Google Cloud Next '19 took place last week in San Francisco, barely eight months after the 2018 event — but a lot has changed in that time. The event marked the first major public appearance of new CEO Thomas Kurian, who took the reins of the company from predecessor Diane Greene earlier this year. It's a critical moment in the company's history: It remains in third-place in the hyper-competitive cloud wars against AWS and Microsoft. But Kurian used the opportunity to share a glimpse of the new direction he is taking the company.
Next showed a new Google Cloud is already emerging. But if Google really wants to put a meaningful dent in the businesses of AWS and Microsoft over the next twelve months, it must invest in sales, improve global marketing — especially to verticals and CEOs — and foster more integrations with the wider consumer Google and Alphabet businesses.
Let's take a look at some of the leading themes and announcements and then go deeper into our assessment.
A New Vision: A Strategic Partner for Digital Transformation
Kurian arrived at Google Cloud in January to an organization on strong foundations. Multi-year contracts and cloud deals valued at over $1 million more than doubled over the past year, growth in total compute hours more than trebled, and the firm now counts nine of the 10 top media and entertainment firms, seven of the 10 largest retailers and half of the largest finance, energy and utilities organizations as customers.
This progress became evident early on at Next through the vast array of customer testimonials that came to dominate the keynotes this year. Proctor & Gamble, JP Morgan Chase, McKesson and others shared story after story of how they were leveraging Google Cloud to support their business and industry transformations. These case studies also provided Kurian with his first opportunity to share his vision for the company as the leading strategic partner for digital transformation.
Kurian is set to revamp Google Cloud’s entire go-to-market to support customer’s digital transformation. This includes large investments in sales and in partners. Google is also aiming to capitalize on the growing number of enterprises looking beyond basic lift-and-shift considerations for cloud services and towards a longer-term strategic partner to support their business innovation goals. In these areas, Google believes it has an edge, especially in deals where the CEO is involved as part of a company-wide transformation.
Related Article: Google Digs Deeper Into the Enterprise at Google Cloud Next '18
Google Goes Multi-Cloud With Anthos
Google is also becoming more attentive to meeting customers where they are on their cloud migrations. The major announcement of the show was Anthos, Google’s hybrid and multi-cloud platform, which provides more flexibility for customers who want to run applications on premises, in the Google Cloud and, crucially, with other major public cloud providers such as Azure and AWS.
According to our estimates, over half of enterprises now use more than one public cloud provider. Developers today want to spin up infrastructure for new applications or lift-and-shift projects while maintaining consistency and portability across their on premises IT, the public cloud and at the network edge. IT departments also want to choose suppliers more flexibly as well, often one workload at time. As a result, demand for multi- and hybrid-cloud services, as well as open-source technologies such as Kubernetes containers, have increased rapidly over the past 12 months. As an indicator, Google stated it launches on average 4 billion containers each week.
Anthos is the first big push into multi-cloud by a major cloud provider and is a big change to how Google positions its cloud services. It will be fascinating to see how AWS and Microsoft respond in the coming months.
Related Article: Choosing a Cloud Provider for Business Innovation
AI and ML Progress
AI was the source of many of Next’s major announcements, which was unsurprising given the area has become one of Google’s most potent competitive advantages. Some of the highlights included:
- The release of several solutions for retail, including Contact Center AI, Document Understanding AI, Recommendations AI and Visual Product Search which are becoming spearheads in a new vertical strategy under Kurian. The focus on retail also sets up a fascinating battle with AWS who is also wooing retailers to its cloud with AI.
- Further expansion of Cloud AutoML, its machine learning customization tool launched in January 2018. It released AutoML Tables, which focuses on the automation of training on structured data, AutoML Video for custom labeling and video classification, and AutoML Vision Edge for custom image models on edge devices. We estimate AutoML is now exceeding 50,000 customers, up from the 30,000 reported at Next 2018, making it one of the most successful ML products in the market.
- The launch of AI Platform, an end-end machine learning lifecycle platform that combines several Google products such as Cloud Machine Learning Engine, AutoML and AI Hub into a simplified environment.
