Google Wins Biggest Enterprise Deal as Spain’s BBVA Cuts Costs

By Manuel Baigorri - Jan 11, 2012 1:00 PM GMT+0700

Google Inc. (GOOG) won its largest enterprise contract ever from Spanish bank Banco Bilbao Vizcaya Argentaria SA (BBVA) as the owner of the world’s most popular Web search engine tries to win business clients from Microsoft Corp. (MSFT)

About 110,000 employees in more than 26 countries at Spain’s second-largest lender will start using the Google Apps offering which includes e-mail service Gmail, time-management tool Calendar, data-storage service Docs and Website-creation program Sites, the companies said.

“We are confident we can have more and more larger companies from all over the world because of the benefits we are bringing,” Sebastien Marotte, Google Enterprise vice president for Europe, said in an interview in Madrid. BBVA picked Google over other systems because of a better price, security and experience in the market, said Carmen Lopez, director for BBVA’s Innovation Observatory.

Google, grappling with slowing growth from its traditional online advertising business, is stepping up competition with Microsoft by selling business software as an alternative to Office programs. Google’s programs are accessed through the Web, just as its search engine is. Spanish companies such as Bilbao, northern-Spain-based BBVA need to cut costs and improve productivity amid a weakening economy with the highest unemployment rate in the European Union.

Customers at average often save about 50 to 70 percent compared to their previous software solutions as Mountain View, California-based Google only charges for the specific programs used by a client, Marotte said.

Both companies declined to give a value for the deal. Google said the agreement is its biggest enterprise contract win so far based on the number of users. A BBVA spokesman said the contract initially runs for one year and will be automatically renewed until one of the partners wants to end it.

Luring New Clients

Google Enterprise, which was created seven years ago to deliver Google products to the enterprise world, has now 4 million companies as customers and 5,000 new clients adopt the technology every day, according to Marotte. Existing clients include carmaker Jaguar Land Rover, the University of Washington and the City of Los Angeles.

“Our main goal is to promote innovation and improve our employees’ efficiency and productivity,” Lopez said. “We live in a very competitive and fast-changing environment and we want to operate in a faster and more collaborative way.”

BBVA’s operating costs rose 9.9 percent in the first nine months of 2011 from the same period a year earlier.

Spanish Prime Minister Mariano Rajoy announced last month 14.9 billion euros ($19 billion) of spending cuts and tax increases as public finances were in worse shape than the previous government and the EU had expected.

To contact the reporter on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net