Keystone Corps

It’s a bright, sunny afternoon at the Googleplex, Google’s headquarters in Mountain View, California.

In between the white and glass buildings that house the offices, swathes of green grass and neatly trimmed hedges offer relaxing spaces to chill out or eat lunch in. Red, blue and yellow umbrellas and seating add a Google-branded completeness to the landscape.

Every so often a Googler speeds past on a bright yellow JacMac Scooter, off to the next meeting or, possibly, one of Google’s many free talks – maybe a ‘Google University’ lecture, a “TechTalk” or an Authors@Google seminar (this week it’s Sci-fi writer Neal Stephenson).

You won’t see many cars here. But there is space for nearly 2,000 of them underground. The 26 acre Googleplex includes public trails and a 5 acre public park – a spirit of space and leisure pervades.

I’m looking out on all this from the corner cafeteria of “Building 47”, where I’m sitting with Matt Glotzbach, Product Management Director, Google Enterprise. Even indoors, it’s impossible to forget where you are. Red, green, blue and yellow prevails – cups, plates, noticeboards, chairs and, even, lava lamps.

With all the buzz around Chrome and Android, it’s hard to imagine that just a few years ago, when Matt started, Google didn’t do “apps”. Search and advertising (AdWords and AdSense) were the only products.

“Enterprise has always been in the strategy. It got delayed because of the ad side going stratospheric. Now there’s been a refocus. Enterprise is the second largest business at Google, behind the ads. And I like to say that we’re going to create the second ‘large’ business.”

Indeed, if Google Enterprise produces anything even half as successful as Adwords (which generated $16.4billion revenue in 2007), Matt and his colleagues will no doubt be very happy bunnies.

“There’s a culmination of events that make this the right time for apps,” says Matt. “Internet connectivity is almost ubiquitous, and cloud computing has hit a maturity point”

Ah yes, the cloud. Although there are disadvantages (see Bill Thompson’s piece on security), cloud computing is seen by many as the next big leap forward for the internet industry. And if the cloud is where the action is going to be for the foreseeable future, Google has an enviable share of it.

Google certainly seems to exemplify what Marco Iansiti and Roy Levien describe as the “keystone advantage” – this term is taken directly from biological ecosystems where “keystone” species are those that maintain the healthy functioning of the entire system because their own survival depends on it. Google is positioned not only to help foster the health of the system, its lynchpin role means that it benefits more than most from that system’s good health.

“Because every transaction is performed through the Google platform, the company has perfect, continuous awareness of, and access to, by-product information and is the hub of all germinal revenue streams. There’s no need for Google to do market surveys and statistical analyses to forecast trends in the ecosystem; the information is already in Google’s database.” (Iyer, Bala & Davenport, Thomas H., Reverse Engineering Google’s Innovation Machine, Harvard Business Review Article, 1 April 2008, pp.5-6)

See also Umair Haque’s recent piece on Chrome for a great analysis of the inclusive strategy of the launch behind Google’s new browser.

This full use of network effects helps make Google a definitive “web 2.0” company.

Furthermore, Google is in the enviable position of being seen as trustworthy by its users, as it doesn’t need to do anything underhand to obtain this invaluable information. Unlike other large monopolistic companies, Google is unusual in that it is generally liked and respected by its user base (“if we ever lost user confidence, we’d cease to exist in a very short time”, agrees Matt).

As for that “keystone” position, Matt nods his head: “We’ve become a big brand, a household name. We’re a mainstay, a staple, in all our users lives.”

This pole position in the ecosystem has another core advantage – Google has a continued ability to attract key talent:

“The team here are fantastic. In any company, there’s always a risk the team will get watered down but, if anything, the opposite seems to have happened here. The company has grown enormously since I arrived – we’ve gone from 2,000 to 20,000 in four years.”

Like many successful companies, Google has a notoriously drawn out hiring process. The company has to make absolutely sure that any new hires are going to be absolutely right for the fast-paced, intensively innovative environment – and help sustain Google’s competitive advantage into the future:

“It’s tempting to hire people with a long history of success but you can’t tell what the world will look like in five years time.”

Today, says Matt, Google’s sheer weight of users and its advertising income combine to enable it to watch – and follow – virtually every trend on the horizon. The business looks – at this stage – invincible.

With policies such as the “20% rule” (where developers spend 20% of their time working on their own projects – Gmail came out of this) and the famous “do no evil” mission statement, both part of the culture from day one, Google proves itself to be a textbook innovator.

“One of the things embodied at Google is empowerment,” says Matt. “A governance model and corporate structure do exist, but their impact is subtle. People want to be empowered and Google is lucky: we got to start out [offering empowerment] and then maintain it as we got bigger.”

And Matt is finding that his enterprise clients now want that sort of ‘flavour’ as part of their IT infrastructure:

“This Millennial Generation – Generation Y – grew up with openness and sharing as values. Now we’re seeing the other side of that – companies want to bring Google apps into their businesses – because their Generation Y employees are used to working with them.”