http://www.forbes.com/forbes/2009/1228/technology-google-apps-gmail-bing.html?feed=rss_popstories
Forbes Magazine dated December 28, 2009
Eric Schmidt wants to merge play and work on the desktop. Is that such a terrible thing?
The trio inside the Trojan horse: Rajen Sheth, Sam Schillace and Bradley Horowitz have overseen the engineering and design of Google Apps.
Your day begins with a wake-up call from your Google Android phone. As you run to the shower, you hit Google News and check headlines, then Gmail. Your first appointment of the day has been moved to a new location; Google Maps will direct you there. Quickly update your expense report--including the printout of that sales presentation using, say, Google Template--and shoot them to the back office in India (in Hindi, if you prefer, with Google Translate). Your boss wants to discuss your group's contributions to some marketing documents? Lean on Google Groups. You're not even out the door yet. You have the rest of the day to search for work-critical information on the Web while you're at the office--to say nothing of snatching a few moments to download a game, check stock prices, organize your medical records, share photos and pick a restaurant and movie for the evening. How convenient.
And a little creepy, perhaps. Google ( GOOG - news - people ) wants to own your every waking minute online--at home, while in transit, at your workplace, wherever you happen to be. It makes connectivity oh so easy, on a desktop, laptop or mobile phone. How much easier via a little-known business called Google Applications that allows us to instantly share Google calendars, spreadsheets, memos, reports, e-mail, corporate blogs, presentations and more--much, much more--by storing them in Google's enormous data centers. These bundled office-suite services make Google money on subscriptions, but they are also something of a Trojan horse to pull more people onto the Internet so that Google can make even more money from ads. By expanding what kinds of information people organize and share, as well as what they search, Google makes users ever more dependent on it to get through the day. But just who is in control here?
Eric Schmidt, Google's owlish chief, sounds so reasonable. "Our model is just better," he says. "Based on that, we should have 100% share." As for that other company battling to take over your online life? Microsoft ( MSFT - news - people ) "has many issues, including fixing the problems with their products," says Schmidt.
Microsoft isn't exactly rolling over. It's getting a boost from the early success of its search engine, Bing, and Windows 7; Office 2010, with a Web-based version of its software, looks promising. Recent discussions with News Corp. ( NWS - news - people ) about paying for content and blocking that content from Google demonstrate Microsoft's eagerness to challenge Google on every front.
The three-year-old business of Google Apps is easy to miss, given the long shadow of the company's online ad business, which has 60% of its market and will pull in the bulk of Google's $22 billion in revenue this year. Off to the side will be another $750 million or so largely from sales of Google Apps to corporations for $50 per user per year, a fraction of what Microsoft Office sells for. But Schmidt's vision is about more than money. As Apps becomes tied to a Google computer operating system (Chrome OS), Google mobile computing (Android) and Google's application-friendly Web browser (Chrome), it promises--or threatens--to reshape both the tech landscape and the way we work and play.
Google's Chrome Web browser is designed not just to connect your computer to the Internet. It will also let Google Apps operate even when you're not online, just the way Office does. Google is developing an operating system slated to appear a year from now in netbook computers that will cost under $300 (maybe even free, with an App subscription) and be dedicated to the Chrome browser. This new netbook goes from off to online in ten seconds. A recent demo of Chrome OS featured the Pandora online music player, a service that allows you to name your favorite music, then sends you tunes similar to what you apparently like (based on roughly 400 attributes) and enables the creation of 100 personal "stations." Android, an open-source mobile phone operating system introduced in October on a new line from Motorola ( MOT - news - people ), brings with it a small universe of Google computing power, including new gps navigation systems with such features as predicting traffic congestion.
