Google has been in the cloud platform business for years yet is always portrayed as an also-ran to Amazon’s AWS cloud services. Even when Google is praised for its enterprise cloud offerings in the press, there is always a comment along the lines of “but they’re way behind AWS.” This is an unfair comparison. Amazon’s AWS is a low engagement, cloud infrastructure business, more heavily focused on IT operations than developers. This couldn’t be more different than what Google is currently offering, let alone what it plans for the future.
High Touch, More Stuff
Speaking with customers at the recent GCPNext 2016 conference yielded two major themes. The first is the high-touch nature of the Google customer relationship. When asked “why Google?” many customers responded with the same word, “partnership.” This was not only from the companies that Google paraded out onstage or in front of press and analysts but from software developers at lunch and the GCPNext evening event. All cited access to the Google engineering staff and high levels of responsiveness to their needs and problems. This is fundamentally different than the increasingly common IT operations approach from Amazon and now GoDaddy or even the professional services-oriented methods of IBM.
The second most common reason that attendees were either currently purchasing or considering Google Cloud Platform (GCP) was the value-added services that Google offers. At GCPNext 2016, Google talked extensively about their machine learning portfolio (though strangely never mentioned Deepmind). Many attendees considered this a key capability that they hoped to leverage. Quite a few had already started to experiment with TensorFlow on-premise but were intrigued with the possibility of machine learning as a cloud service.
Other API accessible services such as identity and access management all played into their decision to at least consider GCP for development. Access to Google’s extensive security software portfolio was also an advantage.
Can Google Scale the Business Model?
The value-add strategy is similar to that of enterprise cloud rival IBM and dovetails nicely into the high-touch customer engagement model. The big question is “can Google scale the business?” There’s not much doubt that they can scale the technology – they’re already doing that – but tying up engineers with customers leads to major distractions from their development projects. The advantages of direct customer contact, including gleaning new ideas from customers, are often outweighed by the slowdown in development projects.
And this is where Google faces a paradox. The value-added services, especially the advanced development resources such as machine learning and security, are important drivers for choosing GCP. So is the engineering level service that Google provides. Google can’t afford to slow the pace of development nor diminish the high-touch environment without losing momentum.
What Are the Alternatives?
Google can address this dilemma in several different ways. First, they can throw money at it. Given the price competitiveness of the cloud market, higher spending means lower margins. Since Google has a consumption pricing model, where customers pay for services when they use them, they may make up that margin on higher value, higher priced services such as machine learning.
They might also segment customers into different service tiers. If higher monthly bills mean more service, then the service levels pay for themselves. Other customers will have to make due with online communities and resources. At present, customers have been heard complaining about the inadequacy of online resources, especially documentation. Common complaints include lack of depth and infrequent updates. Addressing these concerns and building better online communities may alleviate the need for customer contacts with Google engineering, at least for the more mundane issues.
Finally, they may want to build out or acquire a professional services capability. Unlike IBM, Oracle, or even Microsoft, Google’s reputation as a go-to for paid education and support is nearly non-existent. Whether it’s a direct, Google-delivered service or partner-delivered service, GCP consulting, training, and programming assistance needs to come to the forefront if they are planning on maintaining a high touch environment for advanced cloud services.
Google has clearly built out a scalable cloud technology solution. The services in the portfolio extend well beyond what could be considered commodity cloud resources. The value-add, high-touch strategy is attracting the attention of potential customers and differentiating them from their main competitor, Amazon.
Google is also successfully leveraging its own techie culture to speak to the developer community. As was pointed out by several customers, they need to speak even louder. Clearly, even Google’s fans think they are too quiet about what they have.
It remains to be seen how they can translate these advantages into a sustainable, profitable business that stays true to the high-touch, high-value model that makes it more interesting than Amazon’s commodity approach.