When Google acquired VMware co-founder Diane Greene’s startup, Bebop, last fall and hired Greene to lead their team of cloud businesses, it became clear that they were bulking up their efforts to take on the enterprise. According to Synergy Research Group, in the third quarter of 2015, AWS had the majority market share in the Infrastructure-as-a-Service (IaaS) industry at 39 percent, with Microsoft at 11 percent and Google at 6 percent. Since the dawn of IaaS, AWS and Microsoft have led the competition, with Google lagging behind — a continuous ding to an otherwise heavyweight cloud services provider.
IaaS vs. PaaS and the shot Google didn’t take
Google is a native public cloud company, so operating at massive multi-tenant scale is in their DNA. As such, they have the chance to capture significant IaaS market share. So why has success in IaaS eluded Google in the past? For one thing, compared to frontrunner AWS, Google was slow to build out a broad IaaS platform. For a while, Google’s main offering was Google App Engine, a Platform-as-a-Service (PaaS). They didn’t make the push into IaaS until Google Cloud Platform (GCP) was launched.
AWS took the opposite route; they started with IaaS and eventually expanded into PaaS, though their core offering remains deeply rooted in IaaS. Considering the opportune years Google missed from about 2007 to 2013 to gain credibility with IaaS in the enterprise, they’re still faring well within the IaaS community; as Gartner analyst Lydia Leong puts it, “Few providers have the financial resources to invest in being broadly competitive in the cloud IaaS market.” Google is one of them.
Cross-selling: Google Cloud Platform and Google for Work
In addition to Greene’s breadth of experience as an entrepreneur and technologist, Google has 2 more tricks up their sleeve to help gain a competitive advantage: an IaaS offering that’s now 40 percent less expensive for many workloads than many other public cloud providers, and the ability to cross-sell GCP with Google for Work. Our CIO Glenn Weinstein says, “As enterprises move their email and productivity suites to Google for Work, they become natural candidates for GCP. As a whole, this set of offerings stands a legitimate chance to take market share from the typical Exchange/Office/.NET environments in many corporate IT shops. It also gives Google a significant edge over Amazon, which has no comparable email or productivity offering to pair with AWS.”
Another selling point for Google: They’ve committed to multi-language environments, which can help Google avoid becoming associated with a single set of programming technologies (as we saw in Azure’s early years with .NET). While AWS is seen by many as an enterprise IT standard, GCP stands to gain a great deal of enterprise market share through its ties to Google for Work. But in order for Google to gain traction in the enterprise, it needs to be able to create a marketable identity as a safe corporate standard across GCP and Google for Work — not just one or the other. Weinstein says, “To do so will require more aggressively courting CIOs, building a more robust partner ecosystem for implementation and support services, cross-selling GCP with Google for Work, and solving common enterprise integration problems — as AWS has.”
Google has made great public strides in targeting their largest opponent: AWS. As long as they can stay competitive with their recent price drops and continue to build on their history of innovation, Google stands a good chance of climbing the IaaS ranks. As CIOs begin to train their sights on the public cloud — and move away from data centers and silos — Google is in a good position to be part of the huge increase in IaaS spend that’s coming in the next 5-10 years.