Let Google own your digital life, every last bit of it? Such a life would have its attractions. No longer would your data be inconveniently out of reach--your boss has an urgent question when you're home, but the spreadsheet with the answer is at the office. No longer would you get pestered with notices on your PC to download an operating system upgrade or extend the subscription on your Web security. You wouldn't worry much if your computer got stolen or fell into the bathtub; with a low price and little personal data on the machine, these netbooks may be like office furniture--if one breaks, you toss it aside and pull another from the closet. Your employer might be thrilled to move its data processing into the cloud (see related story, "Virtualization Versus the Cloud"), since that would mean savings on computer support staff.
Possible downside: You have to have complete and total faith in the company running the data repository. What if someone hacked in and got your tax return?
From 25 people in 2004, Google now has 1,000 of its 20,000 employees working on enterprise products, largely Apps. Four hundred are engineers; most of the rest are involved in sales and support, a high proportion at engineer-dominated Google. The enterprise is still dwarfed by Microsoft, which makes $19 billion from the office suite. Still, 2 million businesses have signed on to use Google software in its short life, drawn by cost, speed, collaboration and control. Most customers are tiny, but they include 15,000 workers at Genentech ( DNA - news - people ), 35,000 at Britain's Rentokil Initial ( RTOKY.PK - news - people ), a business services outfit, and 30,000 in the Los Angeles government.
In a notable experiment Genentech bought both Apps and Office for all employees. Roughly 2,800, or 40%, of its workers who rely on business applications the most have migrated to Apps. The company says it has saved money on hardware and support staff from just that crossover. Genentech asked Google for features like a calendar that could handle large meetings, sorting out rooms and audiovisual needs, meetings for more than 1,000 employees at a time--700 additions in all. "They knocked them all out in a couple of months," says Todd Pierce, chief information officer at Genentech. "We ran it for 90 days to make sure the bugs were out, then moved 2.5 million items off the Microsoft calendar over a weekend, losing just 80 items." Pierce requested 15,000 dummy log-ins to make simultaneous requests to the system. "They gave them to me in a couple of hours," he says. "If you were testing Microsoft or [IBM's] Lotus, you'd need several weeks and several hundred thousand dollars in servers."
By selling on price, convenience and features, the Apps archipelago promises a potentially new kind of computing ecosystem, as different as personal computers were from mainframes. The Silicon Valley rush to cloud computing focuses mainly on cost saving, but that aspect of it misses the importance of creating and consuming information that's continually updated, commented on by others and accessible anywhere. There are no files or folders; just reliance on what Google loves best--search.
Search can throw off a variety of software goodies from Google. Already, a multinational can send Gmail between, say, the Berlin office and San Francisco, and the German on one end will end up as English at the other, thanks to Google Translate, which was built for foreign Web pages. Need to meet someone who contacted you by e-mail? Links to Google maps and your calendar can help you pinpoint a where and a when. All of Apps probably takes up less than 1% of Google's data centers, which have a million-plus servers. Needless to say, Google's hoard ($22 billion in cash as of Sept. 30) means the company will be refining Apps for the ten years or so Schmidt says he will need to bring it to its full power.
"Apps is search masquerading as collaboration," says Douglas Merrill, a Princeton-trained psychologist and Google's former chief information officer, who is writing a book on how search-centric computing changes our lives. "It is a behavioral change in how we view the world--a way to survive amid information overload." It could also mean more Big Brother in our lives, thanks to customizations that let corporate bosses monitor how workers spend their time.
Born in Washington, D.C., Schmidt, 54, studied electrical engineering at Princeton and computers at uc, Berkeley, where his doctoral work involved tinkering with the open-source Unix operating system. One of the key points was the importance of sharing information and developing collaborative feedback loops to improve performance. That evolving concern with the growing power of networks--coupled with a fiercely competitive drive honed on a hardening hatred of Microsoft--has shaped his professional life. One executive who has worked closely with Schmidt calls Microsoft his "white whale."
