Credit: Shutterstock photoWhile Google is well-known for its search engine, Gmail, YouTube, advertising service, Apps and Android, it has long been perceived that the technology giant hasn't focused on its cloud business - an image that Google is now committed to change.
In November 2015, Urs Hölzle, Senior Vice President for Technical Infrastructure at Google said, “How the cloud of 2020 will be drastically different from the cloud of 2015” at the Structure conference in San Francisco. While acknowledging that Google lags behind Amazon and Microsoft in terms of market share, Hölzle said, “My goal is for us to talk about Google as a cloud company in 2020 because our revenue is bigger than the ads revenue and it’s a realistic possibility.”
Cloud computing is a pay-for-use system that allows companies or individuals to use core infrastructure, storage, data analytics, programs over the internet. “Google Cloud Platform is a set of modular cloud-based services that allow you to create anything from simple websites to complex applications.”
Market Share
According to a report by Synergy Research Group, Amazon Web Services (AWS) by Amazon (AMZN) continues to rule the cloud infrastructure services market with a substantial worldwide share of over 31% during the full year 2015. Although Microsoft (MSFT) and IBM (IBM) are second and third, their market shares are far below that of Amazon with 9% and 7%, respectively. Google and Salesforce hold just about 4% of the market share each.
Although Microsoft Azure (124% YoY in Q4 2015) and Google Cloud Platform (108% YoY in Q4 2015) have recorded the highest growth rates among the market leaders, they aren’t able to challenge AWS yet, which continues to grow steadily (63% YoY in Q4 2015) and increase its market share. Meanwhile, IBM Cloud continues to lead within the private and hybrid services segment according to Synergy. Overall, the market for cloud infrastructure service revenues reported revenue exceeding $23 billion in 2015, and it grew by 52% from the previous year.
According to Gartner report, “The worldwide public cloud services market is projected to grow 16.5% in 2016 to total $204 billion, up from $175 billion in 2015. The highest growth will come from cloud system infrastructure services (infrastructure as a service [IaaS]), which is projected to grow 38.4% in 2016. Cloud advertising, the largest segment of the global cloud services market, is expected to grow 13.6% in 2016 to reach $90.3 billion.” As per a recent report by Market Research Media, “The global cloud computing market is expected to grow at 30% CAGR, reaching $270 billion in 2020.”
Google’s Efforts
Google, a subsidiary of Alphabet (GOOG, GOOGL), is working to catch up to market leaders to establish a place for itself in the cloud space. Google believes that the area of cloud computing offers great potential for growth. According to Google’s official blog, “Only a tiny fraction of the world’s data is currently in the cloud – most businesses and applications aren’t cloud-based yet. This is an important and fast-growing area for Google and we are investing for the future.”
One of the significant steps was getting Diane Greene onboard Google. The co-founder and CEO of VMWare, Greene was roped in to lead a new team combining all of Google’s cloud businesses, including Google for Work, Cloud Platform, and Google Apps.
Google will be adding two new regions in 2016 to expand its Cloud Platform locations - one is an East-Asia region in Tokyo, and the other is the US Western region in Oregon. These two regions are just a start, as Google plans to add a dozen Google Cloud Platform (GCP) regions to its network through 2017.
The technology giant has been able to add some high-profile enterprises on its list of customers; Best Buy, Disney Consumer Products & Interactive Media, Domino’s Pizza, FIS Global, Spotify, Macy’s, Pocket Gems, Wix, Atomic Fiction, Heineken, Home Depot, Electronic Arts, Sony Music, HTC, Coca Cola, Snapchat and Apple are few of the companies included.
Last week (March 23-24), Google held GCPNext16 (Google Cloud Platform Global User Conference) where some interesting features and plans for cloud were revealed. Some of the announcements include:
- Google took Cloud Machine Learning service mainstream, “giving data scientists and developers a way to build a new class of intelligent applications.” Google cloud Machine Learning is already in use for Google photos (image search), app (voice search), translate, and inbox (smart reply), “the platform is now available as a cloud service.” With this, Google comes on par with competitors like AWS, Azure and IBM, who have already initiated projects with machine learning for cloud.
- Google introduced Google Stackdriver, which it describes as, “a unified monitoring, logging and diagnostics service that makes ops easier.” Customers can use Google’s stackdriver not just on Google Cloud Platform, but also on Amazon Web Services (AWS) or both together.
- Google has created a set of new Identity and Access Management (IAM) roles to redefine the control access to Google cloud resources. According to Google, “IAM allows you to assign permissions to your Google cloud resources through IAM roles, which are defined as a collection of permissions - owner/editor/viewer gave users permissions to all resources in a project.” It is currently in beta.
- Google’s cloud customers will be able to get answer to the question of “who did what, where, and when?” on the Cloud platform, something very important from the point of view of security and operations. The service will get enabled before the end of May 2016.
- In order to allow customers to control and manage their own encryption keys, Google announced the beta of customer-supplied encryption keys last July, which should be available soon. In addition to encryption on server side, Google offers its clients to encrypt data on the client side before placing it on cloud storage i.e. it allows customers to bring own encryption keys to secure storage resources (currently in beta).
- Google introduced the Cloud Speech API, which allows developers to apply powerful neutral network models in an easy-to-use API format to convert audio to text. The speech to text conversion is powered by machine learning and offers automatic speech recognition, global vocabulary (over 80 languages and variants), streaming recognition, inappropriate content filtering, real-time or buffered audio support, noisy audio handling, integrated API, and so on.
- Google recognizes the vital role of open source software and is committed to the same; it has over 20 million lines of code in over 900 projects under open source licenses. Taking it further, Google open sourced TensorFlow, its latest machine learning system, among others.
- To push big data and analytics on cloud, Google announced some exciting features for BigQuery which is, “a fast, economical and fully managed data warehouse for large-scale data analytics.” The announcements include a drop in price for long term storage by 50% after 90 days, soon to be released automatic table partitions to make storage and handling of data easier, a new capacitor storage engine, which would make queries faster up to 10x, and Poseidon, which would accelerate data ingest and export speed by 5x.
Final Word
Urs Hölzle’s optimistic stance on cloud computing, Diane Greene’s hire, expanding high-profile customer base over the last few months and the recent announcements made at the GCPNext 2016, all showcase Google’s seriousness and ambition about its Cloud Platform. While Google lags behind in the current market share, its campaign is catching on just in time to take advantage of the fast-growing, huge-potential business opportunity called cloud computing.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
