How Thomas Kurian’s ‘Quite Simple’ Strategy Is Transforming Google Cloud
Thomas Kurian has upped Google’s cloud game with hot new technology, a razor-sharp vertical market focus and big partner investments.
Google Cloud CEO Thomas Kurian says large-scale organizational changes and investments over the past year are paying off in the sales trenches for the No. 3 cloud provider as it moves toward a 100 percent go-to-market plan with channel partners.
Partners brought 85 percent more new customers to Google Cloud in 2019 than the prior year, and partner-sourced revenue grew 195 percent, Kurian told CRN during an exclusive interview at Google Cloud’s headquarters last month in Sunnyvale, Calif., before the coronavirus outbreak was declared a pandemic. There was 300 percent growth in the number of Google Cloud-certified partners last year.
“All of that tells us the partners are finding we’re able to bring them business, they’re able to complement us with good solutions, and we can create an ecosystem for them with our customers,” Kurian said. “And we’ve been very careful to make sure that we enable the partner ecosystem with training, with certification, with support, with commercial incentives. We are very focused on making sure in each country, in each industry and in each market segment, we have the right partners.”
Google Cloud revenue—which includes Google Cloud Platform (GCP) and G Suite—jumped to $8.9 billion in 2019, a nearly 53 percent increase from the prior year. GCP growth alone was “meaningfully higher,” according to the company.
That big sales gain is due in no small part to the end-to-end impact that Kurian, a former 22-year Oracle veteran and product development chief, has had on Google Cloud’s once-sluggish cloud bid since taking the helm 14 months ago. Kurian quickly launched an aggressive drive for enterprise customers, developing an open-source, hybrid and multi-cloud game plan with the new Anthos platform and introducing industry-specific vertical solutions. Google Cloud also has rolled out more than 280 new products and a revamped partner program since he took the reins.
Kurian said Google Cloud is moving to a 100 percent partner attachment strategy for customer deals because—even with the financial muscle of Alphabet, its nearly $162 billion parent company—it could not match the might that the channel brings.
“We put that in place because we believe that partners have both a set of skills and reach that we don’t have direct,” Kurian said. “We believe very deeply, at the core, that the platforms that win in the end are those that are differentiated by solutions—some of them delivered by the cloud providers, others by an ecosystem around them—and we’re very, very committed to our partners.”
Google Cloud would not disclose how far along it is toward that goal, which was set in 2018, but SADA Systems CEO Tony Safoian said it’s “extremely close.”
“We’ve never before seen this level of attention to the partner attach motion play out in the market, in the field and in every geography,” said Safoian, whose Los Angeles company was pegged as Google Cloud Global Reseller Partner of the Year last April.
“Where it matters most and has become very apparent recently, this is resonating with Google Cloud’s field sales organization. They want partners to contract deals, they want partners to dive into the presales engineering motion, they want partners doing professional services after the sale—but they also expect partners to do much more than ‘ask for handouts’ from the field,” Safoian said.
In addition to expanding support and commercial incentives for partners, Kurian’s first-year plan for Google Cloud identified three other areas requiring immediate improvement: product maturation, scaling its direct sales organization, and introducing new customer success and technical account management functions.
Mission accomplished for achieving those goals, according to Kurian. The company has also gained key customer wins with firms including Activision Blizzard, Etsy, John Lewis Partnership, Lloyds Banking Group, Lufthansa, Major League Baseball, Vodaphone and Wayfair. Deals over $50 million more than doubled last year from 2018.
“We were very clear on what we needed to do,” Kurian told CRN in March, a day after Google Cloud said coronavirus concerns prompted it to transform its annual Next ’20 conference into a virtual event called Google Cloud Next ’20: Digital Connect, which since has been postponed. Coronavirus concerns also prompted Google on March 26 to assert that the network supporting its enterprise cloud, as well as its many massive consumer services, is in good shape to handle the sustained surge in traffic brought on by the crisis.
