Next OnAir 2020 reveals strategic shifts for the company
Google kicked off its Google Cloud Next OnAir event on 14 July, the first of a nine-week series being presented online owing to Covid-19.
The health crisis has prompted dramatic changes in every industry and every company, including Google Cloud. All eyes are on the hyperscaler as the current bronze medallist in the cloud computing race, to see how it can close the gap on Amazon Web Services (AWS) and Microsoft. Backed by some important strategic shifts since CEO Thomas Kurian took the helm in January 2019, a more attentive Google Cloud is emerging with a nuanced and differentiated strategy. This is befitting of a strong challenger, but most of all, it matches the changing market requirements of a post-pandemic world.
Let’s take a look at some of the leading themes and announcements in Thomas Kurian’s opening keynote this year and assess what they mean for Google’s long-term position in the cloud market.
Vertical Clouds: Keynote Vision and Business Update
A lot has happened since we last examined Google Cloud’s strategy (see Google Cloud CEO Kurian Reveals New Directions at Next’19) and the hyperscaler has had a solid start to 2020. Parent company Alphabet reported the business achieved revenue of $2.8 billion in the first quarter of 2020, an increase of 52% annually, giving Google Cloud a yearly run rate of over $10 billion, roughly a quarter of the annual revenue of AWS. The firm’s growth highlights the role it has played in helping customers to respond to the pandemic, whether by enabling remote working using G Suite, which now has 6 million customers, or by accelerating their digital transformation through equipping more than 750,000 developers with its cloud platform, data and artificial intelligence tools.
In his keynote presentation, Thomas Kurian reinforced this progress as validation of the company’s mission to accelerate every organization’s ability to digitally transform and reimagine their business through data-powered innovation. He outlined the three elements underpinning the firm’s strategy: its provision of distributed infrastructure-as-a-service through Google Cloud Platform, a digital transformation framework enabled by offerings such as the Anthos hybrid multicloud solution and G Suite, and products for specific industries including retail, financial services and healthcare (see image below).
The emphasis on industries is especially important. We believe 2021 will be the year of vertical clouds as the hyperscalers make themselves more relevant to entire industries forced to transform as a result of the pandemic. Google joins the likes of IBM, and to an extent AWS and Microsoft, as an early mover with its stated intent in this direction.
One of the most important industries to watch in this regard is telecommunication, where Google Cloud is stepping up its efforts following moves such as Anthos for Telecom and the articulation of its mobile edge strategy earlier in 2020. Ahead of Next OnAir, the company announced a win with Verizon for its Contact Center AI service, arguably one of the star performers during the pandemic (see AI and The Year Ahead: What Now?). The win highlights that Google’s focus on vertical markets is beginning to pay off, with more upside to come as the telecom industry reshapes around cloud and 5G transformation.
Confidential Computing Enhances Security and Trust
The first keynote theme tackled by Thomas Kurian was arguably its most important: security and trust, an area in which Google Cloud has been investing heavily over the past several years.
As part of this, the company announced Confidential Computing, which enables the encryption of data while it is being processed, extending its encryption capabilities from data in motion and at rest. It also announced Assured Workloads and Assured Workloads for Government, which help automate compliance and ensure applications are configured to adhere to specific regulations such as those mandated by the US Department of Defense and the FBI Criminal Justice Information Services Division, and the Federal Risk and Authorization Management Program (FedRAMP).
These are important steps on a long road to improve Google Cloud’s security story, an essential part of building increased trust among governments and enterprises. We believe the depth of security solutions on offer is intrinsically linked with the trust customers have in a cloud provider. This is particularly important for Google Cloud as antitrust lawsuits against its parent Alphabet continue to escalate globally.
The firm must continue to bang the drum about its approach to privacy, and prioritize communications and investments in security overall. One of the enduring features of the pandemic is the elevated importance customers now place on their trust in their cloud provider. Google’s investments and, more importantly, its increasingly transparent processes, are vital to help address this and the mixed reactions to Google Cloud that have been provoked by the challenges facing its consumer business.
Anthos Continues to Expand
Another strategically vital area is Anthos, Google Cloud’s managed application platform for the delivery of cloud services in hybrid and multicloud environments, which launched at Google Cloud Next in 2019. The latest updates saw Anthos extending support to “bare metal” hybrid environments, at the edge and on other cloud platforms. These platforms now include Microsoft Azure in preview, adding to support for AWS at launch. Additionally, Anthos Service Mesh, due in the coming months, will allow for greater levels of consistency for apps running virtually by managing security and policy.
