Stephen O’Grady is wondering whether Google Calendar finally represents a solution to Redmonk’s calendaring woes. The downside?
Well, as Ian learned recently, you’d apparently have to be a “dipshit” to trust free services with “CRUCIAL” data (apparently your personal emails and such aren’t crucial). While I don’t buy that argument at all, nor do I fully trust services that I’m not paying for. That, more than any other reason, is why I believe Google ultimately will roll out for-pay services: folks like me are more than willing to pay for them, if the price is right.”
Stephen has a great point, and I agree wholeheartedly. I’m not going to fully trust a service provider unless there’s some financial incentive for them to provide reliable service—in other words, I’m a paying customer who can take his business elsewhere if the service isn’t up to par.
But am I not a paying customer of Google already? As Steve Gillmor has said time and time again, Google makes money (boy, does it make money) by selling my attention to its advertisers. Just because I’m not forking over $59.95 per year or whatever directly to Google doesn’t mean I’m not paying for the service they’re providing me.
To my mind, this is a whole lot like ABC vs. HBO. ABC makes money when I watch Lost, just like HBO makes money when I watch The Sopranos. They just have different ways of doing it—in other words, different business models.
In earlier posts, I opined that perhaps the software-as-a-service model isn’t viable if the service providers aren’t willing to make quality of service guarantees, you know, like “we won’t lose all your stuff if you put it here”.
Now that I think more of about it, though, it’s more accurate to say that it’s the advertising business model that isn’t viable. I don’t see too many people worried that they’re going to wake up one morning to find all their data is gone from Salesforce.com.
So, can Gmail, Google Calendar and related software-as-a-service offerings really only have quality of service guarantees with a subscription business model? For Google’s sake (which, after all, derives 95%+ of its revenue from advertising), I sure hope not.
From http://www.google.com/googlecalendar/terms_of_use.html :
Google also reserves the right to modify, suspend or discontinue the Service with or without notice at any time and without any liability to you.
Hiya
There’s a difference between the 2 models you mention. If your free-to-view ad-supported TV network goes off air during ‘Lost’ – you get no comeback
If your PPV TV operator’s systems go down during a film you’ve paid for, I’d assume they’d either refund your money, or let you start the viewing again
I think this is the same with the pay-for Web services model. I *still* wouldn’t trust someone else with my data (what if they lose all my mail? How my compensation would one get) – but I’d imagine they’d at least *try* to make it up. With a free Web app, you’d get nowt.
Just my 2ps worth
Regards
George
What about a “Give away the application, sell the backups” model? If you pay, you get access to an rsync server. The app hoster wouldn’t have to offer this service at the retail level — a customer could go to your local computer store and buy a boxed backup product that doesn’t just back up the local files, but is also bundled with keys to the popular ASP applications.
The reason *paying* for an online service is different than using an advertising support service, **even if the amount of income derived by the service is equal** is that, as a paying customer, you have a contractual agreement in place with the provider. You don’t have that on an advertising-supported service, and thus, bad things can happen and you have no recourse.
Don,
Very interesting idea..
-ian
John,
Who says a contractual agreement has to involve a exchange of money upfront? Indeed, when I got my Google account, I entered into a contractual agreement of sorts with them. Problem is, the current agreement says, in effect, “We reserve the right to lose your data etc.” Unless and until that changes, advertising supported software-as-a-service is dead in the water.
-ian
Perhaps advertising actually creates an incentive to provide a quality of service that good (enough) for the average joe.
I’d have thought that the average user would probably simply ‘wear’ 5 minutes of downtime from a for pay email provider and it would cost the provider nothing. At least in the advertising model it would also cost the provider 5 minutes worth of advertising revenue.
I suppose there would be a ‘premium’ market that would desire a high degree of surety and be prepared to pay for it but I’d expect that to be a relatively small part of the market.
For 99% of people I’d expect Google’s backups are going to be far more rigorous than if they were keeping their mail on their home PCs. To conclude that “advertising supported software-as-a-service is dead in the water” is silly because 99% of people don’t need such a high level of surety and as with pretty much any advertising supported product it is designed for the masses, not those with special needs.
We’re not talking about “five nines” here—we’re talking about accounts disappearing or becoming inaccessible. There’s a big difference. -ian
Google seems to be focusing the direction of their non-search solutions on tacit interactions between Google users in addition to the individualized, a la Yahoo portal, content. Taken to its logical conclusion, Google will probably end up acquiring or copycating something like iRadeon’s AppPortal, facing on-demand software vendors like Netsuite and Salesforce head on with an eye towards integrating intra-company search (and, of course, AdWord$) into the application mix. The implications of this strategic approach should be fairly scary for companies like Salesforce–ie, what if Google can pull off the same functionality but not charge any subscriber fees, simply making money off AdWords clicks? It’s quite possible.