Microsofts Office365 Telco Strategy should make Google nervous

AT&T last week joined Verizon and a pantheon of major service providers in the  rush to offer MS Office365 email services.  good start.

Should Google be concerned? Well, I'm sure Eric Schmidt remembers only to well what happened when MS decided to kill Netscape.

Running the numbers from research undertaken by BackChannel in September 2012 Microsofts strategy of partnering with giant telco's is already biting into Google Apps for Business.

The graph shows the distribution of O365 installations by company size.

We looked at 22,000 UK companies with a recognised service hosted mail service and found MS 0365 had nearly 700 installs; so about 3%.  Checking the underlying data we see that many of the Office365 customers identified were BT SMB customers migrated off of BTs own legacy mail service, others classed as SMB had churned from Google, larger organisations from a mixture of established providers.

We can firmly predict that AT&T, Verizon, Orange,Vodafone and the dozen others partnering with Microsoft globally will have the same effect. 

In short Office365 delivered in collaboration with the Big Telco's is the start of a serious fight back by Microsoft against GoogleMail and Apps for Business and it is clearly off to a good start.

Should Google be concerned? Well, I'm sure Eric Schmidt remembers only to well what happened when MS decided to kill Netscape.

A trip down memory lane: From Mosaic to Chrome

Having been online since the late 80's Browsers have been like the soundtrack to my career from the early days of Gopher, Veronica & Archie to the arrival of Marc Andreessen's ground breaking Mosaic they've been a constant feature in my life. 
Here is a terrific little youtube documentary on the birth of the Netscape and the Web Browser and its untimely death after Microsoft decided it was time to take control of the market and launch Internet Explorer.

An interesting cameo and link between Netscape & Chrome is Eric Schmidt; who in 1998 as CEO of Novell integrated  Novonyx the Novell/Netscape joint venture into the main Novell business.  Schmidt shocked the industry in 2001 by jumping ship to join startup Google.  The rest is history, or is it?

Distribution of sales of email Hygene Services USA 2008

For the last 5 years we at BackChannel have been tracking the use of email hygiene services by organisations around the world.
We started with Messagelabs - now Symantec.cloud, Frontbridge - now Microsoft, Postini, MXLogic - now McAfee, Blackspider - now Websense in the USA and UK.  Over the intervening years we went on to include new and upcoming players like Google, Mimecast, Trend & zScaler and our range of deeply profiled regions expanded to 17 including France, Germany, Australia, Singapore, Hong Kong and Scandinavia.
Today we track the use of 40+ services by over 1 million organisations in upwards of 50 countries.
We are proud to have been able to help many of these companies achieve  sales and business development goals and in some cases to support company valuations and investment rounds.
We will shortly be releasing our January 2012 Analysis of the use of these services and we will post our findings for the Fortune Global 500 companies here on this blog.
In the mean time here is a fun interactive 2008 chart showing state by state distribution of the sales by those key players. Have fun comparing them and pondering on why Messagelabs was strong on the East Coast and Postini in the West.


2008 USA email hygiene service sales, by state.

Those of you who know us well may know that we also profile the use of all major telecoms services including Access, Hosting and CDN services.  So if you are interested in the services used by a customer or competitor, if you are selling into these markets or if your a CIO who wants to know what their company really buys around the globe; why not contact us on +44 (0)1223 968481 and see what an innovative  Cambridge company can add to the mix.

Hosted email security: The 2011 market report - Now in it's 5th year

Your opportunity to find out who's using these services, who's winning market share and who's falling behind.

Now in it's 5th year BackChannel's flagship survey has been expanded again to cover the use of hosted email hygiene services amongst a million organisations & businesses in 17 key countries.

The reports covers 40+ service providers including all your favourites; Messagelabs, Microsoft, Google/Postini, Webroot and many localised service providers you may not have heard.

It's been an interesting and turbulent year find out who's up, who's down and whether those $100s of millions spent on acquisitions in this sector are paying off.

A must read for executives, investors and any business involved in the delivery or purchase of email security products and services.

Interested in sourcing a copy then drop me a mail and either me or one of the BackChannel team will get back to you.

High Speed Broadband - UK Failure to Launch

I was thinking again about the Google'isation of the world, which mostly involves Google giving people stuff that they want for free - and renting their eyeballs out to all comers.  I came back to Google City, or what was once called Topeka, Kansas.   Google are planning to roll out a a Gigabit Fiber Network for 50,000 homes somewhere in the US - see previous post.

Compare this with the Netherlands and the UK;

In 2003 the City of Amsterdam funded a pilot fibre network to cover 40,000 homes in May 2009 The Amsterdam Fiber Network was expanded to 150,000 homes & businesses in the City.  The Dutch Minister responsible for information stating that "...high speed (Gigabit) Internet was a necessity and should be open for all".  City of Amsterdam paid for the infrastructure and now makes a profit leasing it to the private sector.

In the UK a vague target of 2mb for all by 2012 set out in the Digital Britain Report is made laughable by no ideas for funding other than a £6 ($10) a year tax on phone lines which they would probably give to BT and will most likely drop as the UK elections loom over a stricken and debt-riven nation. 

Hold this in your mind: the UK Gov' considers 10Mbps Broadband to be "Superfast' This short example shows just how far away Digital Britain really is, and how that impacts on the economy.

We have small sub-office just North of Cambridge we decided to run a Business Broadband line in and use it for long term storage and Disaster Recovery.  Despite being just 3 miles from a fiber enabled exchange the best speeds achievable were 468Kbps - which BT informed us was above 440Kbps and wa therefore an acceptable speed for a Business Broadband service - On which planet is that speed acceptable??

Come Google and rain down your love on Cambridge - I am sure we can name a College after you!!

