Google Grabs Enterprise Customers

Already a force in Web and ad-related search, Google is gaining traction in the enterprise.

The Mountain View, Calif., firm has nine new customers for its specialized hardware/software appliance. They are: the City of San Diego, Discover Communications, Hitachi Data Systems, Nextel, Pfizer, Procter & Gamble, the San Diego Union-Tribune, the U.S. Army and Xerox.

Financial terms were not disclosed. But more important than dollar figures is the creeping shadow of the industry’s biggest name in a sector where firms are still jockeying for position.

Given Google’s name recognition and ease of installation, it could present “a serious threat” to general enterprise search firms, said Matthew Berk, an analyst with Jupiter Research.

Google introduced enterprise offerings last year, but has said little about their adoption. Like the company’s other search products, they use algorithms to organize millions of documents on corporate intranets and Web sites.

The product comes in three models: the GB-1001, for departments and mid-sized companies; the GB-5005, for customer-facing Web sites and company-wide intranet applications; and the GB-8008, for centralized deployments supporting global units.

Pricing starts at $28,000, including two years of support and software updates.

Since the company is privately held, it does not release financial figures, or break out business segment revenues but it said demand is growing and the appliances are in use by “hundreds of institutions.”

Wall Street has been buzzing with the prospect of a Google IPO for months, however, executives are in no hurry, citing adequate capital and the regulatory and reporting hassles of going public.

Google’s multi-front push comes as others sell units to specialize in one search area. For example, Overture sold its enterprise business (which it had acquired from AltaVista) to Fast Search & Transfer.

Still, Berk said Google’s enterprise offering won’t muscle everyone out. Some firms — namely natural language and guided navigation plays like Endeca, iPhrase and inQuira — have niche product with financial service firms and consumer electronics retailers.

Berk doesn’t expect Google to acquire such a firm near-term because the market for general enterprise search is big enough, and it’s growing.

Editor’s note: Jupiter Research and this Web site are owned by the same parent company.

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