Google Cloud’s 5 Boldest Moves of 2019

Google wants to oust top-ranked public cloud providers Amazon Web Services (AWS) and Microsoft Azure. And, according to media reports, it set a 2023 internal deadline to become a top-two player in the market. It’s an ambitious goal, to put it gently. While Google has been gaining, Amazon’s share of worldwide public cloud revenues has hovered around 40% for a few years, and Microsoft’s has increased to almost 20%, according to Synergy Research Group. For comparison: Google’s got around 10% of the market. Google wants to oust top-ranked public cloud providers Amazon Web Services (AWS) and Microsoft Azure. And, according to media reports, it set a 2023 internal deadline to become a top-two player in the market. It’s an ambitious goal, to put it gently. While Google has been gaining, Amazon’s share of worldwide public cloud revenues has hovered around 40% for a few years, and Microsoft’s has increased to almost 20%, according to Synergy Research Group. For comparison: Google’s got around 10% of the market. Still, the No. 3-ranked cloud giant has taken considerable steps toward its top-two goal over the last 12 months. Here’s a look back at Google’s five boldest cloud moves from 2019. Google Cloud rang in 2019 with a new CEO. Thomas Kurian jumped ship as Oracle’s top cloud executive to join Google. Kurian spent 22 years at Oracle, where he reportedly clashed with that company’s founder and CTO Larry Ellison over Oracle’s cloud strategy. And while Oracle’s public cloud has been struggling, its stronghold in the enterprise is legendary, largely because of its database software running in data centers. “He [Kurian] was hired to bring that customer focus and building out the sales team to make the Google Cloud a more enterprise-geared offering,” said Sid Nag, VP of research at Gartner, in an earlier interview. In his first few months as CEO, Kurian told The Wall Street Journal that he already simplified contracts for businesses instead of taking a one-size-fits-all approach. He also put more predictable pricing in place, and said he intends to hire more Google Cloud sales and support staff. Then, at the annual Google Cloud Next event in San Francisco, Kurian unveiled the company’s hybrid cloud strategy. At Google Cloud Next 2019, Google moved into on-premises data centers and across clouds — including AWS and Microsoft Azure — with Anthos, its hybrid-cloud platform. Since then it has rolled out upgrades to the platform including Migrate for Anthos, which auto-migrates virtual machines (VMs) from on-premises, or other clouds, directly into containers in Google Kubernetes Engine (GKE) and without requiring any VM modifications or rewrites. Anthos is significant for a few reasons. First, it gives Google a foot in the door to enterprise’s on-premises data centers. Because of regulatory or compliance requirements, or simply because of cost, some workloads remain on premises, so Anthos gives Google access to that piece of the pie. In addition to running on AWS and Azure public clouds, Anthos launched with 30-plus technology partnerships, which gives Google another entry point into enterprise data centers. For example, Anthos will integrate with hyperconverged infrastructure  software stacks and servers from Cisco, Hewlett Packard Enterprise (HPE), Dell EMC, and VMware, along with SD-WAN from Cisco and VMware, among other vendors. Plus, these vendors’ technologies will also give enterprise customers a direct link to Google Cloud Platform (GCP). And finally, with Anthos Google beat rival Amazon into enterprise data centers. After announcing its on-premises play a year ago, AWS Outposts finally landed in data centers earlier this month. Under Kurian’s leadership, Google Cloud has spent billions of dollars acquiring startups to boost its enterprise offerings. This includes enterprise file storage startup Elastifile, data analytics provider Looker, and security startup (and sister company) Chronicle. Google Cloud’s  most recent purchase — CloudSimple — makes it easier for customers to move VMware workloads from their on-premises data centers into public clouds. This acquisition gives Google an edge as it competes against AWS and its hybrid cloud service with VMware called VMware Cloud on AWS. In a blog post about the deal, CloudSimple co-founder and CEO Guru Pangal said his team is “thrilled to join Google Cloud and its journey to establish the most modern public cloud for the enterprise.” In February, Google CEO Sundar Pichai pledged to spend more than $13 billion this year on data centers and offices in the U.S. This will include “major expansions” in 14 states and “tens of thousands” of new employees, Pichai wrote in a blog post. He added that “2019 marks the second year in a row we’ll be growing faster outside of the Bay Area than in it.” For comparison, in 2018 the tech giant invested $9 billion in facilities and hired more than 10,000 people in the U.S. A day before Pichai’s $13 billion pledge, during a presentation at the Goldman Sachs Technology and Internet Conference, Kurian promised Google Cloud will “accelerate the growth even faster than we have to date.” The company will focus on individual industries like financial services and work more with channel partners, he added. And while company executives typically don’t provide specifics about cloud business revenue, on an earnings conference call in July, Pichai said Google Cloud reached an annual revenue run rate of more than $8 billion and plans to triple its sales force “over the next few years.” Another major piece of its strategy to pull in enterprise customers involves boosting its security services. To this end, in 2019 Google Cloud rolled out a slew of partnerships with security vendors and added a ton of capabilities to make its cloud more secure. Over the summer it added a new security feature that puts context aware capabilities in Cloud Identity-Aware Proxy, which allows companies to define and enforce granular access policies for apps and infrastructure based on a user’s identity and the “context” of their request, such as users’ location, time of day that they are trying to access a particular app, or the security status of the device. This is good for both the enterprise and its employees: it improves a company’s security posture and means employees have easier access to the cloud and workloads running in the cloud on any device without using a virtual private network (VPN) client. A couple months later Google added a security analytics product that identifies misconfigurations and compliance violations in companies’ GCP environments. And in November at the U.K. edition of its Cloud Next event, it unveiled a ton of capabilities around data encryption, network security, security analytics, and user protection. Perhaps the most important of these is its new External Key Manager, which allows companies to store and manage encryption keys outside of Google Cloud. It’s the first major cloud provider to offer this service. The move to allow companies to manage and store their encryption keys outside of Google Cloud is a big deal because “it gives customers complete control of their keys,” Fortanix CTO and co-founder Anand Kashyap said in an earlier interview. Finally, just this month Google announced new partnerships with several security vendors including Palo Alto Networks, McAfee, Fortinet, Qualys, and ForgeRock. Google Cloud made some big moves in 2019, but will they be enough to win the cloud wars? “Whatever Google’s internal goals may be, it is facing some hard facts,” said John Dinsdale, chief analyst and research director at Synergy Research Group. Google’s cloud infrastructure revenue grew more than 30% in Q3 relative to the third quarter of 2018. And on a rolling annualized basis, its revenue in the last four quarters grew 70% compared with the previous four quarters, Dinsdale said. “Those are decent growth numbers but that puts its growth rate in this market marginally above Microsoft Azure, though really not much separates them in terms of growth metrics,” he added. “However, Microsoft Azure is twice the size of Google in this market.” While AWS isn’t growing as fast as Azure and Google, this is attributed to its larger scale compared to its two rivals. “In absolute dollar terms, AWS incremental growth still remains way ahead of both Microsoft Azure and Google,” Dinsdale said. “AWS is over twice the size of Microsoft Azure and four times the size of Google Cloud Platform. Irrespective of goals that are being set or any changes to strategy and marketing, there remains a gulf between Google and the two market leaders. They too are focused on ensuring continued strong growth in their own cloud business units, so substantially narrowing the market share gap with them is a tough ask for Google.”