Why Google hasn’t taken off in the cloud yet

Posted by:admin Posted on:Jan 14,2016

And what the new head of Google’s cloud is going to do about it

Startup Gennion uses sensors to provide retailers with useful information on customer store traffic. The Spain-based Internet-of-Things company processes about 16,000 events per minute from its sensors and is hoping to scale up to thousands per second soon.

Like many young companies, Gennion launched in Amazon Web Services’ cloud. But Chief Architect Mariano Navas, a 15-year coding veteran who is on his third startup and runs a blog called Coding in Flip Flops, wasn’t impressed. He didn’t want to provision AWS virtual machines, storage and load balancers. He preferred to write code, so he tried Google’s cloud platform and hasn’t gone back.

Google would love to have more “frustrated AWS customer moves to Google” success stories like Gennion. But while Google’s cloud has been attracting developers in flip flops and startups in droves, it’s now time for the company to start looking for bigger wins.

Google Cloud Platform is in the unique position of being one of the Big Three Infrastructure-as-a-Service (IaaS) offerings. But at the same time, it is generally considered by cloud watchers as the third-best option behind AWS and Microsoft.

To help it break out of third place, Google acquired VMware Co-founder Diane Greene’s stealthy startup, dubbed Bebop, for $380 million and put her in charge of its Google’s cloud efforts. But even though she took VMware from niche technology provider to enterprise staple, making Google cloud a must-have for big organizations won’t be easy.
If AWS could do it …

The biggest criticism against AWS used to be its lack of adoption by enterprises. It took the business years to develop the sales and engineering staff, build relationships with systems integrators and convince wary enterprise customers that the cloud is safe.

Just last year AWS seemed to turn the corner by trotting out Capital One, General Electric and Accenture as case studies at its re:Invent conference.

Google now must follow similar process, and there’s reason to think the company can succeed given that it’s got the technology and talent.
“We’re investing to be a major player in the cloud.”

Brian Stevens, vice president of cloud platforms at Google

Google believes it has time, too. Brian Stevens, vice president of cloud platforms at Google (and former CTO of Red Hat), estimates that less than 5% of the apps that will live in the cloud have been moved or developed there yet. “We’re investing to be a major player in the cloud,” he says, adding that Google executives will always consider the company’s cloud unit “small” until it is the largest division within Google.

For context, in 2014 Google registered $59 billion in advertising revenue. Amazon will likely surpass $8 billion in IaaS sales this year.

Google has not failed in the cloud. Gartner Vice President and distinguished analyst Lydia Leong, who sizes up the market each year in her Magic Quadrant report, says Google has had “qualified success” in IaaS. It’s been much more successful than a whole host of others (VMware, Verizon, Hewlett Packard Enterprise, to name a few). But, Google is “not coming anywhere close to Azure. And Azure is nowhere close to touching Amazon,” Leong says. In her estimation, Google is orders of magnitude away from AWS. But, she says it’s pointed in the right direction.

Google lists businesses like Sony Music and Coca-Cola as customers.

Synergy Research Group – which tracks cloud provider market share and revenue – estimates that in the third quarter of 2015, AWS had 39% market share in the IaaS industry, with Microsoft at 11% and Google at 6%.

Google obstacles

So, why hasn’t Google taken off in the cloud? Let’s start with one of the company’s main marketing messages, that it gives customers access to the same internal services Google uses to power its own massive applications. In other words, you too can “run like Google.”

Gartner’s Leong says there have been a couple of issues with that campaign. First, there aren’t many other companies that really do have the enormous data and infrastructure needs that Google does. Those that do – like Facebook, Twitter and Yahoo – build their own clouds. So, Google could do more to convince organizations about the value of “running like Google.”

Second, Leong says Google’s internal platform was not designed to be a set of composeable web services; it was built for Google. AWS, on the other hand, built its cloud from scratch to sell it as a service.

“Externalizing it in a way customers can consume has been difficult,” Leong says of Google’s undoubtedly impressive infrastructure.

Google has also suffered from targeting bleeding-edge customers, yet having less in terms of breadth of IaaS services to offer, she says. “I’ve never felt that Google did not understand the enterprise,” Leong says. “But they’ve never seemed to have the institutional will to go after it in depth.”

Google officials acknowledge that AWS had a first-mover advantage in selling IaaS cloud services, but Google for Work Vice President Carl Schachter says his company has caught up. While Google does not release revenue figures, Cloud Platform is the fastest growing enterprise product in the company’s history, he claims.
The Google cloud plan

How will new cloud chief Greene accelerate that even further? For one, Google is increasing its sales force to sell to enterprises, Schachter says.

Merely bringing on Greene is powerful, too, even if she hasn’t made any moves yet. John Treadway, senior vice president at Cloud Technology Partners, asserts: “She has enterprise DNA.”

What’s more, Google is committed to price-competitiveness with AWS and Azure.
Realistically though, it will come down to products and service offerings targeted at enterprises. Schachter says enterprise customers have found success using Google’s cloud to manage data at scale, for example, by using the company’s Big Query analytics-as-a-service offering. “We have an appreciation for big data,” he says. Customers also frequently use Google in no-ops (no operations) environments where developers employ the company’s advanced application development and container platforms App Engine and Kubernetes to quickly create and run massively scalable apps without provisioning infrastructure components.

No one questions the technical boldness of Google’s cloud, but some believe the company still needs to build up core infrastructure services to make them “enterprise-ready.” Independent cloud analyst Kurt Marko says Google could focus on features like data warehousing, application migration and integration services, single sign-on, authentication, virtual private networks and case studies of large organizations running “enterprise apps” on GCP. “[The company] needs to make Google Cloud look like a seamless extension of the enterprise in the way Microsoft does with Azure and Windows Server,” Marko says.

Google could mimic a successful Microsoft cloud strategy to appeal to enterprises. Microsoft has packaged IaaS Azure with its even more popular Office 365 cloud email and collaboration SaaS tools. It uses SaaS to sell IaaS. When Greene was hired to head Google’s cloud, she was given purview over not just Google Cloud Platform IaaS, but Google for Work and Google Apps too – which includes popular SaaS tools Gmail, Docs and Drive. Schachter, the Google for Work vice president, says the company will increase its cross-selling of these offerings.

“It’s incumbent upon us to bring that right blend of products and services, to expand the ecosystem and help organizations make that migration,” Schachter says.

Some users think Google has an opportunity. Brian McCallion, an independent consultant who helps large enterprises work with AWS’s cloud, says there is no shortage of customers clamoring to sign on with AWS. But, he does think there is room in the market for more than one provider.

Microsoft, he says, has rubbed some customers the wrong way with a culture over the past two decades of proprietary lock-in via Windows. Some people are just against using Azure for that reason.

That presents an opening for Google, McCallion says. Amazon has such huge demand across so many industries, that Google could find a way to offer some niche services to specific vertical markets – say finance or health care. “It would be hard for Google to offer everything Amazon offers,” he says. “But it could make some strategic investments in certain areas.”

When evaluating providers, Google is included in the conversation, McCallion says. If all Google really needs is more attention brought to its Google Cloud Platform, then the hiring of Greene could do just that.

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