Why Google Will Dominate Cloud Computing
Some statistics are cause for worry, and some statistics are truly
alarming. It’s reasonable to assume that one statistic is, to the Google
management, clearly in the alarming category.
That statistic is the market share held by Google Cloud Platform.
GCP’s real number is debatable – the cloud market is measured many ways
– but for simplicity let’s use Synergy Research’s:
If you’re a GCP executive, the numbers reveal that something very
fundamental has not succeeded. Running in a distant fourth place? Ouch.
Given Google’s gargantuan strengths, what happened? Being competitive
in the cloud relies on having multiple far-flung sophisticated
datacenters tied together with an advanced network – which Google
certainly has. And the brilliance of the Google engineers and developers
is second to none, advancing science-fiction tech like self-driving
cars, VR, and AlphaGo, the AI program that bested top human champions in the intuitive game of Go.
Yet as impressive as its tech prowess is, GCP’s ability to cater to
the prosaic needs of enterprise cloud customers has been limited, even
fumbling. Google has always focused more on selling its own services
rather than hosting legacy applications, but these legacy apps are the
engine that drives business. Remarkably, GCP customers don’t get support
for Oracle software, as they do on Amazon Web Services. Alas, catering
to the needs of enterprise clients isn’t about deep genius – it’s about
working with others. GCP has been like the high school student with
straight A’s and perfect SAT scores that somehow doesn’t have too many
As cloud computing continues to rocket forward, Google’s hyper-focus
on its own brilliant tech is costly. Gartner forecasts that the public cloud services market
will grow to $204 billion this year, up 16.5 from $175 billion last
year. Upping the stakes, dominance in the cloud translates to revenue in
related areas like Big Data and Artificial Intelligence.
Given GCP’s struggles, a core question seemed to hang over the recent GCPNext, Google’s annual cloud showcase: will Google Cloud Platform succeed in the enterprise?
It was clear that Google executives walked on stage with a unified
message to address that issue. “We’ve come a long way as an enterprise
company,” said Google CEO Sundar Pichai, in a statement that seemed as
aspirational as currently accurate. Most direct was Eric Schmidt,
executive chairman of Google parent company Alphabet. He was frank about
the limits of App Engine,
an earlier cloud effort. In this new era, “We’ve decided to meet you
where you are, as opposed to where we think you should be.”
Accompanying the executives’ pitches were demonstrations of Google’s
next-gen web-scale applications for machine learning and deep analytics.
Also highlighted were cloud-focused advances based on Google’s search
business, like image recognition and processing. To spotlight its
enterprise focus, the event offered splashy videos from GCP clients
Spotify, Disney Interactive and Coca-Cola.
Afterward I spoke with Diane Greene,
SVP of Google’s cloud business. Greene, co-founder and former CEO of
VMware, was hired to run GCP in a move that signaled its sharp focus on
business clients. In Silicon Valley, Greene is rightfully known as a
legend. I asked her about changes in GCP since her tenure began last
“The engineering is ramping [up]…but we’re paying a lot more
attention to how to interact with our customers and partners,” she told
me. This isn’t limited to large enterprise – small and medium sized
business are also targeted, she said. As for supporting software like
Oracle’s, geared for traditional business clients, she said, “We’ve got
to build out our ecosystem – we’re very focused on it.”
Executives present at GCPNext16
Cloud Cloud: Deep Skepticism
Despite these assurances, the event hosted plenty of experts who voiced skepticism about Google’s enterprise prospects.
“They must do a much, much better job of appealing to the enterprise,” said Holger Mueller,
Constellation Research analyst. “These great wins they have, Spotify,
Coca-Cola, and Disney Interactive? The average company cannot relate to
the loads and profiles they have. You have Google saying they’re typical
problems, but they’re not typical problems, at least in the minds of
the CIOS and CTOs listening.
