Google has pulled off a minor coup by convincing VMware Inc. founder Diane Greene to head up its cloud computing business.

Greene was convinced to join Google after the Web giant snapped up her latest startup, a company called Bebop Technologies. She’ll be heading up a new team to oversee all of Google’s cloud products, including the Google Cloud Platform, Google for Work and Google Apps.

“As a long-time industry veteran and co-founder and CEO of VMWare, Diane needs no introduction,” wrote Google CEO Sundar Pichai in a blog post yesterday. “Cloud computing is revolutionizing the way people live and work, and there is no better person to lead this important area.”

The move signals that Google is deadly serious about moving away from the traditional advertising business that makes up the bulk of its revenues. The company’s dominance of Web search, its Google Chrome browser and its Android platform have helped make it one of the richest companies in the world, yet it still lacks a strong presence in the enterprise. To expand into those realms, Google is looking to leverage its expertise in IT infrastructure to create cloud-based software and app and development tools. This market will be worth around $25 billion a year within four years time, predicts International Data Corp.

Google says around 60 percent of the Fortune 500 businesses are already using at least one Google cloud service, such as its enterprise-grade Gmail and Google Docs suite. But its cloud revenues remain just a fraction of what market leader Amazon Web Services and second-place Microsoft pull in each year.

Nonetheless, Google is confident it can get there. Speaking at the Structure conference in San Francisco yesterday, Google’s senior vice president of technical infrastructure Urs Hölze made a somewhat bold prediction that Google’s cloud revenues would surpass its advertising revenues in as little as five years. Hölze explained that cloud today is in the same position as smartphones were in 2007, which means its only just taking off.

“I think cloud will actually turn out to be a huge business because it’s a service business,” Hölze proclaimed. “The next five years in cloud are going to [bring] much more evolution than in the last five years. And I think we’re going to be the Android in that story.”

Hölze’s claims are hugely ambitious given that Google’s advertising efforts accounted for around 89 percent of its $66 billion in revenues last year. In contrast, Google doesn’t even report on how much its cloud business pulls in, though unofficial estimates suggest a figure of around $500 million in sales annually.

In any case, Google could hardly have hoped to land anyone better to lead its cloudy efforts. Greene is bona-fide queen of Silicon Valley, having founded VMware back in the 1990s alongside her husband Mendel Rosenblum and a few others, leading the company as its CEO towards its $635 million sale to EMC Corp.

Greene later became an angel investor and adviser to a number of seriously disruptive startups including Hadoop leader Cloudera Inc., Cumulus Networks, Nicira and others.

Pichai himself said Greene was someone “who understands enterprise needs very well” and that’s just the kind of person it needs at the helm if the company is serious about becoming a leader in the cloud.

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