‘We’re dead serious about the cloud,’ says Google

  • Playing catch-up, Google is aggressively chasing the enterprise market
  • Analyst say it’s an uphill battle, despite new customer wins
‘We’re dead serious about the cloud,’ says Google

 
AT the inaugural Google Cloud Platform Global User Conference 2016 (GCP 2016) kicks off here in San Francisco, one thing is clear: The tech giant is “dead serious” – its own words – about its cloud business.
 
Speaking at a press conference following the morning’s keynote address, Google Inc’s newly-minted cloud chief Diane Greene (pic above) stressed that the company is in the cloud business for the long haul, and is dedicated to powering the world’s largest enterprises’ IT infrastructure.
 
“We are dead serious about this business,” she retorted to a question from a reporter on whether it was serious about making money with the Google Cloud Platform (GCP).
 
“We could not scale up [the way we do] if we were losing money, so this is a real business for us. The cloud is a long-term business for us here at Alphabet Inc,” she added, referring to Google’s parent company.
 
Greene cofounded VMware 1998 with her husband Mendel Rosenblum, and pioneered one of the industry’s biggest technology shifts: Virtualisation.
 
Virtualisation allows computer servers to run multiple operating systems, and makes it easier to pool computing resources so that applications can reside on multiple servers, and not just a single one.
 
In 2012, Greene joined the board of directors of Google and at the same time founded a new startup called Bebob, a cloud business applications company. Bebop was sold to Google for US$380 million last November. There are no details available on what Bebop does exactly.
 
It was through this acquisition that Google snared Greene and subsequently appointed her senior vice president in charge of GCP, in which her role is to spearhead Google’s foray into the cloud by targeting large enterprises.
 
Reinforcing her view that Google was serious about its enterprise business was Greene’s predecessor and Google’s infrastructure chief Urs Hölzle (pic below), who said that GCP is the fastest growing division within Google.
 

‘We’re dead serious about the cloud,’ says Google

 
“I’ve been publicly quoted as saying before that I believe the cloud will be bigger than our advertising business one day, and I say it again today,” said the CGP senior vice president.
 
“The revenue of IT services as a whole has the potential to be bigger than [Google’s] advertising [business],” he added.
 
In that, Google’s belief matches its cloud rival Amazon Web Services Inc (AWS), whose own cloud chief Andy Jassy had also said in 2014 that the cloud business could potentially eclipse Amazon.com Inc’s US$70-billion retail and e-commerce business.
 
GCP 2016 is Google’s first global conference specifically for its cloud business. Last year, the Mountain View, California-based company had hosted seven ‘mini’ cloud conferences in various cities.
 
Traditionally, its flagship Google I/O conference is held in May, and focuses more on technical sessions for software developers.
 
Ten years ago, Google was one of the early leaders in developing cloud technology but the company did so out of the need to support its own core search and advertising business.

Much of its learnings and experience was confined to internal usage, as the company was not developing its cloud technology to serve and sell to enterprises as an Infrastructure-as-a-Service (IaaS) player.
 
During that same period however, AWS went the opposite direction and began developing the cloud as a means to lease computing resources over the Internet, and has since become the market leader.
 
The No 2 player is Microsoft Corp, whose cloud business is also on the rise, according to research firm Gartner.
 
AWS and Microsoft are now approaching an annual revenue run rate of US$10 billion in revenue each, dwarfing what Goldman Sachs estimates was Google’s cloud revenue last year: A mere US$400 million, according to tech blog Re/code.
 
Why bet on Google
 

‘We’re dead serious about the cloud,’ says Google

 
Cognisant of this fact, all ears were trained on what Google executives would have to say at GCP 2016. On the first day, they were busy trying to convince partners, developers, analysts and the media of the fact that Google is now ready for enterprise prime time.
 
In her keynote address, Greene outlined three reasons as to why enterprises should bank on Google as their cloud provider: Better value, reduced risks, and continued access to innovation.
 
