(Another installment in our series exploring the primary challenges faced by the Cloud Wars Top 10 vendors in 2020.)
One of the most intense 2020 battles in the Cloud Wars will be #6 Google Cloud’s resurgent efforts to snatch IaaS and PaaS market share away from #2 Amazon while also creating an entirely new category optimized for Google’s strengths.
That’s why I believe Google Cloud’s top challenge for 2020 will be creating a new breed of data-driven enterprise applications that exploit Google’s capabilities in not only data but also ML, AI, analytics, and emerging digital-business processes.
If Google Cloud is successful in creating and offering these new business-optimization solutions, it will gain not only a new high-growth business but also a set of powerful capabilities that will sharply differentiate it in the minds of customers from Amazon’s AWS.
Look at a few of the many similarities between AWS and Google Cloud:
- both have enormous credibility in modern digital technology infrastructure;
- both have made huge commitments to ML and AI;
- both have become world-class practitioners of analytics;
- both have expertise in scaling out and scaling up that few companies can match;
- both are parts of huge corporations with market valuations close to $1 trillion; and
- both have, through those parent companies, enormous real-time awareness of global consumer trends and data.
Before getting into Google’s likely intentions, I want to be very clear here at the outset about the relative sizes of the companies’ cloud businesses. Amazon’s AWS unit continues to be wildly successful and will post calendar 2019 revenue of more than $32 billion. That will be about 3X Google Cloud’s revenue for the same period.
So at least for now, we’re not talking about a battle of equals. Amazon is the category creator and unquestioned leader in public-cloud IaaS. Google is a phenomenally capable and fast-growing striver whose 2019 cloud revenue was probably about $11 billion versus Amazon’s likely $33 billion.
But Google also happens to be one of the only companies on Earth that can match Amazon’s financial resources.
And since Thomas Kurian took over as CEO of Google Cloud a year ago, the company’s undergone a massive transformation in strategy (from tech-centric to customer first), product alignment, and go-to-market capabilities, including tripling the size of its global sales team.
Throughout last year, Kurian emphasized Google Cloud’s full commitment to the areas where it had traditionally been strong, particularly IaaS, cybersecurity, and data management.
But Kurian also promised that Google Cloud, as a top priority within the customer-first culture he champions, would develop two new types of software solutions to address strategic pain points for customers. Namely:
- a platform to help customers create the hybrid-cloud and multicloud IT environments that have become the norm in the new world of digital business; and
- a completely new type of enterprise applications that address the new processes and opportunities in that new world of digital business. Kurian calls them “business-optimization solutions.”
The hybrid-cloud and multicloud platform is called Anthos, and Google Cloud unveiled it at Next in April.
For the new type of enterprise applications, Kurian is clearly avoiding the traditional categories of enterprise apps—CRM, HCM, ERP—and is instead pursuing an entirely unmapped area centered on the new digital processes companies are developing to underpin their new digital-business imperatives.
The vision for these new high-level solutions was one of the main reasons for my selecting Kurian as the Cloud Wars CEO of the Year for 2019 last month. (And be sure to check out our exclusive video interview with Kurian from December.)
And because I believe that vision will become such a powerful capability for businesses looking to remake themselves and thrive in the digital economy, I’d like to share that vision with you in Kurian’s own words.
During our December discussion at Google Cloud headquarters, Kurian offered these perspectives on what he called these new “solutions”:
We allow customers to keep the business process layer [ERP, HCM, CRM] as-is, and extract from the business process layer the data, do analytics and optimization, and feed it back in.
We’ve done work with many, many of the top retailers in the world around supply chain, inventory planning, and optimization. And it’s partly driven by– there’s a lot of moves to improving product cycles, this notion of fast retailing, so being able to have faster product cycles. There’s many, many more points in which you’re maintaining inventory because of your stores becoming points of inventory. And then the demand planning process that ties many more SKUs which have shorter life cycles with many more points of inventory can lead to an extraordinarily expensive cost of inventory. So we tell customers, don’t replace your current supply-chain planning systems. Keep them as-is. But extract the data from that, put it into our analytics and machine learning platform. And we’ll build you a much more accurate and more sophisticated demand-planning solution.
Similar thing: there’s lots of companies in financial services that do anti-money laundering. To be honest with you, the solutions there are largely rules-based. And those rules lead to lots of false positives, which are expensive because of regulatory requirements on reporting those false positives. So many of the financial institutions are now using solutions we have developed around anti-money-laundering which are more AI-based.
The breakthrough, Kurian said, is the infusion of new AI technologies and capabilities that transcend the limitations imposed by traditional approaches and technologies, thereby creating an entirely new type of “solution”—or what I suggest could be called a digital-business application.
And so what we mean by that is, rather than have a static rule set, we build a more dynamically evolving neural network-based solution to detect fraud. You don’t have to replace your core banking systems or your KYC [Know Your Customer] systems. You use this as a more sophisticated way of detecting fraud.
And so our aspirations certainly are to provide solutions and to move up the value chain but not to build process-centric applications but to become what we call the business-optimization engine. Rather than re-implementing a business process, you can keep your business process application the way it is.
But we’re building business-optimization solutions that allow you to take data out of the application, add more sophistication to it, and then improve your organization’s financial performance as a result.
And the ultimate objective for these solutions is to help Google Cloud’s customers deliver fabulous experiences to their customers.
Everybody wants to create that magic moment with their customer…
And so creating that experience with a customer where every customer feels like the company that’s selling something to them, that’s marketing something to them knows them personally and helps them make the right decision, I think, is super important. And I think we’re helping a lot of institutions around the world in many, many different industries and many countries do that in new ways using the technology that we offer….
So our approach has been, create a solution that helps people really fundamentally improve the experience that their consumers have when they call the contact center without them having to have an army of people and expertise themselves.
And we want to enable organizations to be bold and to be brave in accepting the technology change by being a partner with them and providing them with the right solutions so that in the face of this exhilarating change they don’t freeze and feel afraid of embracing the technology.
It’s an elegant and powerful vision. It has the potential to not only deliver great value to Google Cloud’s customers, but also differentiate Kurian’s company sharply from Amazon and AWS in the minds of business customers.
If Kurian’s successful in this bold new effort, it will surely mean that Google Cloud will continue to rise in the Cloud Wars Top 10 rankings.
Cloud Wars: Outlook 2020
The Top 10’s Biggest Challenges
|1. Microsoft — Can it sustain a reputation for reliability for the Azure cloud?|
|2. Amazon — Can it win vs. Oracle Autonomous DB? AND vs. Microsoft Azure?|
|3. Salesforce — Can Marc Benioff win the battle to redefine CRM?|
|4. SAP — Can it sell the marketplace on Experience Management / HXM?|
|5. Oracle — Larry Ellison is talking a big talk—can Oracle back it up?|
|6. Google — Can it outflank Amazon through software skills and $$$?|
|7. IBM — coming soon|
|8. Workday — coming soon|
|9. ServiceNow — coming soon|
Disclosure: at the time of this writing, Google Cloud was among the clients of Evans Strategic Communications LLC and Cloud Wars Media LLC.
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