Anthos’ progress has been rapid over the past year. At launch, the platform was mainly focussed on large-scale container-based development in Kubernetes on different infrastructure environments, most notably on-premises and in AWS. Since then, it has added bare-metal support for inside data centres, virtual machines, container clusters and multicloud orchestration, as well as new governance and security features. The additions make Anthos more attractive for the thousands of customers that want depth in cloud services, but do not want to be locked into a single cloud environment.
We’re now seeing next-level cloud services coming into the platform as well. These bolster Google Cloud’s multicloud vision and give it unique grounds for differentiation in areas such as edge and 5G solutions, as well as data analytics with the arrival of Big Query Omni.
Big Data Query: Data Analytics Goes Hybrid Multicloud
The unveiling of Big Query Omni in private alpha, a new multicloud analytics solution powered by Anthos, was arguably the most eye-catching news from the keynote. It allows users to query data in multiple cloud and data centre environments, including in AWS S3, and soon Azure, without having to move it to Google Cloud and without leaving the Big Query interface. It’s designed to address the friction and cost in moving data from other cloud providers to Google Cloud or in working on data stored with various cloud providers.
The pandemic has elevated the importance of data as the foundation of enterprise survival and growth, and Google Cloud has made significant progress in this area, building on its Looker and AppSheet acquisitions as well as its Apigee platform.
In building what is in effect a hybrid multicloud data architecture, Google is really starting to differentiate its cloud strategy. Under Thomas Kurian, the company is orientating around rapidly expanding hybrid multicloud services. Big Query Omni also provides a basis for its machine learning tools, which are likely to follow the same hybrid multicloud trajectory. Extending Google’s AI across clouds is a trend that we expect to feature in future Next OnAir sessions, and among customers during the coming year.
While the market is in this early transition, Google Cloud must be careful not to add complexity for customers and developers already struggling with cloud computing’s complications. Although its multicloud and data strategy is accelerating rapidly, it has competition. Microsoft’s Azure Arc is a similar solution and the move will expose Google Cloud to other players such as Cloudera and IBM RedHat.
A New Vision for G Suite
The day after Next OnAir opened, Google Cloud revealed its new vision for G Suite. The news was originally scheduled for the following week’s session on productivity and collaboration but was brought forward as a result of leaks to the media.
Launched as a “new home for work”, an integrated workspace in G Suite brings together e-mail, chat, voice and video calling, document collaboration and task management into a single, unified experience designed to reduce the switching between different collaborative features and applications that had been the hallmark of the suite in the past.
Over the past year, Google has been ramping up investment in its collaboration tools, including announcing in April 2020 that Meet would be made free for everyone (see Google Makes Meet Free for All). In recent weeks it has unveiled updates such as the integration of Meet and Chat features in the Gmail web interface.
G Suite played a central role in helping organizations to shift to remote work during the Covid-19 pandemic, and is playing a more strategic role in the broader Google Cloud portfolio as a result. We’ll be tracking its progress in the coming months and expect to see many more updates in this area as it seeks to accelerate its challenge to Microsoft in the collaboration and productivity arena.
The Final Take: Google Cloud’s Priorities Are Straight
The Next OnAir event coincides with a critical moment in Google Cloud’s history. The company faces mounting pressure to show progress in the enterprise market following significant investments in infrastructure, sales personnel, acquisitions and market education. The health crisis has prompted a dramatic acceleration in cloud services and digital working, and companies are emerging from the pandemic with more clarity and purpose in their digital transformation projects.
In this regard, Google Cloud is prioritizing the right things: security and trust, a greater transparency in its operations, remote collaboration, hybrid and multicloud flexibility, industry specialism and, above all, innovation that delivers rapid business and societal value.
Put simply, if AWS aims primarily at being the developers’ cloud and Microsoft the trusted cloud, Google is arguably emerging as the innovators’ cloud. Backed by some gutsy moves by its CEO, it’s responding to changing customer requirements with a more nuanced, considered and differentiated strategy that’s ultimately friendlier to the enterprise and befitting of a strong market challenger.
Thomas Kurian ended his session claiming he’s hopeful about reimagining business as we recover from the pandemic. There’s still a lot to play for in the cloud computing race, and the big hope for Google Cloud is whether this approach will put a meaningful dent in the market share of its rivals in 2020 and beyond.
It may just do so.
A version of this article was first published by CMSWire on 21 July 2020.
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