Google is rapidly creating one of the best suite of machine learning products in the industry. But it needs to focus on several areas in the year ahead. First, it must build more horizontal and vertical business solutions, an area it currently prioritizes, as does IBM. Second, it must recruit more systems integration partners focused on helping customers implement AI, similar to Spring ML, Pluto 7 and Cognizant, who understand AI, as well as industries and business processes.
Third, and most importantly, Google needs to convey and broaden awareness about its strategy for responsible AI and governance. Firms operationalizing AI into business processes need instruments to monitor and improve security, bias, explainability, model performance and overall quality assurance. I highlighted this last year in my assessment of its AI strategy.
I had the honor of speaking on a popular panel at Next on AI Responsibility just days after Google disbanded its AI Ethics Council. In the session, Google shared its experiences and recommendations on the topic (you can view the video here). Along with the open source release of several of its internal tools such as TensorFlow Extended (TFX) and What if Tool, Google is making some good initial steps. But establishing the right elements for AI governance will become critical to its strategy as the market and competition for AI in the enterprise heats up.
Related Article: Why AI Still Has a Long Way to Go in the Digital Workplace
What's Next for Security, Privacy and Trust
Security continues to be one of Google’s largest areas of investment and a vital source in helping it establish trust with enterprises. According to our 2018 survey, Google is now the second most trusted technology supplier when it comes to securing company data, behind Microsoft. The company revealed major announcements across a host of areas including threat detection, health analytics, visibility and management, Android multi-factor authentication, G Suite and user protection services at Next.
Customer perceptions of its security story can be mixed however and some still question the level of trust they should afford Google. Kurian repeated Google Cloud’s security policy in his keynote, reiterating that every customer owns their own data, that Google Cloud does not sell customers’ data to third parties, nor use it for advertising purposes. He also reinforced its approach that all data is encrypted by default and that it guards against insider or government access to data.
Last year I argued that Google will be among the key cybersecurity firms of the future, but this requires the company to think of itself more as a supplier of security services in addition to being a secure platform provider. Happily, Next revealed a change of thinking in this direction, which was evident by the over 30 security enhancements introduced across the portfolio. It must continue to reinforce its security message as a priority in what has now become a competitive battle amongst the cloud providers in security and trust.
G Suite Welcomes Google Assistant
Finally, Google showcased the ongoing progress of G Suite which it states now has 5 million paying businesses, up 25% since January 2018, and over 90 million users in the Education sector (up from 80 million in 2018).
AI is playing a central role in its competition against Office 365 and was the focus of this year’s major announcement: the availability in beta of an integration between Google Calendar and Google Assistant, the company’s natural language voice assistant. Google Assistant is also being embedded into Hangouts Meet web meetings, allowing users to start a meeting using voice commands.
While speech assistants have a long way to go in business, my firm, CCS Insight's, survey research found Google Assistant is employees’ preferred voice assistant at present, and the one expected to deliver most value in a work context. It’s up to Google to take advantage of this in a meaningful way.
Related Article: How Slack With G Suite Matches Up Against Microsoft Teams
A First Look at the New Google Cloud
Next gave us our first glimpse of the new Google Cloud emerging under Kurian's watch, one that is more enterprise-oriented in message and focused in its go-to-market. With the arrival of Anthos, it is also more attentive to market realities and meeting customers where they are on their cloud migrations.
Above all, Google is much clearer on its differentiators, namely open source, its distributed infrastructure, data analytics and AI, security, and a partnership model that engages its leading engineering expertise to support customers’ co-creation, innovation and digital transformation needs.
But if it is to emerge a winner against its cloud competitors, it must also focus on three areas which felt missing from the major discussions at the conference. First, it must improve its global marketing with stronger, clearer and bolder advertising to businesses and industries beyond its core IT engineering and developer communities. Second, it must pursue CEOs who want trusted partnerships with tech firms to support their business and digital transformation plans, an area where it currently has an edge.
Third, although Google has made good steps in integrating Google Cloud with the wider consumer organization and bringing a "one Google" approach to the enterprise, it needs to work harder to integrate further across Alphabet in areas such as Google Health, Google AI and DeepMind, the Chronicle cyber business and internet of things, a topic which received little attention this year.
These endeavors are crucial as Google Cloud looks to deliver on the new vision CEO Kurian spelled out.