Joining Sun Microsystems ( JAVA - news - people ) in 1983 as chief technical officer, Schmidt oversaw development of the Java programming language, which allows the same type of computer program to run on many different kinds of computers, just as the Internet was taking off. Schmidt was initially shy but came to love public speaking, partly by evangelizing for Java. He led a three-month project to embed a version of Java into the browsers made by Netscape Communications, an early browser company. Microsoft crushed Netscape with its Internet Explorer browser and squeezed Sun with a version of its server software.
In 1997 Schmidt left to head Novell ( NOVL - news - people ). A powerhouse in corporate networking, the Orem, Utah company had also been sideswiped by a Microsoft offering that came with a lot more features and ties to other products. Novell countered by trying to add its own Apps business, but its $1.5 billion acquisition of WordPerfect Corp. proved a botched affair. Three days after Schmidt started the job he was told that an expected $20 million profit on the quarter was really a $20 million loss. He fired 1,000-plus people and logged 250,000 miles a year selling Novell's software, overseeing a return to its core directory business. Novell's stock rose sevenfold, only to collapse amid the dot-com bust and continued onslaughts by Microsoft.
Schmidt came to Google in early 2001, when it had fewer than 300 employees. The company's venture capitalists wanted an experienced chief executive. Founders Larry Page and Sergey Brin had built an impressive search engine, based on Linux. They gave away search to consumers and watched how they used it, tinkering with the engine based on their feedback. Slim revenues came from corporate purchases of search. Undisciplined though they were, Schmidt bonded with Brin and Page, traveling with them to Burning Man, a kind of geek performance-art hoedown held annually in the Nevada desert. Luckily he also defended their insistence in the face of VC pressure that Google hold on to its consumer search business when it made no money; the backers wanted the company to focus on corporate search. Schmidt recruited much of the group that made Adwords, Google's feedback-based ad auction system. In the 2004 public offering Brin, Page and Schmidt held on to most of Google's B shares, giving them inordinate voting power. (As of Nov. 20 holdings by the trio were worth, respectively, $18.2 billion, $18.2 billion and $6.4 billion.)
Behind the scenes Apps was taking shape. Google's young engineers were tinkering with corporate e-mail applications. They came up with software that took e-mail and made it easier to search and filter. Over time this became the Internet-based Gmail, which was released to the world on Apr. 1, 2004 (many thought it was a prank). Inside Google techies despised an Oracle Corp. ( ORCL - news - people ) calendar that could not be shared or easily transported in and out of the company, and so built an online version, Google Calendar, released to company insiders around the end of the year.
That was Schmidt's eureka moment. "The calendar was a real insight to me," he recalls. "It's been around for 20 years, or 2,000, without much change. Now you could see what people were doing--projects have calendars, rooms have calendars, people have calendars. If you can put data into that, computers can program things for you--calendars and spreadsheets can be like a program."
By then Schmidt had separated the enterprise search business from ads and was thinking about how Google's loosely organized but collaborative and dynamic structure could be useful to older corporations. In mid-2004 he, along with Page and Brin, met with Rajen Sheth, David Girouard and Matthew Glotzbach, who ran the enterprise group. "There was a notion that collaboration was broken," because there was too much information in companies, and people were too spread out, says Sheth. "Maybe we could fix it."
As if to prove the woes of collaboration using existing e-mail, the three showed up not knowing which of the 15 e-mailed versions of the presentation was the right one. Given its size and ambition, Sheth says, Google aims for products that can be used by a billion or more people, getting there via incremental software and features that it can improve as it watches and learns from how consumers take to new tools.
In the case of enterprise Apps this meant building out Gmail to handle lots of people and features, blurring distinctions between home and office by having everything on the Internet (something that was already valuable in corporate search, where a query might first look through company files, then the Internet, to find a range of answers). Engineers built spam filters and faster crawling and indexing to present information almost as fast as it was created. The consumers on free Gmail made excellent guinea pigs for tests, and their behavior told Google about how long people scanned items, say, or what they used in instant messaging.
