Google wants to reinforce its position in the Cloud
Eighteen months after her arrival, Diane Greene is clearly satisfied: “Our business is accelerating, and we have the sector’s highest growth rate,” says Greene, head of Google’s cloud services division. Still a distant third behind Amazon and Microsoft, the search engine company is nonetheless committed to trying to catch up with its competitors.
Google made a point of showcasing its new cloud ambitions at a recent conference in San Francisco, gathering more than 10,000 professionals and developers. On the stage, prestigious clients appeared, one after another: Disney, HSBC, eBay, Verizon. Eric Schmidt, Chairman of Alphabet — Google’s parent company — revealed they’ve invested $30 billion over the past three years. “We’ve got the money and the determination,” he said.
But the Mountain View-based company is still lagging behind the runaway industry leader. Last year, Amazon Web Services boasted $12.2 billion in revenue in cloud infrastructures, which allows both private companies and public entities to rent servers rather than build their own network. According to Deutsche Bank’s estimations, Microsoft and Google (who both don’t release detailed figures) had a revenue of just $2.4 billion and $900 million respectively.
“Look after our clients”
Google’s offensive began in earnest in late 2015 with the hiring of Greene, already a big name in Silicon Valley, to lead a unit comprising all cloud activities. Greene built her reputation by co-founding and leading VMWare, one of the pioneers in virtualization technology, which makes it possible to run several operating systems on a computer or a server.
Since joining the company, Greene has made her mark. “My first mission was to build an organization that knows how to look after its clients,” she explains. She simplified the processes, hired a large number of experienced enterprise sales personnel and encouraged Google engineers to meet directly with the client companies.
She’s also tried to make up for the company’s poor-image problem by creating a new identity, Google Cloud, and by signing prestigious contracts — even if it meant temporarily slashing margins. “Our efforts are bearing fruit,” she says.
Google also continues to invest. “Our infrastructure is the most efficient, the safest and the most reliable,” Greene declares.
Still, the company continues to trail in terms of open data centers and international footprint. “The trouble is that Amazon and Microsoft aren’t slowing down,” notes Dave Bartoletti, an industry analyst at market research company Forrester. “To catch up with them, Google will need to invest more than them.”
The search engine company is successful in attracting big corporations and startups alike — Snapchat signed a $2 billion contract over five years with Google — but its appeal towards middle-sized companies is still lacking. “The market has only just opened,” says Bartoletti. “It will be big enough for all three players to succeed.”
In 2015, Urs Hölzle, head of infrastructure, estimated that the revenue of Google’s cloud services could exceed its massive online advertising sales revenue by 2020. That’s a goal Diane Greene isn’t yet willing to commit to. “It’s a huge market,” she simply says. “If we continue to sign contracts and to improve our offer, it will be a very good business.”
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