Sunday, May 31, 2009

Business Opportunities around Google Wave

How could you build a business with the newly announced Google Wave?

Wave is like email mixed with collaborative editing and instant messaging. It's conceivable that the Google Wave paradigm will replace today's group collaboration tools with something less fractured (everything's in one place), universal (document equals IM equals email) and more centralized (one application instead of many). Heck, it could even replace email itself.

What's most exciting, though, is that Google Wave will be open source. Unlike with Google Apps, you'll be able to look inside the box, deploy your own servers, customize, and extend.

Let's say that Google will be able to pull this off, and soon after launch, Wave has millions of users. What business opportunities exist around Google Wave? What can startups, software vendors, and consulting companies offer that could be profitable? Here are a couple of ideas,. I've rated them 1-5 stars based on how promising I think they are.

Migration Tools and Services

Companies today use Outlook and Exchange. If Wave is good enough, some of today's users of Outlook, Exchange, Notes, or even SharePoint could be convinced to switch, either in whole or just for a part of their workflow. Third parties could offer migration tools and services that allow companies to get started and port their existing data - Terabytes of emails and documents - into Google Wave.

Verdict: I think this could be a reasonable play for small service providers and ISVs, provided that Wave is convincing enough for companies. For highly customized Exchange installations, there's no one-size-fits-all approach, so there's a lot of room for service providers and tailored solutions. No billion dollar opportunity here, though.


Enterprise Wave

The key to making organizations switch to Google Wave is to make it sufficiently full featured for enterprise use. In particular, it's hard to see anyone switching from Outlook without tightly integrated group calendaring, task lists, and mobile sync. Since Wave is open source, you could add those in and sell an "enterprise version" of Wave under your own brand.

Verdict: This could work. Google doesn't have a stellar record in catering to enterprises. Compare the measly 10 million hosted Gmail accounts with the 40 million paid Zimbra accounts out there. Google is better with consumers, and might leave a lot of room for an enterprise version of Wave built by a third party. Played well, this is a billion-dollar opportunity.



There is no shortage of plugins, extensions, and add-ins to Microsoft Outlook: Think Xobni, Gwabbit, ClearContext, and many little helpers that can you extract attachments, schedule emails, or remove duplicate contacts. Some of these tools are highly profitable paid extensions, and it's conceivable that you could build and charge for extensions that add useful features to Google Wave.

Verdict: As a business, this isn't promising, at least for the next few years. What makes building Outlook plugins so attractive is the size of the target market - 400 million users. It took Gmail 5 years to get to around 150 million users, and I expect the adoption curve to be similar for Google Wave. It's conceivable that Google Wave will one day add a "Google Wave App Store", where users can buy extensions and themes for cash. If that happens, this becomes much more exciting.



Since Google Wave is open source, you can host the server on your own hardware. There's no shortage of hosted Exchange providers - a quick search will give you many offerings that will give you an exchange account for $9.95 a month. Similarly, you could host Google Wave accounts for a fee - similar to Acme Wave in the keynote demo (1h:06).

Verdict: Could this work? It depends on what Google will offer for free. My guess is that Google Wave will start as another piece of Google Apps, where it's $50/user account/year, with plenty of space. In hosting, Google has economies of scale - noone runs more servers more cheaply. So forget beating Google on price. Thus, the target market is be reduced to the segment of users that wouldn't trust Google with their data. That segment is pretty small.


Wave as a Feature

I imagine that this will be the most common type of use for Google Wave. Once it's released, websites will replace systems for commenting and user-generated content (e.g. restaurant reviews) with Google Wave. I imagine this to be much like the Google Wave inside Orkut, shown in the keynote at 0h:24. Integrating Google Wave can be useful for certain type of sites - think Yelp, Foodoro, Divvyshot, or RetailMeNot.

Verdict: This is not a business by itself. It's something that could improve your existing offering, much like using Disqus will increase the quality and number of comments on your page. I can imagine scenarios in which having Google Wave on your site would improve its quality, thus leading more traffic, which in turn gives you more Pro account signups, ad clicks, etc.


Forgot Something?

As you may have noticed, most of my examples in here come from my understanding of the Microsoft Exchange and Gmail ecosystems. Due to my email-heavy background, I've approached this from an email-centric perspective.

You may also have noticed that there's no five-star idea so far. If you have one, let me know or leave a comment below!

Update: Seems like I forgot one very promising idea: An App Store for Google Wave


Prakash S said...

Here's a contrarian view: I see the same kind of initial enthusiasm as I first saw with the RSS wave. RSS client apps, web-based apps, enterprise apps, email integration, intermediate/proxy services, etc.

Depending on your initial expectations, how did that turn out?

Gabor said...

Well, today almost everything has an Atom or RSS feed, so I think it's been pretty successful as a protocol. It has surpassed my expecations (which were low to begin with).

Google Wave is a protocol, a server, and client software (mobile + web), so it's a different kind of animal.

