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Put 25,000 attendees and 3,000 Google engineers in one place for three days and a lot of interesting things will be said. One of the most interesting things we heard at Cloud Next ’18 was a throwaway comment by Google Cloud Chief Executive Diane Greene at the industry analyst session. To paraphrase:
“We all are very early in this cloud business. No one really knows how to do this.”
Wikibon agrees: We are early; customer requirements are rapidly evolving; business models are immature; there’s a lot of learning yet to do.
However, we also believe that some cloud companies seem to know more about providing cloud services than others. And given that Google Cloud is at best a distant third in the public cloud market, a big question that Google Cloud needed to answer at Google Next ’18 was: Could they catch up?
Short answer? We think so. Slightly longer answer? With the right investment and right focus, Google Cloud has the talent, technology and scale to be an enterprise cloud force.
Momentum is building. In the last three years, Google has invested $30.9 billion in its cloud. The business unit is adding headcount faster than any other Alphabet Inc. unit. The company has expanded to 17 regions, fewer than Azure but comparable to AWS. It claims to feature the world’s largest private network, with more than 100 points of presence, doubling in the last two years, and extensive subsea cabling, also nearly doubled.
In addition, more than 4 million firms are paying for G Suite, including big companies such as Airbus, Whirlpool and Colgate. When combined with free versions, G Suite has 1.4 billion users. Finally, in 2017, it tripled the number of $1 million-plus deals.
To accelerate that momentum, Wikibon identified five domains where Google Cloud needed to demonstrate progress. They were:
Here’s how the unit Cloud did relative to each of those domains:
Users haven’t been doubting Google Cloud’s technology. Nor, obviously, its scale. Instead, the two questions consistently asked are: (1) Will Google Cloud be a force in establishing the state-of-the-art in enterprise cloud services? And (2) Will it engage the enterprise like a true enterprise technology player?
Users will be happy with both of the answers that emerged from Cloud Next. On the question of cloud innovation, this was by far the simplest and most cohesive presentation of the Google Cloud business that Wikibon has heard. In the past, Google Cloud seemed an inside-out packaging enterprise: Here’s a bunch of good cloud technology, let’s package it up and charge for it.
At this show, however, Google Cloud displayed an outside-in focus that we haven’t seen before. Google Cloud now is organized around five core businesses — GCP, G Suite, Google Maps, Chrome Enterprise and Android Enterprise — each of which lines up with real enterprise issues. More importantly, the company clearly articulated its value promise:
All good, but the real user concern we’ve been hearing about Google Cloud is its engagement model: Would GCP craft an engagement identity that users – and partners – love?
Here, too, Google Next 2018 showed promise – real promise. Wikibon believes Google Cloud is establishing a differentiated approach to enterprise engagement that will forge a unique, highly valuable identity. Our observations are that it is:
From pure research to production workloads, Google is a universally acknowledged leader in AI technology. Its voice recognition, Google Assistant, and translation/transcription are the best we’ve seen, for example. And, of course, Waymo self-driving vehicles have racked up double the test miles of any other self-driving car outfit. As a company, Google promises to “advance AI for everyone,” but there has been some doubt about how it would do so for enterprise customers.
Cloud Next answered this question as well. Google introduced or extended a number of leading AI services. Among the services we found most interesting:
Google’s path to catching up in the enterprise cloud market runs straight through the land of enterprise developers. And increasingly, the enterprise developer landscape is shaped by open source, APIs and security.
In response, the cloud industry is shifting focus. Infrastructure-as-a-service offerings are starting to take on platform-as-a-service characteristics as enterprise developers gain market power and shift their focus from simplifying infrastructure deployment to exploiting advanced application services such as AI.
Google is well-positioned to catch this wave. It’s a fixture in open source, one of the two biggest contributors with Microsoft, and features 20,000 projects on GitHub. Its Qwiklabs is a rapidly expanding destination for online developer training. And Google’s incredible market scale ensures that its contributions to the development community have a strong chance to become de facto standard – or even conventions – in the developer world.
For example, Kubernetes has emerged as the leading orchestration platform; it’s launching 4 billion containers per week. Spanner is emerging as a great, stable technology for scalable relational database applications, within practical engineering limits of distributed data, of course.
At Next, Google Cloud discussed a number of important advances that will excite enterprise developers, including:
One cloud business domain where best practices are a work in progress is partnerships. Business conventions and relationships for technology and go-to-market partnerships have been well-established for decades. Cloud business models are upending many of those conventions and recasting channel relationships.
As a company, Google has been at the vanguard of forging new types of cloud-based business partnerships. Its marketing cloud in particular supports an enormous volume of complex business transactions through a self-service sales and support interface – as well as an expansive array of marketing service companies that act as partners for Google’s marketing cloud services. Google knows how to present complex cloud services to a range of customer audiences.
Will it be able to translate this knowledge into an advantageous ecosystem? Early results are encouraging. Partners want to see commitment to and consistent application of partner programs that pay. Google Cloud is committing to partner participation in 100 percent of deal, from just over 80 percent today. That includes sales deals, professional services engagements, and marketing programs.
Google has also doubled partner-dedicated resources while at the same time reducing the number of partner programs to one, at least by 2019. Using its leadership open-source presence and outstanding commitment to cloud-related knowledge transfer, the company hopes to build the most collaborative and innovative partner presence in the cloud market.
Two areas of special significance: First, Google Cloud introduced Cloud IoT Edge in Alpha. Using this, partners can embed Google Cloud’s ML services into edge devices that run Android or Linux. It will locally store, process and capture data essential to running and managing these devices. Cloud IoT Edge will run TensorFlow Lite models locally, and will get a special boost from devices that employ Google Cloud’s Edge TPUs. Second, Google Cloud announced a program that will allow top-tier MSP and other partners to help enterprises run Oracle workloads in the cloud with less than 1-millisecond connectivity cost.
Google is an acknowledged leader in cloud security, and Next showed how it will start leveraging that leadership in Google Cloud. The company showcased a number of technologies – some leadership, some catch-up – that can strengthen its security conversations and services to large enterprises, including context-aware access, shielded VMs and vulnerability scanning.
However, the Google Cloud’s real security story is its up-and-down as well as end-to-end security commitments. GCP features multiple levels of security, from hardware up to service delivery. It refers to it as “defense in depth at scale.” In action, it’s impressive; for example, 94,000 web pages scanned for harm every minute and 400 million android devices health-checked daily. Google also trumpeted the fact that there are no reported or confirmed cases of account hijacking on a Google platform.
How will Google Cloud sustain its transactional business model as the rest of the company employs an ad-based business model? Diane Greene noted the parallel between Google’s overall mission and Google Cloud’s mission: Google’s mission is to organize the world’s information and make it universally accessible and useful; Google Cloud’s mission is to organize information within customer enterprises, keep it secure and present it back in a valuable way. It’s an ambitious vision, but it’s doing it.
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