Google unveils its cloud-based Apps Marketplace, wants 20% revenue share

Tuesday evening, during an event televised over YouTube called Google Campfire One, Google executives lifted the curtain on its cloud-based Apps Marketplace for PC-based applications, with the promise of opening its online store with 50 charter vendors later in the evening. The Marketplace is designed to feature applications that integrate with the company's existing Google Apps, Gmail, and other cloud-based services.

Google Vice President of Engineering Vic Gondotra told attendees at the company's headquarters that the company plans to utilize very simple terms of service. Think of a garden, but more with clearly marked paths as opposed to walls. Extending the concept of the Android Marketplace from handsets to computing devices, the company is inviting developers to build applications using its Studio tool, then deploy those apps by way of the Marketplace. Each developer is asked to pay a $100 sign-up fee, and then give Google a 20% revenue share for sales, at whatever price the developer charges. (We have not seen yet whether there will be a price cap.)

11:10 pm EST March 9, 2010 · "The Google Apps Marketplace...[is] a great way to discover, to find, and install applications into your business. But not just any applications -- applications that are deeply integrated with Google Apps...that enable a single sign-on, that enable different kinds of cloud-based software to share data," explained Vice President of Engineering Vic Gondotra to the Campfire One attendees. "Applications that integrate with the navigation, integrate with the user interface of the tools that your employees already know and love and use every day."

The integration Gondotra spoke of will take place through a relatively simple XML-based manifest, the typical length of which is promised to be not very long. An actual Google Apps manifest (not the abbreviated version used in Google's slides) is pictured below.

Each category in this manifest represents a point of integration with the Google Apps environment -- actually, with any online service that Google Apps is capable of reaching. Gmail is one of these places; tonight, the company's director of engineering, David Glaser, promised a theoretical level of integration with Gmail that would enable business apps developers to create Gmail plug-ins that would appear to match, or maybe rival, the functionality available in Microsoft Outlook.

Glaser demonstrated the creation of an app manifest, which would also contain the "pages" (actually resources identified with URLs) that link to Google Apps' various points of integration. Perhaps the one that will be most often used is single sign-on, which will enable the identity of the Google Apps user to be shared with that of the custom app. Through the OAuth-based authentication protocol Google will use, developers will be able to deploy databases for their cloud apps using their own clouds, if you will, and then let Google's authentication pass through to the developers' clouds to validate users and enable the granting of permissions.

Glaser outlined another point of connection: "If you've ever used Google Apps, you've noticed at the top left of the screen, right above your mail or your calendar, there's a nav bar. That means you're a click or two away from getting at any of the other apps in the Google Apps suite...Well, if you have an application, you probably want it to be a part of the same navigation model, part of the same nav bar, so your users are a click or two away from not only the built-in Google Apps, but also from your app. How do you do that? You put an entry in the manifest -- a few lines of XML, you tell us, 'Here's the string that I want to have show up in the menu, and here's the link that it should go to when somebody clicks on it.'"

The keyword here again from Google is "simple," which is what will distinguish its cloud-based apps ecosystem from Microsoft Windows Azure in almost every respect. An app in Google's environment would appear to be leveraged on an existing Google App or service. As Glaser explained, a custom app will have its own home page, if you will; but as Gondotra explained, what makes the app usable in the first place is its connectivity with the existing hub that Google has in place. So the development studio for such apps (itself a Web application, pictured above running in Firefox on Google's favorite PC operating system, Windows XP) is specifically geared to generate this manifest and plug apps into the existing hub.

That's not to say apps won't or can't stand alone on their own, or even pre-exist, as Gondotra told the audience: "We're not mandating that you have to build on a particular platform. You don't have to use App Engine, although we'd be delighted to see that. You may already have an existing app built on your own infrastructure, your own tools, your own hosting environment...It's very easy to integrate even that existing app into Google Apps."

The ability for apps to stand on their own was exemplified this evening by charter partner Intuit's first entry into the Marketplace. It showed an online payroll application for small business that enables office managers to keep track of employees' payrolls, using tools that are also integrated into Google Calendar. (It's hard not to notice that Google's app development platform runs on Firefox, while it prefers to run the apps themselves on Chrome.)

Among Google's list of 50 charter developers, we noted, was Zoho -- a company whose existing cloud-based apps had actually competed against Google Apps, while using many deployment resources actually created by Google.

The exact terms and conditions that apply to Google's developers' agreement -- a $100 one-time up-front fee to enroll per developer (not per app), and a 20% cut of the revenue -- are not known as of this evening. Vic Gondotra did say, however, that Google will enable online resellers to promote and sell apps from the Marketplace, with 20% of the cut from resold apps also going to Google and the rest to their developers.

"Remember, with that rev share, you not only get to reach the 25 million customers, but you also get to take advantage of over 1,000 resellers who are not only going to be able to resell Google Apps, but may, in fact, be able to drive business directly to you," stated Gondotra. He did not say whether this resale operation would actually take place as part of Google's existing advertising platform, which may be why the early number of resellers (one thousand) is so high.

A few years ago when Google premiered its online apps on a mostly free business model (with some subscription revenue attached for upper-level apps more recently), folks wondered how Google would turn this into a revenue center. Now we know the answer: The company wants to earn its cut not from its core apps, but from a substantial slice of your apps.