May 1, 2008 1:55 PM PDT

The IBM-Google connection

Posted by Dan Farber

LOS ANGELES--Google Chief Executive Eric Schmidt gave a speech and chatted with IBM's CEO Sam Palmisano onstage Thursday at IBM's Business Partner Leadership Conference here. The two talked up their relationship, which primarily involves a joint research project. In October, Google and IBM announced a cloud computing initiative, based on Google's expertise in distributed, parallel computing and IBM's industrial enterprise management technologies, for public use by universities.

IBM is taking some of the learnings from the project and plans to operate a cloud that will allow partners to house their Web-based applications and sell them to customers, Palmisano said. "It is the first time we have taken something from the consumer arena and applied it to the enterprise," he said.

Google CEO Eric Schmidt joins hands with IBM CEO Sam Palmisano.

(Credit: Dan Farber/CNET News.com)

Schmidt said that over time there won't be much differentiation between consumer and enterprise architectures. The major difference is that enterprise customers will pay for software and services, with required security and other features, and consumers won't.

Schmidt gave IBM lots of credit for pioneering many of the technologies that underlie today's computing architectures. He noted that IBM, which has about 87 years on Google, has figured out that the underlying platform is a server and Web services.

"Cloud computing is the story of our lifetime," Schmidt said. "Eventually all devices will be on the network." Both IBM and Google, and a host of competitors, have the same idea, which was actually first promoted by Sun with its "the network is the computer" slogan. Google figured out how to monetize the fruits of the pages its massively parallel servers manage.

IBM wants to provide the infrastructure and support services to the planet, and Google wants to provide the world's information, and some applications, on its platform. "The two companies are great and have lots of innovation in their gene pool," Palmisano said. "There isn't a lot of overlap in the strategies." Both are committed to open standards and an open Internet, and they are both going in the same direction, he added.

Google's YouTube captures 10 hours of video every 60 seconds, and IBM might like that business if it could figure out how to make money at it. But eventually, IBM, Microsoft, Sun, Google, and other big players will look more similar in their technical architectures and business models.

Google and IBM have more in common than a shared view of the world and an academic research project. It turns out that Google outsources its accounting to IBM and that Schmidt considers IBM's sales organization important to Google's enterprise software efforts.

As more companies look for Web-based tools, mashups, and standard applications, such as word processors, Google stands to benefit. "IBM is one of the key planks of our strategy--otherwise we couldn't reach enterprise customers," Schmidt said.

While IBM isn't selling directly for Google in the enterprise, IBM's software division and business partners are integrating Google applications and widgets into custom software solutions based on IBM's development framework. The "business context" is the secret of the Google and IBM collaboration, Schmidt said. Embedding Google Gadgets in business applications, that can work on any device, is a common theme for both Google and IBM.

Currently, Salesforce.com is selling Google Apps as an integrated part of its platform. It's not far-fetched to think that Google would seek out IBM's help with its business partners to spread the Google word in the enterprise.