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Google declares report on alleged public cloud exit discussions ‘inaccurate’

A US media report claiming senior management teams at Google and its parent company Alphabet discussed exiting the public cloud market in 2018 has been described as “not accurate” by the firm

Google Cloud has dismissed reports that its parent company’s senior leadership team discussed pulling out of the public cloud in early 2018 because they were unhappy with its third-place position in the market.

According to a source-based, subscriber-only report in US tech publication The Information, a lengthy discussion took place in early 2018 between various senior leaders at Google and its parent company Alphabet about its cloud arm’s future.

The talks reportedly centred on who would be the best person to lead the company’s public cloud operations – which until early 2019 were being overseen by ex-VMware CEO Diane Greene – and what the company would need to do to gain a bigger share of the market.

The report further claimed that the discussions also touched on the idea of Google exiting the public cloud market completely, which would, presumably, result in the shutting of the Google Cloud business.

However, the end result of these discussions is alleged to have been the creation of a five-year plan, geared towards growing the business to such an extent that, by 2023, it will have overthrown either Microsoft or Amazon Web Services (AWS) and become a top two public cloud provider.

Analyst reports regularly place the Google Cloud Platform in the top three, in terms of public cloud market share, behind Microsoft and AWS.

According to analyst house Synergy Research Group’s most recent set of data, AWS leads the market with about a 40% share, followed by Microsoft with just under 20%, while Google hovers around the 9% mark.

If Google Cloud does not succeed in breaking into the top two by 2023, The Information report claimed that the business unit, which oversees both the firm’s cloud infrastructure and software-as-a-service offering G Suite, may see its funding revoked. 

In a statement to Computer Weekly, a Google spokesperson sought to dismiss the claim, stating: “Reports of these conversations from 2018 are simply not accurate.”

Either way, the Google Cloud organisation has undergone some big changes in 2019, with ex-Oracle product development president Thomas Kurian taking over as CEO from Greene in the early part of the year.

Since then, Kurian has spoken publicly about the next phase of the firm’s quest to ensure its cloud offerings are enterprise-ready, and the work that is going into positioning itself as “the easiest cloud provider” for organisations to deal with.

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During a press Q&A at the Google Cloud Next London event in mid-November 2019, Kurian also talked about the investments the firm is making in the sales and marketing side of its business, to support this goal.

He also described how it is taking steps to ensure its teams are talking to customers about cloud in the right way, with less emphasis on infrastructure matters, and more on the business problems of moving to the cloud that it can help them solve.

“We want to understand what [products] our customers are using, we want to understand how to upsell and cross over the products, and we want to understand the churn rate and turnover rate for customers,” said Kurian. “That’s a business conversation as opposed to a technology conversation, and we’ve shifted a lot of our sales organisation to be able to have that conversation with customers.

“We have a team of economists that run a team called Value Engineering, which explains the business value outcome for measuring, and has pricing associated with ensuring a successful [business] outcome, rather than just pricing it by how many cores of compute it is likely to take [to achieve something].”

He added: “We have also specialised our go-to-market organisation around industries. So, if you’re a CIO for a bank, you get someone who is only selling to banks and so understands the industry.”

On top of this, Google has also publicly committed to making a number of sizeable infrastructure investments at various points in 2019, including details of its plans to invest €3bn in expanding its datacentres across Europe over the next two years.

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