Google Apps Turn Software World On Its Head
Google has agreed to buy Postini for $625 million in cash. Postini and Google have been collaborating since February, as Google has advanced their long term initiatives with Google Apps. Postini is a Silicon Valley company that offers services to help companies protect and control their e-mail.
Postini started out with a service to identify and eliminate spam, and it expanded to offer other services, such as the monitoring of communication for brokerage firms to insure regulatory compliance. Postini has messages routed through its own servers, which filter the spam, and then send them off to its client companies.
The concept of software as a service, of course, is one of the hottest fads in technology.
Eric Schmidt, Google’s chief executive, said, “with this transaction, we’re reinforcing our commitment to delivering compelling hosted applications to businesses of all sizes.”
Google has already taken several steps in this direction. Many have commented that the highly publicized acquisition of DoubleClick is another move in the direction of offering software to clients. In the case of DoubleClick, their software essentially services online publishers and advertising agencies.
Google claims 100,000 business customers for what it calls Google Apps. These services are offered in free versions that have advertising, and paid versions that come with extra features.
So Google’s entry into the corporate software business promises to shake up an industry that was already in turmoil due to a shift from selling software to software as a service. Google can offer software for free or at very low cost in order to insert advertising.
The implications are far reaching to be sure. But Google has always operated as a company aiming at paradigm shift not just variations on a theme.
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