It is in fact hard to judge what the adoption curve will look like once it's out: Will it be geometric, or bump-then-flat? I'd say there's a fair chance that this may take off.

Portal Shops said...

Good prediction about google wave. I think you dug it right on the spot. I was thinking about data importation services to import data from outlook, other online accounts like yaoo and MSNto google wave centralizing communication. Also small communication plug-ins for website owners to have real time communication with their clients

Prakash S said...

Interesting, I had high expectations from RSS, I thought there would be many more interesting applications, variants and services around it.

I have low expectations with Google Wave, my first reaction was "architecture astronauts" :-)

This would be a good one to revisit a few years hence to figure out how it all turns out, adoption, et. all.

Anonymous said...

You forgot Agents & Information sources or sinks.

I mean any kind of automated agent that can read waves (or other sources), aggregate, filter and analyze data and provide richer data as an output.

The wave protocol can be much more than just human-to-human conversations. It can be the fabric that ties together independent services that create and consume self-described (from XML to semantic RDF) data.

Hashim said...

Because of the way Google plans to outsource and federate Wave, there is no way for one company to make a billion dollars from it. Instead, many companies have a chance to make smaller amounts, like they currently do with email and rss.

My business idea for Wave - if there is no whitelisting by default expect a spam detector to be popular. If there is whitelisting, expect to set itself up as a gateway for marketers to reach consumers.

Xico Vatsão said...

A followup on kittenlulu's point on "Agents & Information sources or sinks".

kittenlulu mentions automated agents reading & distilling wave contents. ... I think instead great value will come from automated systems interacting in waves with humans. Automated systems (order processing, systems monitoring, CRM, etc.) will initiate waves, humans will annotate the waves and do what only humans can do, and will notify automated systems on progress & special action required according to human judgments. Waves will consolidate the tricky interaction between automated systems and people. All kinds of specialized human/automated-system consoles and web interfaces could be replaced with wave-based tech.

Carl Putscher said...

You reference an App Store to be provided by Google but I think that providing the app store is itself a business opportunity you missed.

I believe any organization could provide storefront and hosting for Google Wave robots and extensions.

Brett Morgan said...

Most of my ideas are centered on the basis of Wave being a near real time change management protocol. Thus I can see it being the basis of CMS systems, of CDN update systems, of code collaboration projects. Heck, pretty much everything bar email.

Gabor said...

kittenlulu - I could see Agents being popular, but what would the business model be? Sell them on some sort of App Store?

Hashim - I'm not so sure. Email is mostly based on open protocols, yet Outlook is making a billion dollars off of it.

Can you elaborate on your "gateway for marketers to reach consumers" idea?

Carl Putscher: That's a fantastic idea - interesting that I didn't think of it! I'll add that to the main article.

Anonymous said...

If a company was to create any specialized apps, robots and what have you, they could plug these into an app store and recover development cost and maybe make a profit!

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MDA said...

The Wave really seems like the next best thing and has more promise than most new tech out there. The possibilities of this for collaboration are amazing. What I see being a problem for business is IE and its non-support of HTML 5. IE may continue to cripple the web and until they support HTML 5 the reach of the Wave will be somewhat limited.

Anonymous said...

How is using robots on wave any different to using them on IM? In fact, how is wave much different to IM; It looks like kind of a real-time forum, with a dynamic contact list ("social network") attached.
The technology (command transformation) is pretty neat though, and I could see this applicable in many other fields, eg patching code.

Xico Vatsão said...

@Anonymous with the "How is using robots on wave any different to using them on IM?" question ...

An IM session is a single stream of stand-alone un-editable messages written by and shared between two or more participants. You can review the logs of an IM session after-the-fact but can't go back and edit old comments.

A robot participating in IM can only ever review past content & contribute new messages at the tail of an IM stream.

A wave adds to IM aspects of Wiki, e-mail, threaded discussion **trees** (not a linear list of messages), private/restricted/secured content, and version control.

I imagine a robot participating in a wave can interact with human participants, and using controls/gadgets we could see a flow like this: (a) robot renders current state of some system within the wave (text and/or graphics) at the "top level" of the wave; (b) humans view the robot's periodic updates and may at some point decide to discuss a situation that needs resolution ... usually this would be done VIA e-mail or in some help-desk application -- with Google Wave the humans discuss the situation IN THE CONTEXT OF THE WAVE ... so the data that led to the discussion and the discussion ARE IN THE SAME PLACE -- this is valuable; (c) humans might document their resolution of the situation in the Wave, or else tell the robot via interaction with embedded controls/gadgets to perform some action; (d) someone doing a post-mortem and auditing staff or trying to understand their system better can always go back and re-play the wave, see what the robot did and how the humans reacted.

A stupid example contrasting IM-only and wave-enabled robot/human interaction ...

