Google (NASDAQ:GOOG) just made a simple name change for its enterprise services, but the move points to a much bigger strategy for the company. Google Enterprise will now be called Google for Work, and while it may seem like a marketing shift it actually sheds some light on Google's efforts to grab more business market share.
Android smartphones and tablets are already taking off in the business world, accounting for about 32% of enterprise market share, while Microsoft's (NASDAQ:MSFT) takes just 1% of the pie. With Google's strong business offerings in mobile, and its continued interest in taking more share with Google for Work, it's time Microsoft got just a bit worried.
Taking on business, one app at a time
There's no questioning Microsoft's position in global enterprise. In 2013, the company was the world's No. 1 enterprise software vendor and generated $65 billion in enterprise revenue -- more than Oracle and IBM (NYSE:IBM) combined.
Google doesn't compete with Microsoft on every enterprise level and doesn't even make it on Gartner's top 10 software vendors list, but that doesn't mean Google isn't a threat.
The company's advantage lies in its mobile dominance. And it's using its simple and straight-forward services like Google Drive for Work, Google Apps for Work, and others to convince users they need its apps for businesses.
The company is banking on the current trend where employees are the ones driving how businesses use software, through business trends like bring your own device, or BYOD.
At the core of this change is how mobile devices are changing the business landscape. As Gartner analyst Joanne Correia said in a report a few months back, "The software market has been changing shape over the past five years, and cloud is driving the bulk of this change as software vendors acquire and provide applications and infrastructure technology to support the cloud and the Internet of Things (IoT) movement."
That's pushed cloud-computing companies like Salesforce.com to prominence, and it's also a driving force for Google's business ambitions.
Apple is clearly in the lead, followed by Android phones, with Android tablets and Windows Phones lagging far behind.
Mobile's influence in the enterprise space can't be understated -- it's Google's biggest advantage over Microsoft in the business world.
If there's any need for evidence of mobile's importance in business, look no further than Apple's recent partnership with IBM this summer. That partnership combines one of the world's leading mobile companies with the third-largest enterprise software company.
Forrester Research expects businesses and governments to spend $13 billion on iPads in 2015, and estimates Apple will grab 11% of the entire enterprise market by the same year.
Right now Google has about 5 million business signed up for its services, including 64% of Fortune 500 companies. As the company continues to expand Google for Work, Microsoft will be the hardest hit.
There's really no comparison between Google's mobile dominance and Microsoft's struggle to gain more mobile market share. It's only a matter of time -- and sooner rather than later -- that Microsoft's lack of mobile influence begins to hurt its enterprise position.
Transitions like this never come quickly (just ask BlackBerry) but if Microsoft can't get users to buy Surface tablets and Windows Phones, and then use them at work, I think there will be a continual shift away from Microsoft's programs and services to Google and Apple's.
I don't think it's a coincidence that Google is focusing more on business, as Apple and IBM are out for even more influence in the space. But it's Microsoft who has the most to lose right now. Enterprise is the company's cash cow, and it needs to hold onto that as it works to boost its mobile ambitions. In five years, with Apple and Google advancing, it's likely the enterprise landscape could look very different than it does now -- and that's not a good thing for Microsoft.
Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple, Gartner, Google (C shares), and Salesforce.com. The Motley Fool owns shares of Apple, Google (C shares), International Business Machines, Microsoft, and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.