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Google for Work Partner Program: One-Year Reality Check

google-apps-for-workWhen it comes to cloud computing, most channel partners got their start selling SaaS solutions like Google Apps or Office 365. But the early days of SaaS are over. And it’s time for partners to connect the dots between SaaS, IaaS, mobile and more. And that’s exactly the point of the Google for Work & Education Partner Program.

Launched in December 2014, the partner program essentially gives IT service providers a multi-lane highway that features:

  • Google Apps for Work
  • Google Cloud Platform
  • Google Chrome for Work
  • Google Maps for Work
  • Google Search for Work
  • Google Android for Work

Partners that join the program can ride in a single lane (say, Google Apps for Work) or navigate across multiple lanes (Maps, Chrome, Android, etc.). When Google launched the consolidated partner program a year ago, top partners started to receive even better margins. But some lower-level partners felt discouraged by big quotas… and some skeptics switched to Office 365. I’ve also wondered where Google’s SMB strategy fit into the conversation, especially since the departure of SMB Lead Jeff Ragusa in early 2014.

Google Sees, Shares the Bigger Cloud Picture

Murali Sitaram

Murali Sitaram

Now, it’s time for me to eat some humble pie. Murali Sitaram, managing director for Google for Work Partner Strategy and Global Alliances, explained the partner strategy to ChannelE2E last night. I was impressed for a range of reasons.

Let’s start with the big picture. “At our core we are a technology company,” says Sitaram. “We’re not a sales and marketing company. We won’t hire tens of thousands of salespeople.We don’t do professional services. Every other enterprise company has some level of professional services. With those factors in mind, partners become super critical to us.”

He also sees an advantage vs. traditional enterprise vendors — which are trying to navigate a sharp bend in the road, shifting from complex products that require time-consuming consulting services to activate… toward easy-to-deploy cloud solutions.

Of course, thousands of traditional VARs are trying to decide between Google Apps and Office 365. And it’s clear to ChannelE2E: Office 365 has enjoyed serious business momentum lately.

But here’s the twist: It’s time for channel partners to push way beyond SaaS reselling. It’s far smarter for channel partners to connect the dots between SaaS, IaaS workloads, mobile, cloud monitoring and more. The Google for Work Partner Program is designed exactly for those needs. (Yes, Microsoft is moving in that direction with its own partner programs for Office 365 and Azure.)

One for All

For a full year now, the Google for Work Partner Program has united everyone under one partner program — and onto one management console (Google for Work Connect). There are two levels of partners. A basic level, in which partners earn 20 percent of a Google Apps deal (essentially $10 for each $50-per-year-per-seat customer deal). Move up to the Premier level, and partners earn 30 percent of each seat sold for the first three years of the deal. Generally speaking, those are generous margins in the world of SaaS.

“We have the best margin conversation; we pay more to partners than most other companies in this space,” asserts Sitaram.

But here’s where the Google and Microsoft strategies really head in different directions. Microsoft seems to be appealing to the masses, recruiting thousands of traditional Windows Server resellers and VARs into the Office 365 reseller program. Google, in stark contrast, sees 60 percent of its partner business flow through Premier partners — and there apparently are only a few hundred of them. It reminds me of the 80/20 rule — hypothetically speaking, sort of like 80 percent of the partner spoils going to 20 percent or less of the Google partner base.

That’s likely a wise move for several reasons. By rallying around a few hundred really successful Premier partners — instead of thousands of average performing partners — Google likely lowers its channel support costs. Second, Google can likely ensure a solid customer experience by matching its preferred Premier partners with the most demanding customers.

Three Partner Tracks

The Google for Work Partner Program has three tracks — Sales, Technology and Services.

  • Sales partners are basically online partners that turn the lead over to Google, and don’t manage the customer.
  • Technology partners, predictably, write plugins and other enhancements for Google’s various platforms.
  • Services partners are Google’s “bread and butter,” selling the customer, managing the licenses over time and overseeing the deployment services. Here, Google is working mostly with those born-in-the-cloud partners, says Sitaram.

For partners that want to do less work, there’s the Google Apps Referral Program — which pays a one-time partner fee for a sale.

Navigating Google’s Multi-Lane Highway

But back to the bigger picture: Partners can continue to focus on a single specialty (say, Google Apps for Work). But increasingly, partners are navigating multiple lanes on Google’s technology highway — building services that connect the dots between Google Apps for Work, Google Cloud Platform, Google Android for Work and more.

“That’s the core of the program,” says Sitaram. “Most of our top-tier partners are multi-product. They introduce chromebooks to customers. Then they introduce [Google] Maps to show customers where their end-customers customers are. We want to incent those types of behaviors.”

Cloud and SaaS Competition

At the same time, Google must also face off against heightened competition. During its early years, Google Apps had the best SaaS partner program in the market because the company allowed partners to fully manage billing and other customer details, ChannelE2E asserts. But more recently, Microsoft has closed the gap with more flexible SaaS management tools for partners.

“There’s more competition now than ever before,” concedes Sitaram. “But everyone is talking about the cloud — so that has a positive impact. And we’re not fighting [on premises] enterprise solutions. Everyone is considering us.”

Amid the cloud battle between Google, Microsoft and Amazon, Sitaram says Google enjoys several technology advantages. First, he points to scalability — noting that Gmail is approaching 1 billion users worldwide. And that same core code is used for Gmail business developments. Second, he points to reach — stating that Google has points of presence across the planet. Third, he evangelizes data analytics and machine learning. Google mastered both of those technologies while building its search business, and is now unlocking the power of analytics and machine learning across its other businesses.

Leadership, Partner Events… And Loans

The other big change: Google in November named former VMware CEO and Co-founder Diane Greene to lead the company’s cloud businesses.

“That’s a huge statement,” crows Sitaram. “We’re super excited. We’ve always seen Google’s commitment to the cloud internally here at the company. But externally, people really now see the commitment to succeed in this space.”

The bonus for partners? Green is “super channel friendly,” asserts Sitaram.

Building on that assertion, Google is organizing multiple partner-oriented events for 2016. For instance, the company will host a Google for Work Partner Summit sometime in March in Las Vegas, Sitaram confirms. Partner themes will also unfold at the popular Google I/O and Google Atmosphere conferences.

Google’s partner moves don’t end there. The company has also offered low-cost loans to partners in the U.S. an the United Kingdom, Sitaram says. In the second year of such a loan, ChannelE2E believes, the partners don’t have to pay interest on the finance charges.

The bottom line: Some pundits believe Microsoft Office 365 has leapfrogged Google Apps in the IT channel. I suspect that’s true in terms of pure numbers — the number of partners reselling Office 365 vs. the number of partners reselling Google Apps.

But take a closer look: The Google for Work Partner Program is far more than a SaaS story. As customers move more and more workloads into the cloud, they will blur the line between SaaS, IaaS, mobile and more. Google’s top partners are well positioned to navigate that market reality.

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