Maybe you're running an EC2 Amazon application and have some monitoring software that alerts you when load on your current 3 nodes is too high. The monitoring robot can send the admin a wave with graphs on current trends. The admin could invite a more experienced admin into the wave and discuss current trends they each can see developing live. The decide in their side-discussion to up the node count to 5 from 3. They interact with some control/gadget in the wave telling the robot to increase node count from 3 to 5. Problem resolved, and the problem precursors, human discussion, and history are all contained in a single place.

In his weekly report (in a separate wave) the new admin can link to the report using the wiki-like features of Wave.

Random Surfer said... is going to be the Open Community of Google Wave -follow me to stay tuned

Sean T said...
This comment has been removed by the author.
Sean T said...

The concept of selling apps is not really viable.

An app has to be available to all participants of a Wave. Once one participant adds it to a Wave, everyone in that Wave receives it. If someone uses it for a different Wave the app you sold could be used worldwide in no time flat (6 degrees of separation).

I believe the big money will be made in consumer product enhancement. This will include:

Home automation - Talk about an easy format to make smart homes. Your house would have it's own wave address. Each item you own would have one as well. Just add the item to a wave and it would streamline the networking. For example, if you are at work, your house temperature may be 80 degrees. Your system know that it takes 12 minutes to bring the temperature to 70. When you are on your way home, your smartphone Waves your house that you are 12 minutes from home (using GPS, speed and road reports). Your home is perfect when you get there.

Vehicle service reports - Your car will Wave the manufacturer with problems, software updates on the fly, your local garage will be privy to all info. If your car is stolen, it could be disabled by the manufacturer.

PVRs: Your Tivo will have an address so you can set your pvr to record a show from a wave. A friend could recomend a show and it would automatically record leaving it up to you to decide if you want to watch it.

Clothes: Yes believe it or not clothes could benifit from the Wave Each item you have would have an RFID tag. When you bring your suit to the dry cleaner, the cleaner would scan it. You now know where your suit is. The cleaner also knows who's suit it is. As it goes throught the stages of cleaning it would be tracked. You could instantly know that it is being pressed. When it is finished you would be instantly notified. The information would be sent to a "Don't Forget the Milk" style program which would remind you to pick it up when you are near the cleaner.

The uses are going to be limitless. If the wave lasts for 40 years like email has, we will not be able to comprehend what we will be doing with it before someone comes up with a new standard.

Sean T said...

I stand corrected. Apparently there is 2 states for an API, purchased & unpurchased.

Dark Orbit said...

I read the whole post and all of the comments. I think this is an excellent page and wanted to add my 2 cents.

For those that think Google will not work, just think about their reach no in the market place. As long as the product, WAVe, is user-friendly and incorporates many of the widely use features of other applications, it can expect it to be a big hit.

I think most of these ideas if done correctly can make a lot of money.

I can see new dating sites, review sites, travel sites, and social sites being born out of WAVE or incorporating WAVE into their structure.

Richard Volpato said...

Hi. Great post and interesting comments. One more vector of innovation in Waves orthogonal to gadgets/robots relates to themes & filters. Just as Wordpress has a vast ecology of 'themes' Waves will too. Except in the case of Waves, it is not simply 'styling'. There are many information architectures that might mobilized to enable users to see slices, summaries, contrasts, facets, peak points, -- in short, all kinds of dissections of the tree structure of the Wave. There may well be 'killer apps' lurking in on interface side of things.

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Nida Rafiq said...

Google Wave is still a developers preview and not yet available in the market. Being an open source application, it may lead to many complexities and only simplest survives on the web. It will still take a long time for Google Wave to handle the complex business communications.
Colayer, the pure web application is based on the similar concepts as Google Wave and is serving the enterprises since years.

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Anonymous said...

Today every one is using email as a communication & collaboration media. Google wave is the future & it will replace email. Contextualization is strength of google wave. and also many more features as shown in video. But imagine is google wave is used for a company with 100 employees, what will happen ? there are thousands of new wave created. Which will result in mess. How to find out latest relevant information? There should be a powerful way to get latest update, I wave is missing this. Its all same like the current email system.So for business point of view it like email with more features.... . Googlw wave provides cool features mostly from social point of view. Like Gmial.How many companies are there using gmail as there company account ? So same thing will happen with google wave ..

Google Wave said...

Have you guys checked Google Wave Business Opportunities in Google Wave Community ?

Anonymous said...

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Itai Frenkel said...

One of the money maker from Google Wave would be Google Search. Google Wave would have a better search experience.Google Wave provides context to Youtube videos. Google Wave enables real time search updates. Google Wave enables personalized search.

Anonymous said...

It looks like a framework to create very much of what Facebook currently offers. However, I suspect with the jump start FB has in this area, Wave would be an excellent method in which Google could attempt to purchase FB and gradually integrate it into the their own framework/fold.

Paramendra Bhagat said...

Well. Whatever happened to Google Wave? I was all ears.

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