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Can Google really take on Amazon and Microsoft?

Does Google really stand a chance in the enterprise space or is it a case of too little, too late?

This article can also be found in the Premium Editorial Download: MicroScope: MicroScope: December 2015

Google’s cloud offensive has got people talking. Two weeks ago, the search giant announced that it was bringing in VMware co-founder Diane Greene to take charge of the company’s cloud businesses; a clear message that Google was ready to take a seat at the grown-up table.

Greene, a MIT-trained engineer and computer scientist and existing board member, brings a degree of enterprise pedigree previously absent in Google’s plans for cloud domination. She cofounded VMware with her husband Mendel Rosenblum in 1998, selling it five years later to EMC for a cool $635m.

Google’s heritage is rooted deeply in consumer focused online services – search, email, and the like. Google pays the bills primarily through advertising on each of these platforms. The announcement that Greene is to head up the corporate cloud business sent a clear message to Silicon Valley - Google has Amazon and Microsoft in its crosshairs.

“This new business will bring together product, engineering, marketing and sales and allow us to operate in a much more integrated, coordinated fashion,” said Sundar Pichai, CEO of Google.

“As a long-time industry veteran and co-founder and CEO of VMWare, Diane needs no introduction. Cloud computing is revolutionizing the way people live and work, and there is no better person to lead this important area.”

One of the big problems with Google’s cloud plans to date, is that the offerings have been quite disparate. On the one hand, it has its Google for Work and Google Apps product suites, competing with the likes of Office 365. On the other, it has its infrastructure business, competing with AWS and Azure. What it doesn’t have is a full stack approach that will appeal to the enterprise. As a result, Google has just a 3.6% share of the IaaS market.

By giving Greene carte blanche over all of the cloud divisions, she will have the power to create cohesive propositions, well suited to the enterprise environment.

Greene has a mountain to climb. AWS is now on pace for a run rate of $7.3 billion, an 81% year over year increase. And to think just last year, the industry was asking if Amazon’s cloud business would ever make any money.

It’s not just the executive appointment that is signaling an assault on the enterprise. Google is turning to the channel to help get the message out. Earlier this month, Google announced that it would wave the Google Apps license fees for new customers already tied into enterprise agreements with the likes of Microsoft, with all deals going through its channel partners.

Too little, too late?

Despite sending all the right messages, Amazon and its investors probably won’t be too fazed.

Piper Jaffray analyst Gene Munster told CNBC that Google’s late arrival would prove an unbridgeable chasm.

"AWS has the development community behind it," he said. "They give a ton of features away to small businesses to get on AWS. It's growing at a wicked rate. And while it's important that Google is there, the reality is this is going to be a placeholder business for them longer term."

There is some hope for Google in the productivity applications market. The Mountain View, California-based company recently announced that over 2 million businesses are now paying to use some part of its online productivity suite. Still a drop in the ocean compared to active Office 365 subscribers, but at least Google is making in roads. 

Ultimately, the company’s success in the enterprise will rely heavily on the channel and whether Greene can utilise Google’s vast resources to create propositions that will be valuable to both partners and customers.

 

 

 

 

 

 

 

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I don't see ant reason why not. There is always room for competition and with the initial problems addressed by the others, they wont mkae the same mistakes.
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I agree. I think that they can. They have proven themselves to be very versatile and have had successes in many different areas. 
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