Hosted Apps in the Enterprise

Today’s news about Google acquiring Postini should emphasize the significant amount of interest and focus that Google has placed on the “enteprise” software business. If you look at what the Postini acquisition offers, the biggest benefit to Google is likely the existing customers using their service. It is doubtful that their technology assets are seen as strategic, or even as a significant benefit to Google’s existing customers, but I’m sure their roster of current customers, including Fortune 250 clients, is a major attraction.

One of the biggest objections that Google is seeing (and will continue to see) is that enterprise IT doesn’t want to host their data with third-party technology providers. By delivering an integrated set of applications and security tools with a proven track record providing hosted e-mail services for enteprise customers, Google can start to more effectively handle some of the key objections they face. For other companies, including Microsoft, to make progress in this space, it is likely that the model for selling this concept will be to lead with security and compliance solutions and to convince organizations that this approach provides an advantage over traditional IT services managed on the customer’s premises.