“Our strategy for cloud is quite simple,” Kurian said. “In every industry, we see customers wanting to adopt digital technology either to lower cost, grow their top-line revenues or change ... how they bring products in certain markets, and we at Google are using our cloud platform as a vehicle to deliver digital solutions to them.”
And Google Cloud’s ability to leverage the broader assets of Google and Alphabet—from the big data prowess of its search, marketing and advertising reach to health care and life sciences insight—is among its top selling points over competitors, according to Tom Galizia, senior technology partner and lead commercial partner for the Alphabet/Google group at Deloitte Consulting, a Google Cloud Premier partner.
“With the lens of all of the assets of Alphabet … the ability to work with industries to change the face of the planet—not just to give them a platform to be innovative, but to give them real access to other parts of the business in a compliant way—is pretty amazing,” Galizia said.
Google’s Cloud Journey
With cloud adoption still in its relative infancy, the market is wide open for Google Cloud, even as its trails the two public cloud frontrunners. Amazon Web Services (AWS) led the market for cloud infrastructure services spending in the fourth quarter at 33 percent, with Microsoft at 18 percent, according to a February report from Synergy Research Group. Google Cloud maintained its 8 percent share.
Kurian sees three primary Google Cloud capabilities: allowing customers to use its large-scale infrastructure to modernize their IT abilities; allowing customers to leverage Google Cloud’s data, analytics, machine learning and application development solutions to understand and use information in new ways; and providing industry-specific solutions in the six target markets of financial services, health care, manufacturing and industrial, the public sector, retail, and media, telecommunications and entertainment.
The CEO points to reports by Gartner and Forrester Research as evidence that Google Cloud’s concentration on product maturity has been effective. Google Cloud holds 20 leader positions in Gartner’s Magic Quadrant and Forrester’s Waves reports—a six-fold increase from 2017 to 2019.
Its work included ensuring Google Cloud meets all compliance requirements for various laws, regulations and standards. In December, it announced it had earned the U.S. federal government’s FedRAMP High authorization and expanded its FedRAMP Moderate authorization to 64 products in 17 cloud regions.
“We also added support for lots of more traditional enterprise workloads—SAP, VMware, Oracle, Windows, mainframes,” Kurian said. “These are all things that enterprise customers want, and we didn’t support them before 2019. That lets us serve customers better, because we have a prepackaged solution. It also opens up new markets for us.”
In November, Deloitte Consulting—Google Cloud’s largest partner and a launch partner for its Cloud Acceleration Program for SAP customers—said it was ramping up its Google Cloud partnership with new solutions targeting large-scale SAP workload migrations. And Google Cloud soon will announce the general availability of Google Cloud VMware Solution by CloudSimple, to which select customers have had early access since last July.
Google Cloud last year also said it would triple the size of its sales organization over the next few years. Kurian wouldn’t specify how many sales employees Google Cloud started with, saying only it was lower than a reported 1,500 when he joined and now is larger.
“We’ve built out great sales leadership from companies with enterprise backgrounds, so they bring a lot of expertise in how to guide and grow and manage large-scale sales organizations,” he said.
The new hires include veterans from AWS, IBM, Microsoft, Oracle, Red Hat, Salesforce and SAP, including Robert Enslin, an SAP veteran hired last April as president of global customer operations.
Google understands it can’t make substantial market-share gains without the help of partners, according to SADA’s Safoian.
“It’s a completely new orientation—not that Google didn’t have partners before, and that we didn’t have a great business before—but it’s fundamental to them,” Safoian said. “I know from talking to a lot of people at Google that yes, they want to win every quarter, every year, but they have a 10-year vision around this journey, and so do we. We know that Google is going to continue to grow 60, 70, 80, 90 percent a year … for the next several years.”
