Google Cloud CEO Thomas Kurian (right) takes the stage as Alphabet CEO Sundar Pichai leaves at the Google Cloud Next event in San Francisco on April 9, 2019.
Michael Short | Bloomberg | Bloomberg | Getty Images
when Google hired Oracle’s When Thomas Kurian was set to run his cloud business four years ago, Internet search companies had clear reasons to trust a career enterprise software executive.
Google was a consumer goods company.Despite spending years trying to compete Amazon and microsoft Efforts to win marquee deals by selling cloud-based storage, computing, and other services to large corporations fell short.
Google is still number three in the US cloud infrastructure market, but its business is growing rapidly and is ultimately contributing positively to Alphabet’s revenue as of Q1. Earlier this week, Alphabet said Google’s cloud division generated his $191 million operating profit after losing a combined $4 billion in 2021 and 2022. Revenue rose 28% from the year before to bring him to $7.45 billion, well ahead of Google’s struggling advertising business.
“We weren’t in a very good place when I joined,” Kurian told CNBC in an interview after the results were announced. companies did not accept us as a viable partner.”
Finding the core problem was not difficult. Google was a company of software developers and data scientists trained to build advanced technologies. But they had no real idea of how to build them, market them, and sell them to the business world. VMware According to co-founder Diane Greene, critics say Google’s cloud business wasn’t mature enough to handle the enterprise despite making significant investments.
The cloud division includes Google Cloud Platform, which competes with Amazon Web Services and Microsoft Azure, and the Google Workspace productivity software bundle, which directly competes with Microsoft Office.
Kurian says he spent a lot of time in the early days to see how the technology worked and where improvements were needed. From 4am to 7am he was reading technical design documents. In the evening he played with the product.
“We’ve transformed the organization from thinking that we’re building technology to thinking that we’re building products and solutions,” says Kurian.
This is a market Google has been trying to win for years, as companies rapidly push workloads from their own data centers to the cloud. Google not only wants to win the storage and computing business, but it also wants those companies and other developers to use cutting-edge technology, especially since artificial intelligence systems are getting more attention. increase.
Expansion came at a cost. In nearly every quarter from the beginning of 2017 to her third quarter of 2020, her finance chief Ruth Porat told analysts that cloud was the biggest driver of headcount growth in both sales and technology roles. You say it’s a field. Google also expanded its business by acquiring data analytics software startup Looker for $2.4 billion in 2019 and security software vendor Mandiant for $6.1 billion last year.
The cloud division now makes up more than 25% of Alphabet’s full-time workforce, CNBC reported earlier this year.
Kurian’s focus includes developing product roadmaps, introducing new pricing models, enhancing customer service, and streamlining infrastructure, which is key to reducing costs.
“Over the past four years, we have reduced our machine provisioning and deployment cycle time by a factor of five,” Kurian said. “There are 100 different projects going on to optimize resource consumption.”
Customer Success is a widely adopted methodology in the enterprise software world, adopted as a way to keep customers happy and wanting to buy more, emphasizing retention and limiting churn. increase.
Google has built a Customer Success Mode to work more closely with its clients, building a community of 100,000 partners. The company has hundreds of senior engineers sponsored by key customers to see how their products are being used and to understand what needs to be changed.
Kurian says: “Twice a year he gives out awards to teams that do a great job helping their customers.”
In 2020, Google announced productivity tools under the brand Google Workspace. We also issued a new price level, so organizations of different sizes started paying different prices.
Google’s cloud division turned profitable, but the numbers are fuzzy.
Last week, Alphabet re-announced operating profit for its cloud and other segments, resulting in lower cloud losses in 2021 and 2022. Restated figures show the Cloud segment’s operating loss for the fourth quarter was $186 million, compared to $480 million prior to restatement. for example.
Cloud numbers are also benefiting from the extended useful life of data center equipment. However, Kurian said competitors are making similar depreciation adjustments.
“We were always going to make a profit,” he said. “If you draw a line, you can see the curve.”
“Corporate Discipline”
Under Kurian’s leadership, Google’s cloud group had to contend with executive turnover. Javier Soltero, the head of Workspace, retired in July.Rob Enslin, Former Top SAP He joined Google in 2019 as President of Global Customer Operations and left last year to become Co-CEO. UiPathKirsten Cliphouse, who was president of the Americas for the Cloud Group, will retire in 2023 after four years at the company.
However, the number of employees continues to grow, as does the company’s roster of large customers. Over the past three years, Google has signed deals with his Coinbase, Deutsche Bank, Ford, General Mills and SpaceX.
And our existing clients are using Google even deeper.
home depot said it would adopt Google’s public cloud in 2016, when Greene was CEO. Fahim Siddiqui, his CIO at Home Depot, said the home improvement store has added value to his Google platform since he joined from Staples in late 2018. increase.
“He took corporate discipline,” Siddiqi said of Kurian. “It’s one thing for him to deliver the capabilities of the cloud, an interesting set of technical features. Availability, reliability, management, and the discipline of being a proven partner in this journey.”
Home Depot uses its own data centers and colocation facilities, as well as cloud services from Google and Microsoft, Siddiqui said. Google is the company’s primary cloud computing partner, and last year Home Depot began moving its merchandising applications to Google’s cloud, he said.
Kurian’s big partner move in his early months as CEO involved what he called a “integrated open source ecosystem.” was an alliance with elasticity, MongoDB Five other companies sell distributions of open source software.
Stocks in Elastic and MongoDB rose as Kurian spoke at Google’s Next Cloud conference about how clients get one bill while using other companies’ products managed in Google’s cloud console. bottom.
Dev Ittycheria, CEO of MongoDB, which sells cloud database software and services, said:At that time, AWS trying Adds some open source MongoDB database software features to the DocumentDB service.
Ittycheria said the open source initiative was Kurian’s idea and praised how Google coordinated the partnership. In 2021, Google announced that he would reduce the percentage of revenue he keeps on marketplace transactions from 20% to 3%. Ittycheria said MongoDB is “very happy with the contract structure.”
Jeffrey Flaks, CEO of Hartford HealthCare, which has 37,000 employees, said one of the reasons Connecticut’s health care system is adopting his health care system: moved Moving from an on-premises data center to Google Cloud Platform last year was another big hospital’s choice of Google. Another factor in choosing Google over the AWS, Azure and Oracle clouds, he said, was Kurian.
“His personal involvement, his knowledge of our intentions and desires, and frankly his personal problem-solving skills made Google Cloud stand out in this process.”
Will Grannis, head of technology at Google Cloud, said Kurian’s commitment to improving the division’s offerings was immediately apparent. Grannis recalled one day in late 2018, after Curien was picked for the role, before he actually started working.
Kurian stopped by Google’s offices in Sunnyvale, California and was introduced to employees. After the meeting, Grannis found himself alone in the elevator with Kurian, and they quietly entered and exited the elevator. We started talking about a container management technology called Kubernetes.
According to Grannis, Kurian said: “We want to understand how we can improve the developer experience.”
The conversation lasted an hour.
clock: Google Cloud is profitable
