In February, a month after Thomas Kurian became CEO of Google’s cloud computing unit, he pledged publicly that Google Cloud would compete “much more aggressively” than in the past, promising to significantly expand its sales force in order to land more Fortune 500 companies as customers.
Since then, Mr. Kurian has moved quickly to put his stamp on the unit, shuffling the leadership of its sales division. The new team is part of the organizational chart above that shows the more than 150 people running the cloud unit, including the 19 people who report directly to its CEO. Mr. Kurian has also expanded Google Cloud’s offerings through its largest ever acquisition and by absorbing another unit from within Alphabet, Google’s parent company. And Mr. Kurian is discussing a partnership with the software provider VMware, which could help it make inroads with large business customers.
But there’s one thing that hasn’t changed under Mr. Kurian: Google Cloud is still stuck in third place in the cloud computing market behind Amazon and Microsoft, and it isn’t clear if that will change anytime soon.
• Google Cloud CEO Kurian has shuffled leadership of sales group
• Fewer changes to the unit’s engineering leadership
• Google Cloud is working with VMware on a partnership
Google’s leaders have been declaring their seriousness about the cloud business—through which it handles storage, computing and other technical chores for businesses—ever since Mr. Kurian’s predecessor, Diane Greene, joined the company in 2015. Ms. Greene went on a hiring blitz and sought to get Google’s advertising sales force to include cloud services in their negotiations with big advertisers.
But her efforts didn’t move the needle dramatically for Google Cloud, which had 8% of the global cloud computing market in the first quarter of 2019, compared with 16% for Microsoft and 33% for Amazon Web Services, the internet retailer's cloud computing unit, according to research firm Canalys—only a modest improvement from two years earlier. Advertising still overshadows all else at Alphabet, accounting for around 85% of its $116 billion in revenue during its last fiscal year.
As pioneers of internet search, some of the company's leaders have long felt that it should be in a much stronger position in cloud computing. But it took Google too long to get serious about the business, giving AWS a crucial head start.
On Thursday, Google Cloud revealed for the first time its annualized sales based on the unit’s current business pace, $8 billion. But that figure is far lower than the $33 billion comparable sales rate for AWS. Google's figure also includes sales from G Suite—the company’s collection of online productivity applications including its word processor, spreadsheet and email—which inflates its size relative to AWS.
A spokesperson for Google Cloud declined to comment for this story and org chart.
Sales and Engineering Changes
A former president of product development at Oracle, Mr. Kurian has put new leaders in charge of Google Cloud’s sales organization to help boost the unit’s revenue growth. In April, he hired longtime SAP executive Robert Enslin as president of the unit, leading its sales teams. Part of Mr. Enslin’s role is making sure that senior sales executives meet sales quotas and provide more accurate forecasts, which some struggled to do under Ms. Greene, according to a person who does business with Google Cloud.
Mr. Kurian has replaced Chris Klayko, who was managing director of Google Cloud’s sales team for the Americas, with two newly hired executives from outside the company: Kirsten Kliphouse, president of the unit’s North America region, and Eduardo Lopez, president of its Latin America region. Mr. Klayko left Google Cloud in May, which hasn’t been previously reported. Mr. Kurian has also brought over familiar faces from Oracle, including vice presidents Amit Zavery and Hamidou Dia.
Mr. Kurian is also increasing the size of Google Cloud’s professional services organization, which trains top customers how to use the cloud services they’ve purchased, with the goal of getting them to buy more in the future, said two people who do business with Google Cloud. That group is led by Vice President Jason Martin, one of several former VMware executives who followed Ms. Greene, the co-founder of VMware, to Google Cloud.
The Google Cloud CEO also oversees G Suite, which have helped Google Cloud get its foot in the door of technology departments at big companies. “If enterprise customers love G Suite and have been on it for quite some time, they start to wonder what else they can use from Google Cloud,” said Tony Safoian, president of SADA Systems, a company that sells Google Cloud services.
On the engineering side of Google Cloud, Mr. Kurian appears to have made fewer changes. The technical brains behind Google Cloud—Senior Vice President Urs Hölzle and Chief Information Officer Ben Fried—are both revered figures at Google, which tends to place engineering leaders on pedestals. While both men report to Mr. Kurian—and before him, to Ms. Greene—they define technical strategy for Google as a whole, not just its cloud unit.
As the org chart shows, one of the people reporting to Mr. Hölzle is Benjamin Treynor Sloss, a 16-year Google veteran. He leads a team of thousands of engineers who maintain the data centers and equipment that keep Google Cloud and other services up and running. His LinkedIn description puts his responsibilities bluntly: “If Google ever stops working, it’s my fault.”
Still, there have been some notable additions to Google Cloud’s technical team under Mr. Kurian, including Paolo Juvara, a 20-year Oracle veteran who joined in March as Google Cloud’s first chief information officer, a hire that hasn’t been reported previously. Mr. Juvara reports to Mr. Fried, Google’s companywide CIO.
Inside the company, there is also buzz that Mr. Kurian is working on a wider reorganization of Google Cloud. That may in part be because Ms. Greene led a reorganization of the unit’s sales division in 2016, about a year after she joined Google Cloud.
There are signs that Alphabet’s senior leadership is permitting Mr. Kurian to make bigger acquisitions than the unit did under Ms. Greene. Among the deals she wanted Google to consider was an acquisition of GitHub, but Google CEO Sundar Pichai was less keen on the deal, CNBC reported in November. Microsoft ended up acquiring GitHub. Ms. Greene didn’t respond to an email seeking comment.
In June, Mr. Kurian announced that Google would acquire Looker, a developer of business analytics software, for $2.6 billion, the company’s largest acquisition since the $3.2 billion acquisition of Nest in 2014. Earlier this month, Alphabet announced it plans to move Chronicle—previously an independent cybersecurity company that it formed—into Google Cloud, giving Mr. Kurian’s sales teams another product line to pitch to large companies.
Google Cloud is also working on an industry partnership with VMware that could help it win more business from companies that haven’t yet moved large amounts of their computing to cloud providers. The two parties are already collaborating on new software that will let their customers more easily run computing jobs powered by VMware software on Google Cloud's computing service, according to two people with direct knowledge of the matter.
A VMware spokesperson declined to comment. The agreement is similar to one that VMware announced with Microsoft in April. Such deals are important because VMware’s data center software is a de facto standard among Fortune 500 companies.
Some analysts were impressed with the $8 billion annualized sales figure that Alphabet shared this week. The only Google Cloud sales figure Alphabet had shared before was in February 2018, when it said the unit was generating more than $1 billion in sales a quarter.
“Google is definitely a distant No. 3, but they look like they're accelerating,” said Frank Gens, chief analyst at IDC, a technology market research firm. “They are starting to make some very big bets to improve their position in this race. We all know they have a lot of upside if they can get their enterprise chops developed.”
Still, Google has a long way to go until it fulfills a prediction that Mr. Hölzle, Google’s eighth employee, publicly made five years ago, when he said that the company’s cloud business would someday generate more revenue than its internet advertising business. Unless there’s a dramatic collapse in Google’s main business, that prediction is unlikely to come true under current management.