Google shopping for 'middle market' businesses to boost enterprise offerings

Dive Brief:

Google is looking to make strategic purchases in cloud and workplace applications, areas it sees as key to winning more enterprise customers, according to ReCode report.
The company is considering buying a number of companies that serve "middle-market" businesses, like automated app services company Metavine, Canadian e-commerce company Shopify and Namely, a payroll and health benefits services startup, to name a few.
Though it’s recently added some large customers, Google is still behind Amazon Web Services when it comes to cloud services.

Dive Insight:

Google declined to comment on any potential purchases, but expanding the company's cloud business has remained a priority for CEO Sundar Pichai. Google has also struggled to grow its workplace app, Google Apps for Work.

According to a recent study by BetterCloud, companies that move to Office 365 are about four times larger than those that use Google Apps for Work and have IT teams that are five times larger.

Google hopes to boost its reach into mid-market companies by tackling what it sees as the two biggest roadblocks to businesses: customer enterprise agreements and the challenge associated with changing from old software to a new service. In October, Google tried to lure companies with 3,000 employees or fewer away from competing platforms by paying them $25 per user.

Google is also working to better compete with Amazon and Microsoft on enterprise cloud services. Last week, according to a CRN report, Apple signed on to become a Google cloud customer late last year, and has quietly been moving away from Amazon Web Services.

Google executives have reported that Apple is spending between $400 million and $600 million on Google Cloud platform, according to CRN. Though that could not be independently confirmed, however. Taking on Apple as a customer would give Google’s reputation as a distant-third player in the cloud business a huge boost. But AWS may still be tough to catch. Last quarter, AWS sales were up 69% year over year and generated $2.4 billion in one quarter alone.