Photo: Illustration: Ellis Hamburger
Larry Page talked about three priorities on yesteday’s earnings call, but Google Apps and the company’s enterprise business wasn’t on the list.Here’s what he said, direct from the transcript posted on his own Google+ account:
I think about our products in three separate categories:
First, there is search and our ads products, the core driver of revenue for the company….
Next, we have products that are enjoying high consumer success–YouTube, Android and Chrome. We are investing in these in order to optimise their long-term success.
Then we have our new products–Google+ and Commerce and Local. We are are investing in them to drive innovation and adoption.
As Jon Brodkin at Network World also noticed, Page never mentioned Gmail or Google Apps, although Nikesh Arora later ran down some recent wins for that business.
It’s also notable that enterprise and Apps are not among the seven businesses with a leader who reports directly to Page. Those businesses are search (“knowledge”), advertising, local and commerce, Android, YouTube, Chrome, and social (Google+, mainly).
Why is that?
The simple truth is that Google Apps isn’t driving much revenue for the company. It counts in the “Other” (non-advertising) category, which accounted for only $310 million of the company’s total $9.02 billion in revenue last quarter. That’s about 3%.
Worse, that percentage hasn’t changed — it was about 4% a year ago, and 3% two years ago.
This doesn’t mean that Google is about to abandon or defund its enterprise business — just a couple months ago, the company announced a big new push for Chromebooks in businesses, and it’s always updating Gmail and the other apps and trumpeting its big wins.
But more and more, it looks like Google views enterprise a defensive business meant to keep the heat on a hated rival — Microsoft — more than a big long-term opportunity in itself.