An iPhone Accessory that won;t sell anywhere it snows

I was pleased to see another clean tech (or electric) vehicle manufacturer loving the iPhone it's there in the interior shots just like the Chrysler Peapod. The oddly cute Aptera 2e looks like a Cessna with the wings lopped off and is due to ship later this year, .Maybe, if I lived in Silicon valley I might buy one; except of course the roads there are jammed with big cars and giant trucks, and drivers on PCP.

Back in the 80's I got a lift to work in an ancient Morgan 3 wheeler which spent the entire trip going sideways. with the rear wheel hopping from rut to rut at random intervals.Morgan; No iPhone adaptor, No Wimax, Not great in the Snow... but likely to be around longer than the 2e.

Sprint and Google show Wimax has legs with $3.2Bn Clearwire investment

Google, Comcast, Time Warner, Intel & Bright House have coughed up $3.2bn (about £2.1bn) and Sprint has 'donated' their country wide Wimax license to a new company Clearwire.

As a connectivity nut I've been waiting for this since I first saw Wimax demo'ed at Intel back in 2003, it was low powered and pretty ropey but it worked. How things have changed take a look at this Clearwire Demo 7mb up 3mb down when your driving around, ok it's a demo: then again a $3.2Bn investment in the middle of the worst recession in 70+ yrs, tells me that they're sure it's going to work.

The reality of a truely mobile wireless high speed "broadband" internet is interesting (exciting) enough, but when it finally becomes ubiquitous as it will, forget personal Internet access for a moment think of the huge array options for in car entertainment, roadsafety, traffic management; streaming audio, video, headup displays, location based services and advertsing etc... I for one can't wait to see what opportunities this will eventually deliver.

In the realm of personal communications you can shove a lot down 7mbs; most of us will no longer need land-lines for home broadband, or telephony; most former PTTs can wave goodbye to their cash cows. You can see why the mobile service providers who have been poo-poo'ing Wimax for years, and who spent all those billions in overhyped auctions are certain to keep the Andrex puppy in dog biscuits for the next few years.

Remember as late as 2000 BT and Co were denying DSL Broadband would ever be widely available and that ISDN, X-25 and Dial-up was here to stay.

Google polishes up Chrome to support GoogleApps

Whilst it has been slow to take off in Europe and the rest of the World, GoogleApps for Business have been as huge success in the US. In Mid 2007 we electronically surveyed 550k US companies to see who was using GoogleApps mail services and it hardly hit the Radar.


Re-running the Survey in Mid 2008 the results couldn't have been more different. GoogleApps had arrived, and the demographic is right in the heart of the US business, companies with between 20-250 employees.

You're probably all Google Chrome'd out by now but a significant part of the Chrome announcement is that it has an application development kit called Gears that allows Web App Developers; like ourselves, Salesforce, etal, to build Off-line features into our products, making them portable.

For Google, this means that users of GoogleApps for Business will soon be able to compose a Gmail that includes a GoogleApps Spreadsheet sitting on a plane, and have it sync up and send as soon as they are connected to the Internet again.

Google take stake in Unity TransPacific Fibre

Google has taken a stake in the Unity TransPacific super fibre linking the US Westcoast to Japan.

This is the Google that purchased a 270,000sq ft interconnect facility in New York in 2005. The Google that has a division engaged in acquiring dark national, international and metro-fiber. Is investing heavily in consumer WiMax, a mobile phone platform, mobile applications, oh and spectrum

Still think Google is a search engine and advertising company? Read on...

In 2006 Google was recognised by the American Registry of Internet Numbers (ARIN) as an ISP, when it was granted a large allocation of IPv6 addresses.

At the time of the allocation ARIN's director of external relations , Richard Jimmerson, said. "Any organization that has received (IPv6 addresses) has met that criteria -- and that would include Google,"

Note: IP v6 will enable the Internet address space to several trillion, trilion addresses, more than enough to absorb the current 4 billion IPv4 Internet addresses several times over. They must be planning an awfully big grid network, or is there more to it than meets the eye?

Nervous now? Get in line behind Microsoft; a queue is forming.

Google to acquire Postini leading US Mail security vendor

Breaking news in the informartion security area is that Google is to acquire the US leading email security vendor Postini .

In April this year Postini and Google announced a strategic tie up for the consumer oriented Gmail.

Now (July 9th) it is announced Google will acquire Postini for $625 million in cash, subject to working capital and other adjustments, and Postini will become a wholly-owned subsidiary of Google.

Dave Girouard, Vice President and General Manager of Google Enterprise. said "The response to Google Apps has been tremendous, with more than 1,000 small businesses signing up for the service every day. At the same time, large businesses have been reluctant to move to hosted applications due to issues of security and corporate compliance. By adding Postini products to Google's technology, businesses no longer have to choose -- employees get the intuitive products they want, and the company achieves the security and assurance it needs,"

CEO Eric Schmidt commenting on the addition of Postini to the Google Apps portfolio said "With this transaction, we're reinforcing our commitment to delivering compelling hosted applications to businesses of all sizes. With the addition of Postini, our apps are not just simple and appealing to users -- they can also streamline the complex information security mandates within these organizations,"

The news comes as this sector hits hypergrowth. As second quarter of 2007 saw a hockey stick in the adoption of managed hosted mail security, it also saw Googles arch rival Microsoft growing deployments of the Exchange Hosted Services Portfolio based around their strong Frontbridge solution.

This strategic move by Google looks to have slipped them ahead of the game;

Here is the market share data for use of these services amongst some of the worlds largest corporates. The FTSE350 and the Fortune 1000.





As you will see, we left the old names on but here for completeness...

Postini = Google, Frontbridge = Microsoft, BlackSpider = Websense and Messagelabs well there still Messagelabs.