Google: Gmail Success Spells SaaS Superiority - Page 2

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SaaS offers additional strengths, as well. During his keynote, Glotzbach suggested that cloud-based applications are increasingly driving innovation in the enterprise.

Compared to typical corporate e-mail clients like Microsoft Outlook, "any user under 30 would probably say consumer e-mail is more full-featured," he said. "You have more storage space, you can access it anywhere, there's integrated chat. That's having an enormous impact."

Which is not to say that's an open-and-shut case in favor of online services: Corporate e-mail systems have security and controls that IT departments often demand.

Glotzbach conceded that SaaS providers like Google and Salesforce.com still have work to do in convincing enterprises SaaS is as secure as traditional, on-premises software.

"Security is one thing people point to: Am I ready to trust my data to Google or Salesforce?" he said.

Instead, Glotzbach argued corporations should be much more concerned with notebook security. He said one out of ten laptops -- most of which are owned by corporations -- is stolen within the first year of purchase.

"Sixty percent of corporate data resides on unprotected PCs or laptops," he said.

Glotzbach added that Google's own IT department was "happy" to see more SaaS adoption, so more information would be stored in the cloud and not on notebooks.

The other stumbling block to more corporate adoption of SaaS is offline access, but Glotzbach said new tools like Google Gears are making it possible to run, for example, Google Docs on an offline PC or notebook.

The SaaS model is also shaking up the economics of how software is sold in the enterprise. Google sells its Premier Apps suite for $50 per user per year. Salesforce and others have similar models.

"In the enterprise, traditionally, it's been sell as big as you can upfront, charge 15 to 18 percent for maintenance costs and maybe make an upgrade sale or two down the road," Glotzbach said.

[cob:Special_Report]But he noted that consumers, and a younger generation entering the workforce, have access to powerful consumer applications like Gmail at low to no cost. The model of ten years ago, when technology innovation in the enterprise trickled down to consumers, has flipped.

At the same time, user expectations are finding their way into enterprises.

"Enterprise users are consumers -- they're the same people," Glotzbach said. "They don't put on a cape and become corporate users. They demand the same capabilities in the office they can get at home, and if they can't get it, they'll bring it in themselves."

As one example, Glotzbach mentioned the iPhone's rise to becoming the second most popular smartphone after only a year on the market, behind only RIM's Blackberry, "and smartphones are mostly in the enterprise."

According to online metrics firm Net Applications, the iPhone grabbed 71 percent of mobile browser usage in its first year.

"I couldn't imagine such a land grab," Glotzbach said. But he said it's another example of how consumers are helping to drive corporate adoption of technology -- similar to his expectations for SaaS.

"This idea of cloud computing, that we're well aware of at Google, is that's it's not an 'if' but a 'when' in the enterprise space," Glotzbach said. "And the 'when' is now."