“Our cloud is faster from the disks to the processors, to the time it takes to bring out a virtual machine,” she claimed.
 
“And we’re delivering on that performance with the most competitive pricing.
 
“We can reduce risk because we’ve been in the crosshairs of all the best hackers in the world. And our customers have benefited from our innovation in our automated IT model, ‘NoOps’,” she added.
 
NoOps (no operations) is the concept of an IT environment that is so automated and abstracted from the underlying infrastructure that there is no need for a dedicated team to manage software inhouse.
 
Customer wins
 

‘We’re dead serious about the cloud,’ says Google

 
Google had announced a series of customer wins last year. This year, even higher-profile customers were added to the list, including Lloyds Banking Group Plc, Spotify Ltd, and most recently, Apple Inc.
 
At GCP 2016, the company further introduced The Coca-Cola Company and Disney Consumer Products Interactive Media as new customers.
 
According to Spotify (pic above) vice president of engineering Nicholas Harteau, the Swedish music streaming provider chose Google’s cloud analytics platform because it could meet its needs.
 
“For instance, our personalised playlist depends on a lot of data analytics and we found that GCP could meet this need,” he said while on stage with GCP vice president Brian Stevens.
 
“Also, the customer support from Google has been great,” Harteau added.
 
But these new wins aren’t marquee clients from the more traditional sectors such as financial services, telecommunications, oil and gas, retail, and government.
 
Nor have there been updates as to whether software from conventional players such as SAP SE or Oracle Corp would be certified to run on GCP. Such interoperability is needed by many traditional enterprises, which are still using legacy applications to run their business.
 
But as Google builds its list of large well-known customers, it’s worth noting that the cloud game isn’t a zero-sum game. Disney and Coca Cola are also customers of AWS, while Spotify still has a large part of its core infrastructure residing on the AWS cloud.
 
Google’s recent wins do signify that it has begun to make some progress in convincing sizable companies to put at least part of their workloads and applications on GCP.
 
Pundits weigh in
 
‘We’re dead serious about the cloud,’ says GoogleAnalysts Digital News Asia (DNA) spoke to were cautiously optimistic about Google’s announcements and its strategic direction.

Gartner research director Michael Warrilow (pic) argued that many of the GCP 2016 keynotes were very “scripted sets of points” designed to appeal to enterprise customers.
 
“But I feel she [Greene] did it in a slightly awkward way that didn't hit on business benefits,” he told DNA on the sidelines of the conference.
 
“I also feel her keynote was a start but appealed to the easier edge cases rather than examples of core infrastructure usage by enterprises,” he added.
 
Naveen Chhabra of Forrester Research concurred, adding that Greene’s session appeared “a bit shallow” and only focused on existing capabilities, like best-in-class data centre capacity and capability.
 
“I had expected more directional content in terms of what it is doing to address enterprise requirements, and some of the industry use-cases were not very clear,” he said.
 
Naveen however said Google is approaching enterprises in the right way as the company is beginning to put the pieces – products, services and an optimal organisational model – together in the right way.
 
Google has also the required engineering excellence, scale and credibility to build the required offerings, he added.
 
Asked what challenges Google would face as it tries to scale, Gartner’s Warrilow said one would be to reach large traditional enterprises in the financial services, telecommunications, and government sectors.
 
“It will be difficult and global expansion in scale is critical,” he argued. “There is some good news with Google saying it will expand into Oregon in west United States and Tokyo in Asia, with 10 more countries throughout 2017, but that’s a good 20 more months to go.”
 
“Google also needs to build trust and credibility with enterprises, which will require extensive partnering of the right companies with its cloud products,” he added.
 
Edwin Yapp reports from Google Cloud Platform 2016 San Francisco, at the invitation of Google. All editorials are independent.
 
Previous Instalment: Google’s cloud coming of age
 
Related Stories:
 
AWS burnishes its enterprise credentials with host of goodies
 
Pressure from all sides to adopt the cloud: CIOs
 
 
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