Cloud Services

Google Makes VMware Co-Founder Cloud Boss

Google hopes to grow its cloud business bigger than its ad business by 2020, and took a step in that direction Thursday, hiring VMware co-founder Diane Greene to head up its cloud division.

Greene will head up all of Google (Nasdaq: GOOG)'s cloud business, including Google for Work, Cloud Platform, and Google Apps, integrating product, engineering, marketing and sales to allow the company "to operate in a much more integrated, coordinated fashion," CEO Sundar Pichai said in a post on the Google Cloud Platform blog Thursday. Greene will continue to serve on the company board of directors, where she's had a seat since 2012.

Google is also acquiring bebop, a company Greene founded that makes a development platform for enterprise applications.

Google has a long history in the enterprise and cloud, Pichai says in his blog post. Its first product for business was the Google Search Appliance in 2002, and the portfolio now includes Gmail, Docs, Chromebooks and the Cloud Platform. Some 60% of the Fortune 500 use a paid Google for Work product, Pichai says in his blog post, noting:

    ... all of Google's own businesses run on our cloud infrastructure. Including our own services, Google has significantly larger data center capacity than any other public cloud provider -- part of what makes it possible for customers to receive the best price and performance for compute and storage services.

    All of this demonstrates great momentum, but its really just the beginning. In fact, 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're investing for the future.

Greene was founder and CEO of VMware 1998–2008, which was acquired by EMC in 2004. She was fired by the VMware board in 2008, and replaced by Paul Maritz, a retired Microsoft executive. After she was fired, VMware's stock dropped 24% and three other executives, including her husband Mendel Rosenbaum, left the company.

Google has high hopes for its cloud business, and wants to see it grow bigger than the ad business by 2020, said Urs Hölzle, Google senior vice president for technical infrastructure, at the Structure conference in San Francisco Wednesday afternoon, a day before the Greene announcement.

Head in the Clouds
Google's Urs Holzle
Google's Urs Hölzle

However, people question Google's commitment to the enterprise, noted Fortune senior editor Stacey Higginbotham, interviewing Hölzle on-stage. Google isn't an enterprise player; it doesn't have sufficient support, she said.

Hölzle noted (as Pinchai did a day later) that the Google Search Appliance came out in 2002, but conceded that Google is coming from behind in the enterprise.

But "reputation lags reality," Hölzle said.

Google's cloud growth rate is the fastest in the industry, and the company has many satisfied enterprise customers.

Cloud evolution is still in its infancy. "I compare cloud 2015 to phones 2007," when the iPhone first appeared, Hölzle said. "I think the next five years in cloud will be much more [about] evolution than the previous five years."

In 2007, most people didn't have smartphones. Similarly, most people don't have cloud workloads today. Google hopes to be the Android of cloud, Hölzle said.

But one company makes most of the profit in smartphones, Higginbotham noted, referring to Apple. (Editor's Note: Also, while Android is by far the most popular phone operating system, the iPhone is the most popular phone -- further complicating Hölzle’s metaphor.) What does that say about the future of cloud?

Storage and compute will continue to get less expensive, without a lot of margin, Hölzle said. But there are healthy margins available "when you create value that goes really deep into the enterprise," providing applications that make people more productive.

"You're making people more productive by spending machine resources," Holzle said. Machine resources get less expensive, following Moore's Law, but salaries don’t. Margins improved over time as the gap between people and compute resources evolve.

The evolution of cloud providers is both an opportunity and threat to carriers. It's an opportunity to connect enterprises to cloud apps, but a threat as the cloud companies pick up the hosting and business services that carriers have provided in their capacity as managed service providers.

One audience member at Light Reading's White Box conference on Tuesday predicted that in a few years, the major communications service providers will be Google, Amazon and Microsoft -- not the companies we now think of as Tier 1s. An AT&T executive, presenting on a panel at the conference, responded with bold defiance. (See the last three paragraphs of this article: White Box Networking: It's Not About Cost)

Cloud is big part of the transition to the New IP, a disruption that threatens all incumbents -- both carriers and vendors. (See Incumbents: Do or Die.)

Related posts:

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected]

MikeP688 11/29/2015 | 2:49:51 AM
Quite a coup :)))) As someone who is somewhat of a reasonable "power user" of google apps for my ongoing work, I'd say to Google:  right on!!   I hope to see some major developments on this.  I can't help but wonder what the other leading light of Cloud: Amazon has up its' sleave though.....
Sign In