Google intends to make it big in cloud computing, and to help it do so, it hired Diane Greene head the division, according to The New York Times. Greene, who is a well-known Silicon Valley entrepreneur, served VMware, an early cloud computing pioneer, as its chief executive from its founding in 1998 to 2008. Since 2012, she has been on Google’s board.
Google not very popular among enterprises
Greene will take care of Google’s enterprise businesses as its senior vice president. Google has agreed to acquire Greene’s startup, Bebop, which has been working on cloud technologies for the past three years.
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Such a move from the Internet firm indicates that it wants to move beyond its traditional businesses of consumer software and advertising. The company has turned into a web behemoth owing to the dominance of Google Search, the Chrome browser and the Android operating system. However, it does not have a strong presence in the corporate realm.
Paid Google cloud services like corporate-grad Gmail and Google Docs are popular among 60% of Fortune 500 businesses. But the revenue Google generates from these products is a small fraction of what market leader Amazon or Microsoft generates through its competing cloud products.
Amazon and Microsoft: tough to beat
The enterprise market is very lucrative, but for expansion, Google will need to harness its technology prowess for the creation of software platforms for cloud apps and development tools to build them. In the next four years, Market research firm IDC expects the combined market for such software to grow by more than 100% to around $25 billion.
At the recent Structure Conference, Google’s senior vice president of technical infrastructure, Urs Holze, predicted that by 2020, Google’s cloud revenue will exceed that of its advertising business. Many believe that Google’s offerings do not lag competitors in cloud development business and that they are already comparable to that of Amazon.
Nevertheless, the goal is very ambitious, and Google will need to make a profound shift in its business to be able to achieve this in due time. Last year, the Internet firm’s revenue was $66 billion, of which 89% came from the company’s advertising efforts. Its cloud business is expected to contribute just $500 million in sales this year.