In our new report, The Collaboration Market 2020: Innovation and Momentum During Lockdown, Serious Insights pointed to the rapid developments in the collaboration market since the beginning of the pandemic and its work from home (WFH) fallout. This note looks at Google’s recent announcement of Google Workspace which further strengthens the argument that collaborative work innovation by major technology companies has entered a new phase.
Google and Work: A Reconsideration
Google’s announcement this week of Google Workspace could easily be mistaken for a rebranding of G-Suite, with some redesigned logos being joined by a few more logos. But Google intends Workspace not to just serve as a way to reposition existing technology, but as a launchpad for more aggressive investments in work experiences.
Traditionally, G-Suite was an enterprise play that evolved from Google’s experience in the consumer market. Consumers used Google’s collaboration components at home when doing volunteer work, for family events, or at school. Personal experiences fueled product consideration when they needed to get something done efficiently at work—or to purposefully work around a perceptually more cumbersome alternative, usually Microsoft Office.
Elements of G-Suite proudly took on the persona of a ragtag band of rebels. It exuded a scrappy and fast attitude, quick to deliver. Google’s offerings deftly support chaotic, real-time adventures in reaction, response, and refinement.
But work also requires production. G-Suite was not always best positioned to take on big production tasks, and complex formatting, It was not as feature-rich, or repository-ready as Microsoft’s Office and its complement of server products and partners. Ideas may gestate in Workspace, and they may well mature there, but for organizations that adopted Microsoft Word for instance, as the final stop in a publishing production, collaboration could get complicated. Workspace now supports Word document edits directly to simplify workflows and ease the movement of data between applications.
Google Workspace moves beyond individual files as complements to idea creation, and documentation, by integrating Meet, Chat, Gmail, Keep, Sites and Currents. And this is the most important element of Workspace—movement toward the elimination of information silos.
With Workspace, meetings can go on beyond time limits, moving from real-time to asynchronous. Ideas generated in Keep become Google Docs. People in a Chat can create new documents on the fly, for sharing beyond the chat inside, or outside, the organization. New file previews will minimize movement between apps and file spaces. @mentions become actionable, rather than passive, with context suggestions like adding people to a contact, or how to reach them on a communications channel.
At the core of Workspace sits Gmail, which will soon include Chat and Rooms, along with the recently incorporated Meet. Some features will migrate to some users sooner than later, but it will take time to ship the final integration. When the client does ship, it will welcome multiple collaboration channels into the originally purpose-built Gmail client, moving it from an e-mail reader and responder to a communications and collaboration hub.
Google’s design is much more integrated than Microsoft’s approach of pushing features into Teams, but keeping e-mail relatively separate save basic sharing of Teams content and a common calendar. With Google’s design, one can imagine a future where chat about an e-mail expands an e-mail into an asynchronous chat. It may even plant the seed for a meeting. Alternatives to e-mail often tout their superior constructs to e-mail, and we have always agreed. (See How to Unshackle Yourself from E-mail and Why It’s Time to Embrace a New Collaboration Model). Google hints at more fluidity between communications functions. Roadmaps and future implementations will say more about concepts, vision, and execution.
Google Workspace Pricing
Some may see the move to Workspace as a way of raising the price of what used to be G-Suite. And in a way it is, but I don’t see the motivation for the price increase as purely financial.
CNBC speculated that:
The changes might help Google increase revenue and become a more formidable challenger to Microsoft, whose Office 365 applications are more popular for business use. Any growth could lift Google’s cloud business, which reduces Alphabet’s dependence on Google’s advertising business, an operation that faltered in the second quarter under the pressure of a pandemic and a recession. (see Google’s competitor to Microsoft Office is being rebranded as Workspace and getting new pricing tiers).
Google’s cloud may be looking for a lift, but productivity isn’t a quick place to drive rapid influxes of cash. It may well prove a stabilizing fiscal element over time, but an October 2020 announcement of a plan that will likely require 2021 and beyond to generate appreciable results, isn’t the answer to short-term pandemic financial hiccups.
Google’s pricing more likely resulted from a solid look at margins associated with a higher cost base. Enterprise-level software requires more thoughtful security and administration features, not to mention higher-order bits for more complex workflows. It will cost more for Google to compete head-to-head with Microsoft. The new tiers probably stem from that reality, including the marketing required for awareness of the positional change.
Software licensing is not what it once was when Microsoft Office Professional retailed for $499, without services. At roughly $50 a month for client software alone, any web-based subscription looks like a bargain. Subscriptions, however, unlike CD-based installs, don’t keep working should the subscription expire. On the other hand, CD-based installs don’t get the next year’s updates without buying a new license. In the rapidly changing world of work, subscriptions make sense and Google’s Workspace pricing can be considered reasonable.
See the following table for a comparison of Microsoft 365 and Google Workspace offerings.
|Google Workspace||Business Starter||Business Standard||Business Plus|
|Microsoft 365||Microsoft 365 Business Basic||Microsoft 365 Business Standard||Microsoft 365 Business Premium|
Features between the two companies differ. Most notably, Google does not offer the equivalent of SharePoint and its legacy of storage and workflow solutions.
Although Google did not share their enterprise pricing, it can be expected that significant numbers of seats will result in a substantial discount for large customers, just like Microsoft’s larger enterprise customers.
Google assured the analyst community that the transition to Google Workspace would be orderly and considered. It will be rolled out in phases of features, and rolling releases to customers. As accounts come up for renewal, account managers will work with companies to find the tier that best fits their needs.
As for consumers, Google will take time to learn from its enterprise customers before finalizing a strategy on how to bring the best of Workspace into that market.
Moving into a New Workspace
Google Workspace is the next step in a journey, a cliche, but one that nonetheless applies. As the new user experience rolls out, it will be important to see how unique, innovative, and differentiated Workspace becomes. Google is dipping its digital toes into some well-treaded waters, but there is plenty of innovation to be had. For many, collaboration remains broken for a number of reasons (see Why Collaboration is Broken). Google owns the technical expertise and financial resources to not just refine user experiences and go-to-market strategy but to reimagine how people work digitally. Future versions of Google Workspace will tell the tale of how far Google is willing to go to reinvent work.