Once a program is ready, it's common to release it inside the company to see how picky engineers treat it. In March 2006 Google acquired Upstartle, a four-person outfit with a primitive way of creating, accessing and sharing documents through a browser. The program was adapted to become Google Docs within a few months. Gmail for business had just been launched, and the enterprise operation was growing at a clip. "We were quickly assimilated into the borg," says Samuel Schillace, who designed the Docs forerunner and is now an engineering director at Apps. Schmidt first posted a proto-Docs document about an uPComing meeting. In minutes a score of edits was on it, updating old stats and what the meeting would cover. Other Google executives also started treating memos more like e-mail than printed documents.
In the summer of 2006 Schmidt put the company on the online calendar and gave every employee an account for the other Apps. Everyone got T-shirts of a cartoon Chihuahua with a giant bone inscribed, "Dogfood"--as in eat your own. People could choose to use the new stuff or stay with Microsoft Office. The key development was online collaboration: Put something down on your calendar or memo, and everyone involved in the project can see it right then. "Most of what you do involves other people, and the Internet is a superconductor for that," says Sillace. Within weeks 90% of the company was using Google Docs. Apps was released to the public soon after, with the $50 business version in February 2007.
Apps is still a work in progress. Engineers have introduced a better layout and new features, changing the structure of Gmail to embrace things like video. It still needs some security features, among other things, to satisfy the compliance needs of, say, a large financial institution. In an April 2008 meeting Page worried they were overshooting how complex a program an Internet connection could handle and still get instant updates of data. "You're trying to do everything through the browser," he said. "It will never work." Googlites had been looking at browser technology and took Page to mean what they built would have to work differently from anything on the market. They came up with Chrome, supposedly able to handle more of the Javascript language that enables browsers to act like desktops. The Chrome operating system followed six months later, as Schmidt realized that the ever sinking costs of hardware might enable Google to start taking over the work and mind share of corporate America's office computers.
Here, Eric Schmidt must pause. There are mighty forces at work to hobble his ambitions--some of them self-inflicted. Google has had plenty of flops. There was Lively, a virtual world to rival Second Life, shut down a year ago. Froogle was an online catalog of print catalogs. Orkut, a social network, is still popular in Brazil--and pretty much nowhere else. How about dMark, acquired to place radio ads the way Google puts ads on Web search results?
Microsoft, though mired in its own history of botched opportunities, is still a colossal adversary. "We have a ton of competitors, in many cases versions of our old stuff," scoffs Christopher Capossela, a senior vice president who oversees Microsoft's collaborative and online applications. "Google is a company that collects data to sell ads," he says. "That doesn't translate into a strong enterprise player."
Google has its own loaded slingshot. "We offer cheaper cost of ownership and zero cost of install, but if you don't take on the philosophy of the tools you don't get the full benefit," says Bradley Horowitz, who oversees product management for Google Apps. "The tools are a manifestation of the culture here. All those about ideas, sharing and transparency--it's not for a command-and-control world."
But it has a potentially dark side. How will people inside companies take to all that sharing and transparency? Programs that can be accessed by anyone anywhere may be great for productivity--and a real threat to privacy. Glancing at different salespeople's Gmail accounts, to take but one small example, is a way to measure which ones are hustling the most. How personal information could be exploited and by whom is anybody's guess.
Schmidt claims neutrality, as he has in previous controversies over search and privacy. "We try hard not to make value decisions--we let the customer make decisions," he says, noting that companies already own what is on employee e-mail and documents. Long before Google, companies judged productivity with video surveillance and counting keystrokes in their call centers. Apps and software like it just extends the snooping to higher-paid workers. When asked if he has ever responded to a National Security Letter demanding that Google turn over information to the government, Schmidt smiles. "We are subject to laws that I don't like--you can't sue against security laws." Privately, however, he has told friends to keep off a computer anything they want to keep private.
That is difficult, as Schmidt himself acknowledges. "In the world I'm in," he says, "everybody works all the time."