Google Cloud also hired Kirsten Kliphouse (formerly of Red Hat and Microsoft) as cloud president for North America; John Jester (formerly of Microsoft) as vice president of customer experience; Atul Nanda (formerly of Salesforce) as vice president of customer support; and Carlos Granda (formerly of SAP) as vice president of customer success. And it has new regional sales leads in a number of geographies, including North America and Europe, the Middle East and Africa.
Google Cloud now employs a regional decision-making model that has channel managers reporting to its field sales leaders in their respective regions—instead of into Sunnyvale—for greater speed. It simplified its commercial contracting process and tiered its customer base to SMBs, corporate or commercial accounts, enterprise, and new select or named accounts. The latter typically have a one-to-one relationship with a key Google Cloud account director in addition to a salesperson, and include Carrefour, Hongkong and Shanghai Banking, Spotify and Target.
“We’ve organized them by industry, so it allows us to sell industry solutions much more effectively to customers,” Kurian said.
Google Cloud is in an “evolving revolutionary state,” and its revamped strategy has been well-received by the market and partners, according to Deloitte’s Galizia.
“What was needed a year ago was a revolution,” he said. “Two years ago, on an analyst call, they would have talked about deals over $1 million, which is not an enterprise discussion. The clock speed has gone up, and the intensity has gone up. By and large, it’s been wildly effective. When you have that level of precision and focus, it makes things easier, because Google could be many things to many people, but … trying to satiate the entire market all at the same time is not possible.”
Kurian is “playing chess, not checkers,” according to Galizia, who has said Deloitte’s Alphabet/Google work will be its fastest-growing, billion-dollar business—a milestone it expects to hit within 24 months.
“He’s a strategist, he’s a technologist, he’s an operator, and all of those dimensions of a leader that he brings to bear are incredibly refreshing,” Galizia said. “The amount of change that he’s done in a very short period of time is almost mind-numbing. In the very early innings, he was laser-focused on industry vertical solutions, and so we have stood up dozens. Given his Oracle lineage, he knows the importance of us meeting a customer where they are with relevant opportunities and/or solutions that drive greater efficiencies.”
This year, Google Cloud will continue expanding its internal go-to-market organization, partner ecosystem, technology innovation and new business solutions using its artificial intelligence advances and targeting specific industries, according to Kurian.
He’s been very clear and consistent in his vision, Enslin said.
“He’s exceptionally focused on how we add value to the customer,” Enslin said. “That’s been a very clear approach to how we go out to market, what are the major markets we want to go after, which of the industries are important, how to simplify the solution, how to make it easier for customers to do business with Google Cloud, and how we support our customers in a world-class way. Thomas has laid that out very clearly from the very first day. It’s a very easy way to work, because we’re not twirling. We know exactly what we’re going after.”
Google Cloud is going after enterprise accounts for its fully managed Anthos platform that debuted a year ago, allowing customers to build and manage applications across on-premises data centers, Google Cloud and rival third-party clouds including AWS and Microsoft Azure. It shortly will announce that Anthos on AWS will be generally available for all customers, Anthos on Microsoft Azure is being tested with customers and Anthos support for virtual machines is in early preview.
Cleveland-based KeyBank uses Anthos to optimize its test, development and delivery processes across an on-premises environment and GCP, and retailer Kohl’s uses it across GCP and other public clouds. “We’re seeing very good momentum,” Kurian said.
“We are seeing a lot of customer interest on ensuring that they can build applications and decouple where they’re building the application and where it can run. It’s the choice that it gives them.”
Anthos addresses the biggest issue that Google Cloud sees among customers—their lack of cloud skills, according to Kurian.
With Anthos, he said, “they don’t have to fragment their existing skill set, because you can train your people on one technology and have it work everywhere. Anthos also provides you the ability to manage consistently: You can manage security, you can manage operationally across clouds.”
Partners also see Anthos as a big value proposition because it allows them to train their own employees on one technology “no matter what the customer picks as their platform,” Kurian said.
