How Google Cloud Plans to Win Enterprises from AWS and Azure

Amazon Web Services and Microsoft Azure had a huge head start in the race for enterprise customers, and both are far ahead of all other competitors in terms of cloud market share. But Google Cloud is trying hard to catch up, and there are signs that the operator of what is likely the world’s largest cloud platform is starting to make deeper inroads into the market.

Google’s cloud computing business is developing solutions targeted specifically at 10 vertical markets, including retail, financial services, manufacturing, and healthcare and life sciences. In the past year, it’s hired industry veterans from Microsoft, Red Hat, Salesforce, SAP, and elsewhere to oversee sales, solutions engineering, and customer experience.

The cloud provider is tripling the size of its customer-facing organization, which includes sales, customer experience, and customer support, Philip Moyer, Google Cloud’s VP of industry sales, told Data Center Knowledge in an interview.

All of it has helped Google Cloud Platform GCP land new customers and expand the footprint of existing customers in Google data centers – customers including major brands, such as Lufthansa, Mayo Clinic, Sabre, and Lowe’s, he said. In February Google’s parent Alphabet disclosed its cloud revenue for the first time, saying the cloud business (which includes GCP and G Suite) earned $8.9 billion in revenue in fiscal 2019, a 53 percent increase from the prior year.

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“We’ve made great progress,” Moyer said.

While Google Cloud is investing in its own professional services and customer support team, its executives say a key part of their enterprise strategy are partnerships with professional services companies, such as Accenture and Deloitte, and managed service providers, such as Rackspace, Bespin, and Infosys.

Google has seen a 250 percent year-over-year increase in partner-influenced revenue and a 13-fold increase in new customers won by partners, Carolee Gearhart, Google Cloud’s VP of worldwide channel sales, told us.

“Our partnerships are core to how we scale our growth among larger enterprises,” she said. “You are going to see us double down with partners who are able to solve complex enterprise-scale challenges, helping them accelerate customer migration to the cloud, and delivering verticalized solutions that partners can sell, service, and support on Google Cloud.”

‘A Third Contender’

The aggressive moves Oracle veteran Thomas Kurian has made since taking over as Google Cloud CEO in 2018 are beginning to the bottom line. But while Google has seen its cloud revenue skyrocket, so too have its chief rivals, AWS and Azure.

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In April Amazon announced that AWS revenue had reached $10.2 billion in the first quarter, up 33 percent from the previous year. In comparison, Google said its 2020 first quarter cloud revenue was $2.8 billion, up 52 percent. Microsoft doesn’t break out Azure revenue, but that same month it had jumped 59 percent in what was its fiscal 2020 third quarter.

Google still has a lot of catching up to do. In the global cloud infrastructure services market, which reached $31 billion in the 2020 first quarter, AWS led the pack with 32 percent market share, followed by Azure with 17 percent. GCP is a distant third, tying Alibaba Cloud with 6 percent market share, according to Canalys.

Analysts say Google is making all the right moves to improve its competitive position in the enterprise cloud market. Jean Atelsek, a research analyst at 451 Research, said some managed service providers she has spoken with have told her that more enterprise customers have been showing interest in Google.

“AWS and Azure are clearly in front with market share, but Google has kept itself in the game, even though it came in late,” Atelsek said. “Google is on the lips of everyone as a third contender.”

Historically, Google has had good technology and a fast network, but its engineering-focused culture has made it hard to gain traction in the enterprise market. The company didn’t have the enterprise relationships necessary to win those deals – something Microsoft excels at because of its many long-standing relationships with enterprises.

“Microsoft has a well-oiled sales machine and an army of partners to help them in the enterprise. It’s not just products, it’s relationships,” Atelsek said.

AWS, which had the first-mover advantage in the cloud, also has built a strong partner program and is very responsive to customer needs, she said. Four to five years ago, it also hired a strong sales team that understands how corporate IT works and pulls in partners to help win deals, Larry Carvalho, research director of IDC’s Platform as a Service practice, told DCK.

The three cloud giants all use the same playbook to attract enterprise customers. They all have dedicated sales teams and offer in-house customer support. They also have small professional services teams but largely rely on partners to help customers migrate to the cloud, Carvalho said.

“All three providers don’t have much in house,” he said. “Microsoft may have more than Amazon or Google, because they launched a joint venture with Accenture called Avanade.” The difference is that Google started from a position far behind.

Emphasis on Openness and Multi-Cloud

Google Cloud executives say they are making significant investments in the enterprise capabilities that customers value most: security, compliance, scalability, and openness. GCP considers its longstanding support for open-source and multi-cloud solutions a big differentiator, Moyer said.

“Google’s multi-cloud strategy is unique and really resonating with enterprise customers,” he said.

Central to that strategy are Kubernetes, the container orchestration technology Google built and open sourced that’s taken over the container market, and Anthos, Google’s platform that enables its cloud customers to run applications atop Kubernetes across multiple public clouds – including those of its competitors – and in their own data centers.

Soon after GCP announced Anthos, in 2019, Microsoft rolled out a similar multi-cloud solution called Azure Arc.

