Trend: Google is moving into enterprise software. Companies like Microsoft, IBM, and Oracle cannot ignore their most recent move.
Bill Burnham at Burnham's Beat discusses Google's July 9 purchase of Postini for $625M in cash. Excerpts below.
Google is definitely going after Microsoft's Exchange franchise. With the addition of Postini, if they just add push e-mail support and an off-line client, GMail will basically be as good, if not better than Exchange.
This is not good news for other anti-spam companies, especially if GOOG decides to offer Postini's basic anti-spam services for free.
If you look at Google's recent enterprise oriented acquisitions they are building a pretty compelling set of hosted applications. Not only do they have e-mail covered but they have the big three productivity apps (word processor, spreadsheet, presentation) covered as well. They also added in Wiki capability (via JotSpot). To link all this together all they need is a hosted file server and integrated search across all these apps (basically a hosted version of Google Desktop). That's a pretty powerful suite of services.
Google not only can afford to pay more for companies, it does pay more. Google's competitors simply can't compete with Google's prodigious cash flow, multiples, and willingness to take dilution. Google not only pays more, but is perceived as a better place to work by most targets. Thus, the management team is happy to support a Google deal because they know their team will be happy. This does not bode well in the short term for Google's competitors.