Google’s Channel Gets Bigger With HP Deal

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Hewlett-Packard is now an official -- and probably the largest -- reseller of Google Apps for Business, which it will bundle with its PCs, printers and other hardware. The deal makes HP’s SMB IT in a Box available to its army of resellers, greatly expanding Google’s channel universe.

Microsoft Corp. always said the day would come when an innovative competitor would break its grip on the marketplace. That day may be here: Google Inc. has landed a whale of a partner -- Hewlett-Packard Co. -- to bundle and deliver its Google Apps for Business to the market through the channel.

HP will create new HP SMB IT in a Box based on its personal computing and printing hardware and cloud-based services provided by Google. Essentially, the deal makes HP a Google reseller -- perhaps Google’s largest reseller. And HP is greatly expanding Google’s total channel universe by allowing its thousands of channel partners around the world to take the bundle to market.

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"HP recognizes the constantly evolving needs of SMB customers in today's dynamic business environment. Together with HP's channel partners, we will offer our customers an incredible bundle of PCs, printers and Google Apps for Business, enabling business owners to focus on their customers instead of worrying about IT," said Ron Coughlin, senior vice president and general manager of HP’s Consumer PCs and Solutions.

The HP deal is more than just a massive expansion of Google’s channel and market potential; it’s also about the potential expansion in capabilities and support. HP plans to complement Google Apps by integrating it into its management console to ease administration and support.

"We couldn't be more excited to have HP join the Google Apps Reseller Program and bring its decades of experience to helping SMBs thrive in the cloud. We look forward to working closely with HP moving forward to help businesses make the most of technology," said Amit Singh, president of Google Enterprise.

The HP-Google deal comes as Microsoft spends tens of millions to drive adoption of its Office 365 service, which provides businesses and consumers access to popular applications such as Word, Excel and Exchange via cloud computing. Google Apps has challenged Microsoft’s dominance in productivity applications for years and has scored major wins in government agencies and universities; more than 5 million businesses -- mostly small -- use Google Apps as their primary productivity suite.

For Microsoft, the HP-Google deal is a major blow. Sales of Windows 8 -- the latest version of its flagship operating system -- have been sluggish, while Google’s Android mobile operating system continues to expand. Microsoft once enjoyed a near-monopoly on the PC; now manufacturers including Acer Inc., Lenovo and Samsung Electronics Co. are marketing PCs and ultrabooks running Google Chrome. And, as noted, Google has proven formidable in challenging Microsoft for service sales, particularly in government.

While Google still trails Microsoft in most measures -- product adoption, revenue and channel support -- Google is showing its ambitions by tying up with HP. And, with HP, Google gains access to a proven and reliable channel that could rapidly expand its sales and market share.

Chances are Microsoft will not take this challenge lightly. Expect to see Microsoft dismiss the value of Google Apps (as it always has) and draw partners tighter to maintain its market share in this lucrative segment.

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