Microsoft’s solution is “similar in that it’s supposed to run both containers and virtual machines on premises and off premises and on multiple clouds,” 451’s Atelsek said. “But Google is further along with Anthos.”

AWS has a weaker multi-cloud story. It also has its own Kubernetes service, but it’s always taken the position that customers don’t need anything but AWS, she said.

To meet customer demand for hybrid cloud, AWS developed Outposts, AWS-designed hardware that runs AWS compute and storage services on premises, fully integrated with its public cloud. “That was their accommodation for the notion that not all their customers are ready to move everything to the cloud,” Atelsek said.

AWS did not respond to multiple requests for interviews. Azure declined to be interviewed for this story.

Sales, Services, Partnerships

Google Cloud is currently investing heavily in sales, services, partner, and operations teams to help enterprises in their digital transformation and shift to the cloud, Moyer said.

There are now sales teams that specialize in the specific industries Google is targeting. The company has simplified its contracting and sales processes to make it easier for customers to begin using GCP, he said.

The cloud unit has also established a customer service organization, grown its network of regional support centers, and launched a new “premium support” service that provides enterprise customers with a 15-minute service level objective for GCP and G Suite, he said.

As for its in-house consulting services, Google Cloud has expanded its Technical Account Management (TAM) team, which helps customers develop a cloud strategy and provide advice and implementation guidance.

The company also has a Professional Services Team but avoids competing with its partners. The team is intentionally kept small, because Google wants to grow its enterprise customer base as well as its partner relationships, Moyer said.

GCP is continually adding new partners. In March, for example, it signed on T-Systems, a Deutsche Telekom consulting subsidiary, to provide consulting services, migration support, and managed services to enterprise customers.

Customers can engage directly with Google Cloud’s own consultants if they prefer. But many customers work directly with GCP partners, who then pull in Google Cloud’s consulting organization or the TAM team as needed, Moyer explained.

“We lead with partners so we can bring a ‘best of’ to our mutual customers,” Gearhart said. “Our MSPs help customers architect and manage Google Cloud workloads and provide engineering and support resources, typically layered with vertical expertise.  They can bring in Google Cloud customer engineering or support to bring the best of Google to customers.”

Targeted Solutions

Google Cloud is currently building out its portfolio of industry-specific solutions. Offerings already available include a contact center AI solution for banks, a healthcare API management solution, and a Black Friday and Cyber Monday solution for retailers. Other targeted solutions are forthcoming, a Google spokesperson said.

GCP’s partners also provide key industry solutions, Gearhart said. In retail, partners like Deloitte, Accenture, and TCS have leveraged Google’s data, AI, and machine learning capabilities to launch retail solutions that offer personalization, merchandising, inventory management, and demand forecasting, she said.

In financial services, KPMG and Deloitte have built commercial lending and property insurance solutions. In healthcare, Accenture has “re-platformed” its entire suite of life sciences solutions, called INTIENT, to run on Google Cloud, while Deloitte has rolled out healthcare and life sciences solutions, called ConvergeHealth, Health 360, and Vega 360, leveraging GCP’s infrastructure, machine learning, and analytics capabilities.

“We have had significant traction in healthcare and life science, where partners have been able to bring the unique capabilities of Google Cloud to solve real customer challenges,” Gearhart said.

‘Three Years Behind’

IDC’s Carvalho agreed with Atelsek’s assessment that Google had always been an engineering company, ill-equipped to sell into the enterprise. But GCP’s focus on industry-specific solutions, partnerships, new hires to strengthen the sales team, and improved marketing will help it gain more enterprise customers, he said.

“We are now seeing more messaging on how you can modernize an app to run on Google Cloud. In the past, those messages were not quite there,” Carvalho said. “They are moving to a more enterprise-friendly approach.”

Acquisitions also help. Google, which has greatly expanded its global data center footprint and now has 24 cloud availability regions, is investing in tools to help organizations migrate to the cloud. In February, for example, it purchased a company called Cornerstone Technology, whose tools help companies migrate their mainframes to Google Cloud, Carvalho pointed out.

Overall, it will take time for GCP to grab more market share, he said. “They are at least three years behind Amazon and about the same with Microsoft. It’s not easy to get the corporate knowledge.”

One major benefit Google Cloud has is that there is a set of enterprise customers that won’t use AWS, because Amazon competes with them in retail. Google can also gain business from customers that don’t want to be locked in to one provider and want to diversify, Carvalho said.

“If companies choose Azure, for example, the corporate-risk folks don’t want to  put all their eggs in one basket, so they pick another alternative. Google can grab customers that way,” he explained.

Google executives are optimistic that their strategy – and the investments they’ve made – will work against AWS and Azure.

To summarize Google’s advantages, according to Moyer: a rich history of using machine learning and data analytics, a commitment to open source and open technologies, a multi-cloud approach, a fast software-defined network, and a focus on enterprise-class security and compliance.

Moyer also highlighted the fact that Google doesn’t compete with retailers: “Many customers are worried about competing with their cloud provider. But Google Cloud is committed to being a great partner to our customers in each industry and being a great partner to our customers’ partners.”