By Charles King, Pund-IT, Inc. March 30, 2016
I attend more IT vendor and industry conferences than is probably good for me (especially given the amount of rubber chicken I’ve consumed over the years). But being onsite at IT events can provide insights that are hard to come by from webcasts or slide decks.
Last week’s Google Cloud Platform (GCP) Next 2016 was a good example of how this can work to both a vendor and its audience’s benefit. Following are a few thoughts on this event and the implications for the company and its partners and customers.
Google’s scheduling of GCP events has been less conventional than the fixed annual strategy followed by most other IT vendors. The first GCP event occurred in May 2013 and the second in November 2014 and the third in June of 2015.
The messaging from last year’s GCP was also impacted by two significant events; 1) Google reorganizing itself via a new overarching “parent” company – Alphabet, and 2) the company’s acquisition of bebop, an enterprise development platform startup, and making its founder, Diane Greene (co-founder and original CEO of VMware), SVP of the GCP organization.
As a result, GCP Next 2016 acted as a coming out party for both Google’s enterprise-specific cloud strategy and Greene. Both will be crucial for the evolution and potential of the company’s cloud computing efforts.
From a strategic messaging perspective, main tent presentations by senior executives, including Google, Inc.’s CEO Sundar Pichai, executive chairman Eric Schmidt, SVP technical infrastructure Urs Hölzle and Diane Greene all followed a Now/Next cadence where the current state of the cloud market and vendor solutions (Now) were contrasted with what Google offers today (Next). The result was both informative and forward-looking, allowing the presenters to leaven respect for Google’s current accomplishments with recognition that much more needs to be done.
For example, Greene’s presentation focused on the importance of customer choice as a driver for GCP client engagements, with efforts in open source and security and the “access to (Google) innovation” providing significant value. She explained that GCP solutions are often better than competitors’ offerings in both performance and cost (up to 50% cheaper), and that the company offers solutions that are particularly useful for large scale, enterprise customers.
Greene also noted that Alphabet invested $9.9B (roughly 13% of revenues) in capex in 2015 to support buildout of data centers, fiber and other infrastructure technologies critical to GCP. That’s a significant sum and far more than the capex expenditures of the vast majority of cloud providers.
Greene also delineated the progress of efforts in enhanced security and machine learning as drivers for clients accelerating their journey to the cloud. But she acknowledged that Google “is still learning how to sell cloud” in ways that are compelling for enterprise customers. That carefully orchestrated humility was echoed by other executives, peaking when Eric Schmidt declared Google’s intention to, “Meet you where you are, not where we think you should be.”
That was an interesting statement coming from a company with a lofty reputation for intellectual and technical excellence. A reasonable assumption is that Schmidt and his associates believe it wise admit that Google knows it needs to better engage and support clients, according to their requirements more than its own, and fully intends to do so.
That may be a lesson straight out of Business 101 but it underscores how being the “smartest person in the room” doesn’t guarantee will understand how customers work and think. The fact that Google is both able to undertake and willing to follow this kind of self-examination to its logical conclusion speaks well of the company.
For my money, some of the most interesting GCP Next 2016 sessions occurred during the second day’s keynotes on Google’s data center, security and container technologies. I don’t have the time to discuss them all in detail so will confine my comments to the presentation by Joe Kava, VP of Data Centers who is responsible for the design, engineering, construction, operations and sustainability of Google’s global data center infrastructure.
Kava has been with the company for eight years, meaning that he’s been at the center of and partly responsible for activities that have helped to fundamentally transform Google from a leading light in online search and advertising to a formidable presence in cloud computing. Interestingly, Kava’s presentation covered some points that the company once obscured or kept entirely secret, including its custom designed servers, use of analytics and automation to closely monitor systems components (thus enhancing availability and performance) and security features, including encrypting data in motion by default.
A highlight of the first day’s keynotes was a virtual tour of a Google data center (available on YouTube in both conventional and Cardboard-enabled VR versions). Kava used some screen captures from that video to discuss the technical nuts and bolts of data center operations, including comments on how Google’s $2B+ investment in renewable energy sources impacts cloud service pricing and the strategic reasoning behind the locations of the company’s 13 existing facilities.
He noted that while “capacity planning is extremely difficult,” the company’s intention is to accommodate cloud customers, whatever their needs. Google Cloud Platform is currently deploying in two new regions, and plans to deploy in ten more regions in 2017.
It’s hardly surprising that Google and cloud rivals, including AWS and Microsoft, are focusing on developing and delivering solutions for enterprise customers. Enterprises are, as Willie Sutton might have opined, “where the money is” practically, as well as in terms of large-scale, long-term revenue growth. IBM understood that long ago, which is why the 2013 SoftLayer acquisition complemented its in-house skills so well, making IBM the leader in enterprise-class cloud services.
Google, AWS and Microsoft are all moving in that same direction, though in notably different ways. Overall cloud market leader AWS continues to aggressively build out its service and solution portfolio, including offerings specially configured for enterprise clients. The company’s leadership position makes it formidable but Amazon is not as financially robust as its rivals. Most importantly, by nearly any measure these are still early days for cloud and no vendor is invulnerable or unbeatable.
Microsoft, on the other hand, has been particularly effective in making its business software and productivity applications ready for cloud environments, especially its Azure cloud platform. The focus there is to help existing customers transition into the Azure environment, thus reducing day to day IT staffing and management headaches. CEO Satya Nadella’s past experience (he was SVP of R&D for Microsoft’s online services division from 2007-2011) assures that cloud and Azure will remain among the company’s strongest strategic priorities.
Google’s appointment of Diane Greene to the cloud SVP role underscores the company’s hopes for and vision surrounding GCP. Greene founded and, for many years, led one of the IT industry’s most transformational start-ups, achieving remarkable success with VMware despite the often considerable efforts of competitors, including Microsoft freely distributing its competing Hyper-V solution.
Greene achieved that, in large part, by understanding, anticipating and serving the IT and business requirements of enterprise customers where VMware remains the leading platform for system and data center virtualization. Google clearly hopes that Greene can achieve similar results with GCP, and during an “Ask Us Anything” session between analysts and Google executives, Greene noted that by acting as a “trusted partner,” VMware helped customers use its technologies to spark business growth and success.
In today’s businesses and markets, cloud is poised to offer similar benefits. Given the size and scope of Google’s cloud investments, it is arguable that it has everything necessary to make GCP a leading cloud platform. Certainly, Greene has more tools and assets at her disposal today than were ever available to her at VMware. Over the coming 24-36 months, we’ll see whether Greene and her team can make Google Cloud Platform the engine for business and innovation that her employer believes it can and should be.
© 2016 Pund-IT, Inc. All rights reserved.