“To me, it always looks like the Google people are super smart, super
intelligent, and they think the enterprise will figure it out for
themselves,” Mueller said. Yet enterprise clients are typically
overwhelmed – with a busy workload and new technology. Google “has to
bridge that,” he said,
John R. Rymer,
Forrester analyst, questioned Google’s approach to the enterprise. He
echoed Mueller’s sentiments that Spotify and Disney Interactive don’t
represent the typical corporate workload. “Is the ambition to go after
much more prosaic applications involving relational databases and
transactions and integration? Or is it really going after those
super-scale digital projects, to really try and win there? It’s hard to
The contrast between Google and AWS is pronounced, Rymer said. “We went up to AWS re:Invent,
talking to a whole bunch of customers up there. They’re excited about
moving their Oracle databases into MySQL on AWS. It’s not the
[Coca-Cola] Happiness Project.”
However, he sees Google’s progress toward business customers.
“They’re starting to break out all these services, which previously were
all kind of buried. So they have a big service catalog – gee, it looks
like AWS. Used to be, there were a small number of services. And they’re
really starting to refactor and bring out more APIs and more services.
Looks a lot like the competition looks.”
GCP executives, said Sam Charrington,
CloudPulse Strategies consultant, seem to view cloud as yet another
markets that Google has entered late, but can still win based on product
strength. Google’s success with search, mail, maps, browser and mobile
do support this idea. But, he noted, these are all consumer markets. “No
doubt this strategy has yielded some innovative offerings –
particularly in the data and analytics space – yet their ability to win
enterprise markets remains largely unproven.”
A user tries Google Cardboard, the company's low-cost virtual reality device.
Google Cloud’s Long Term Edge(s)
Perhaps GCP won’t need to so strenuously court enterprise clients to win cloud share. Al Hilwa,
IDC analyst, speculated that Google, “may be thinking, they’re all
going to come our way.” GCP, in other words, may draw a large corporate
user base due to the sheer innovation of its technology. In the current
climate, exceptionally advanced technology isn’t only for startups.
“Enterprises are trying their best everyday to look like successful
startups,” he said. “All these companies are setting up innovation
teams, transformation teams. Companies like Walmart and Target are
setting up shops in Seattle, the Bay Area. Every category has a
disruptor, therefore all the established players are scrutinizing their
disruptors and trying to imitate.”
Even established legacy players realize they need to look toward the
edge. To be sure, Hilwa said, AWS and Microsoft Azure use a more
enterprise-friendly focus, and in reality that’s needed to succeed.
However, the importance of leveraging the most advanced tech will grow far greater in the years ahead. This favors Google.
If I had to predict which cloud platform will dominate several years
down the road – a perilous forecast, given the variables – I’d say
Google has a superb chance. Certainly that’s a contrarian position, in
light of GCP’s struggles.
GCP’s long term edge will rely on two factors: 1) its new management,
with its willingness to admit a course correction, and 2) most
important – the quality of its technology.
For the management piece, hiring Diane Greene to run GCP will likely
pay enormous dividends. Her name isn’t as marquee as other tech
luminaries, but she has done as much as anyone to create the modern IT
world. As co-founder and CEO of VMware she ushered in the era of
virtualization – which enabled cloud computing. And she knows enterprise
buyers; VMware is the archetypical enterprise company. I heard at
CCPNext that she has bulked up the sales staff and is rallying them to
more aggressively court business customers.
As for GCP’s edge in technology, it’s clear: the company has always
been profoundly focused on the tech itself. And the benefit of that was
clear as I watched the morning demo at CCP. I’ve sat through countless
tech demos – enough to be jaded – and I’ve never seen one at that level.
GCP’s advances in machine learning and analytics are truly at the edge.
Of course Google isn’t alone in its pursuit of machine learning or
analytics; Microsoft, AWS, and IBM all have impressive efforts. But
Google, with its legacy strength in the network of the Internet and its
focus on futuristic tech, is arguably better positioned than any of its
competitors, long term.
GCP is late but has finally very much woken up. As the years roll
forward and leveraging advanced tech becomes a competitive necessity for
the enterprise, Google Cloud will be a force to be reckoned with.