Search and online advertising offer limited upside for Google at this point. Sure, they can still contribute significantly to Wall Street’s expectations, but they won’t be sufficient to fuel the sort of growth Google needs to maintain the reputation it’s developed over the past decade. The company’s expansion into personal and enterprise applications shows that there’s a need for new revenue streams. This is the impetus for Google products that could wind up replacing some segments of the market where IT VARs operate.

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Being able to touch something isn’t as important as it used to be, and the ability to maintain control has declined in importance. Instead, IT departments are watching total cost of ownership and return on investment. Obviously, lower cost solutions favor these metrics. Cloud computing, software-as-a-service and other hosted and managed solutions are entering the IT cultural lexicon … and the attendant budgets and data centers. Google makes it easy to adopt, implement and afford its “nebulous” solutions. And, as long as they work as planned (which is most of the time), it’s easy for an IT department to be happy. When something goes wrong, though, remember that the Google organization and operation is not designed for support.

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It’s easy not to see Google as a competitor. First, the company’s major operations – search and ads – don’t really interfere with what VARs are doing, namely selling and implementing IT solutions. Also, Google isn’t entering the VAR space, so again, it doesn’t look like a competitor. The problem is more difficult to detect: Google is slowly trying to replace certain parts of the IT market. Enterprise use of its Gmail service, for example, replaces the opportunity to sell mailserver solutions. The problem isn’t widespread yet, but now is the time to watch Google’s moves and determine the impact to your business.

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Google is starting to edge its way into what would normally be considered the traditional IT business. It’s delivering both personal and enterprise applications, from office productivity to e-mail to data storage. And, it’s generally charging very little or nothing at all. For small businesses especially, Google is making a variety of IT options available at extremely low prices. If this trend continues, Google could begin to erode the markets that currently belong to traditional IT manufacturers and value-added resellers.

This week, we’re running a series on the enter:marketing blog  – Five Reasons to Watch Google in 2010. Stop by every day to learn how the search engine giant is moving into other aspects of the IT industry … and how this can affect your business. To discuss ways to bolster your competitive strategy in regards to this challenge, please contact us today (opens an e-mail message).

Click here for a page to bookmark for the “Five Reasons to Watch Google in 2010″ series >>

The financial news has been great for serving up one dismal story after another. Consumers aren’t spending – which affects everyone – and unemployment’s at its highest point in more than a quarter of a century. If you follow this stuff too closely, you might miss the trend that matters most: IT spending is going up.

After two years of clamping down on technology budgets, businesses are investing in both software and infrastructure. Much of this is for “must-have” projects still, a side-effect of delaying upgrades and migrations because of market conditions. Look closely, though, and you’ll find a hidden opportunity for future account growth.

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IT manufacturers and resellers have been looking into social media marketing, unsure of whether there’s an ROI case in it but understanding that eventually they’ll need to make the plunge. Well, an announcement by Dell yesterday shows that you should explore social media marketing … for all the right reasons.

Dell says that it has generated more than $6.5 million in sales via Twitter alone. The company’s broader social media presence – which includes Facebook, LinkedIn and YouTube – has more than 3 million members, according to Manish Mehta, vice president of social media and community for Dell.

Let’s be realistic: $6.5 million is a drop in the bucket for Dell. At the same time, social media is but one part of its overall marketing strategy. So, it looks as though the return Dell has generated is at least close to proportional.

So, we should all rush over to Twitter and get started, right?

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If you aren’t thinking about cloud computing yet, it’s time for you to start. Now. Seriously. Sure, there’s been a lot of buzz around this for a while, and IT buyers are starting to buy into cloud computing services (especially in the small and medium-sized business segment). Services are popping up from some of the strongest brands in the IT industry, including EMC’s cloud-optimized storage, VMWare’s vCloud and Cisco’s cloud computing overlay for unified service delivery. But, the most interesting indicator of cloud adoption is that IT departments are hiring for it.

Your clients are so committed to exploring cloud computing that they are adding to their departments – in a tough market. According to a report by InfoWorld, mentions of “cloud computing” in job posts on Indeed.com are up 350,000 percent since January 2008.

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Forrester Research offers a pretty grim assessment of the future of social media marketing on its blog: Though social networks are the “future of online life,” James Kobielus writes, we could reach a point where “social network analysis – automatic, real-time, effective – will become too popular.” Everyone will wind up scouring social networks for business opportunities and crunching the same commodity analytics from platforms such as LinkedIn and Facebook. The competitive edge, effectively disappears.

Well, the reality is a bit more complicated than the eventual degradation of social media’s value. As these platforms continue to gain adoption, especially as marketing platforms, look for the following to emerge. Look for three IT market drivers that will come from the ubiquity of social media marketing.

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IT buyers are spending more … but they’re looking for a faster and greater return. Virtualization is among the technologies at the top of the list for IT investment right now – given the strong ROI case that it usually entails – along with unified communications and video conferencing.

A new study from IT information service TheInfoPro indicates that 30 percent of IT decision makers are planning to increase technology spending next year, with only 22 percent going in the other direction.

The key is to be able to demonstrate a powerful ROI case with benefits that can be realized quickly. Expect to see high-impacts on the agendas of IT buyers next year … after two years of constrained budget.

Tell a prospect that he needs virtualization, and he’ll ask why. Ask him how he plans to cut costs and increase IT operational efficiency, however, and he’ll invite your ideas. IT manufacturers and resellers spend far too much time pitching systems, and not nearly enough time understanding their clients’ businesses. The latter is what leads to near-term sales and long-term relationships … not to mention referenceable projects and referrals.

Don’t think about selling technology – that’s what your competitors do. Instead, become a true “solution provider.” Take a consultative approach through the sales process. Work with your clients to understand the business problems they face, and you’ll have the opportunity to develop and implement technology solutions that solve problems inside and outside the datacenter. The key is to get as specific as possible and show how the pain can be alleviated in a manner that improves the business operation while reducing costs or increasing revenue.

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