 18.2 million Office 365 consumer subscribers, but it didn't break out business-specific numbers.
Google this week also announced an expansion of its Google for Work partners program, as part of which the company will recommend newly integrated apps from other providers for CRM, project management, cloud-based communications and document management. Eight applications are currently available, and Google says it will continue to add more.
"Google is in an interesting spot here — it's not a tiny company, obviously, but the company it keeps tends to be small startups rather than major software or SaaS companies," Dawson says.
Google's new recommendations may not carry much weight, however, unless IT leaders and CIOs independently vet and decide to use the apps, according to Dawson. "Enterprises may well be willing to entrust important functions to Google itself, but that doesn't necessarily mean they'll see Google's partners the same way, especially when they're not well established," Dawson says.
[Related News: Why Google's enterprise pitch is a confusing mess]
Microsoft has integrated partner services into Office 365 as well, but those connections tend to come from bigger name companies, including Box and Dropbox, according to Dawson. "The names in this new partner announcement from Google are mostly smaller companies rather than big name brands," he says. "Working with partners is critical — Google can never meet all of an enterprise's technology needs — but if Google is struggling to attract the marquee names, that will curtail its ability to spread its influence within businesses."