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What the Google Hangouts API Shutdown Means

By Special Guest
Eric Shashoua
February 06, 2017

Google’s in an interesting place with Hangouts and chat with both the enterprise and the consumer. One thing is clear - what it’s doing with Hangouts is entirely driven by what’s happening in the rest of the industry with chat, and Google’s very public strategy around consumer and enterprise adoption.

So what does this all mean? 

1.     Hangouts was intended as Google’s chat app for everything.

Hangouts was launched in 2013 to replace its aging Google Talk and Google+ Messenger apps. Since then, it’s become lackluster. Even on Android users prefer WhatsApp, Facebook Messenger, Viber, WeChat, and Line, in that order. Hangouts’ only real success has been in enterprise.

But it’s embattled. Slack has risen like a meteor. Microsoft, Facebook, and now WhatsApp have rushed in to develop Slack-killers. Meanwhile, Hangouts’ growth has likely either stalled or is in decline.

2.               Google’s made a big play in consumer chat, with Allo

It’s clearly advantageous for Google to remain relevant with chat on all devices. Hangouts has failed with the consumer. Its brand is now stale, so even with the addition of great features, it would still be hard to get real buy-in from users. So Google launched Allo - a major signal of its interest here. After replacing Hangouts very publicly in its last keynote, it’s got something fresh and new, and did so with the AI prowess that’s become part of its brand (search, self-driving cars, Google Now, Google Home, Nest’s learning thermostat).

It remains to be seen if Allo will succeed.

It’s gotten a lot of media attention for its over 10M downloads by December, but downloads don’t really reflect usage. Path showed us that - its apparent rise was only skin-deep.

3.               Enterprise is huge for Google. That’s Hangouts. But it’s stalled.

Google’s very actively and publicly pushing into enterprise in every way it can. It rebranded Google Apps as G Suite in the fall. It’s marketing it heavily. It’s had extremely rapid growth through resellers, which has made it a small but very real emergent threat against Microsoft.

Many of Microsoft’s recent moves can even be seen in light of a defensive play against G Suite.

It suddenly embraced other OSes with quality versions of Office. It rushed to get out quality apps on mobile. Outlook got a “focus” view to filter the noise of email like Gmail can. Office 365 allowed it to be accessible on Chromebooks, which are growing in education. Students have always been treated by Microsoft as a harbinger of future trends.

4.               So, why on earth abandon Hangouts’ API?

Google immediately reassured users after its Allo launch that it’s not abandoning Hangouts. It’d be counter to Google’s entire enterprise strategy to abandon enterprise chat. But Google shutting off the Hangouts API is consistent with its treatment of Hangouts in the past 18 months. It’s been put in maintenance mode, with no major updates in the past 18 months, and shutting down its API means developers are being pulled from it.

5.               What Google’s really doing here.

Just like with the consumer, Hangouts’ is stale in enterprise. It can’t reinvent itself any more than MSN Messenger could. As with Allo, shutting off the Hangouts API is likely a sign that Google’s working on something new.

It’ll likely do this in one of two ways.

It can take a consumer/enterprise approach like it’s done for nearly every product it’s ever released - grow with the consumer, then give the same product to enterprise (Gmail, Google Docs, Sheets, Slides, Forms, even Youtube). This would mean Allo, but this likely depends on Allo’s adoption in enterprise, which so far looks tepid.

Otherwise, Google’s other option is to release a new chat application that’s aimed solely at them enterprise.

But it’s very likely to make a major play here.

At this week’s All About the API event collocated with ITEXPO in Fort Lauderdale, Grace Schroeder. CEO and Founder of  Idea2, Ltd. will present a session to review all the popular tools like Slack and Google and how APIs can help to improve productivity by sharing data between systems. 

Eric Shashoua is the CEO and Founder of Kiwi for Gmail.

Edited by Stefania Viscusi
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