While Google is a large multi-billion dollar company, sometimes it acts like a small firm with new initiatives. Its Android operating system powers over 80% of all smartphones; that’s about 56% of all mobile phones worldwide – nearly 1.5 billion devices! Its search engine may be so ubiquitous that its name has become a popular verb, but Google is still not afraid to branch out. Two examples worth noting are Google Fiber and Google Fi service. These initiatives help to make Google’s online services work better and drive more revenue to its bottom line. And, enterprises can also benefit from lower prices.
Despite media hype, Google Fiber has only 30,000 total video subscribers in Kansas City, Provo City, Utah and Stanford. While Google’s reach is expected to grow as it plans to roll out the service in 18 new cities including Atlanta, Nashville, and Austin, it will still be a small player in this market.
On the surface, it would appear that Google’s limited geographic roll-out of 1-gigabit-per-second broadband service couldn’t possibly affect most enterprises, but it already has. By directly supplying gigabit service in a handful of metropolitan areas, Google is pushing incumbent broadband providers to offer faster service. Most important, the upgrades are not limited to areas where Google is directly operating its service. Comcast and AT&T are now promising to offer gigabit speeds in cities where Google isn’t competing.
Google Fi is a MVNO (mobile virtual network operator) service where subscribers can buy a contract from Google to have voice, messaging, and a set limit of data per month, starting at $30. And, Google will refund unused data by rolling it into the next month’s allotment. Most enterprises are unlikely to use this service which relies on public hot spots that are not secure, but the service will pressure larger firms to offer more economic plans to compete.
Google Fi, like Google Fiber, is helping to provide users with more bandwidth at faster speeds and lower costs. Verizon reported a 50% increase in data use per device in the last quarter, but its revenue per device is falling. This is having a deflationary impact on telecom costs for enterprises. While these two initiatives from Google are small, the effect is large because competitors know that Google can invest more resources to disrupt the market – as it did with the Android operating system. Expect cost to only further deflate as Google continues reaching into markets and injecting fresh competition into the marketplace.