“Thomas’ strategy of building and positioning the Anthos platform to break into digital transformation budgets was brilliant,” said C Vijayakumar, CEO of HCL Technologies, a Noida, India-based Google Cloud partner.
Deloitte’s Galizia calls Anthos one of Google Cloud’s “crown jewels” and an example of what it’s done better and differently: “It reduces vendor lock-in and creates portability and flexibility. Others are trying to copy that strategy now, but … they were the leader to force everybody else’s hand.”
Deloitte, HCL and other partners have a presence in all 21 priority markets targeted by Google Cloud, and partners of all sizes are integral to its strategy, Kurian said, noting the cloud provider serves more than 5 million small and midsize companies.
“A partner who helps a small and medium business adopt our collaboration tool, G Suite … is going to be very different than a partner who helps us implement machine learning for a … top-tier bank,” Kurian said. “The large system integrators, of course, are super important partners to us … but they’re focused on delivering solutions to a certain segment of customers.”
HCL was an “early believer” in Google Cloud, according to Vijayakumar. In October, it started a dedicated Google Cloud business unit with plans to increase its Google Cloud-trained workers from 1,300-plus to more than 5,000 and open Google Cloud-specific, cloud-native labs in Dallas, London and India.
“The way Thomas and his team have executed their partner-first approach and their capability curation in areas like data and AI, SAP solutions on Google, vertical solutioning, amongst others, has given them a niche space in the market,” said Vijayakumar, who reported “excellent on-ground results with large joint wins across industries.”
The Google Cloud Partner Advantage program and portal launched last July, consolidating 16 programs. Kurian has prioritized making sure that Google Cloud is the “best partner to partner with,” said Carolee Gearhart, Google Cloud’s channel chief.
“There are lots of ways for partners to unlock additional benefits that frankly go well beyond economics,” said Gearhart.
The company has also assigned new advisers to every partner to make it easier to do business with Google Cloud; introduced new channel support for enterprise customers and technical benefits and support, including during presales cycles; and debuted new “expertises” for partners to further differentiate themselves.
“We see that our program is smaller, but more focused … and we’re very crisp on the kinds of solutions we’re bringing to market,” Kurian said. “It provides partners greater ability to differentiate amongst themselves and add value. One of the things that we’ve done very well with partners is train them on the solutions that we’re talking to customers about and that customers are finding interesting.”
Google Cloud also has doubled down on MSPs.
“Not only did we build that program, but we’ve also put in place specific support,” Kurian said. “If you’re a managed services organization, our partner team will help you with trouble ticketing, triaging issues, resolving problems, etc., and that is very different from what some of the other cloud providers do.”
The MSP program is a big leap forward, said Safoian, whose company recently signed a deal to drive $500 million in customer purchases of GCP services between now and the end of 2022.
“There are more resources at Google than ever to work on the commercial [terms] around these complex, large deals,” Safoian said. “Now when a customer makes the decision to go to Google Cloud, they feel like, ‘Wow, I have the legal and contractual infrastructure, I have the support infrastructure … and also the engineering support to ensure that my migration is going to be successful.’ In years past, these constructs didn’t exist, this head count didn’t exist, and that made the very large customers, understandably, somewhat nervous.”
Google Cloud is offering “very attractive” financial incentives to partners, according to Kurian.
“We’ve put a lot more economic incentives directly into the hands of partners, both with regard to bringing us new customers or winning new logos, as well as expanding our existing presence by delivering solutions into existing customers,” Kurian said. “We expanded the number of territories that channels can sell to. We’ve reduced and eliminated channel conflict between direct and the partners. Net-net, the partners have been very happy.”
Google Cloud’s field compensation plans are neutral on reseller transactions, so its field salespeople are incentivized to work with partners on customer deals. The same offers and promotions proffered by Google Cloud also are available from partners, who have access to the same training and enablement given to internal sales and presales teams. Google Cloud’s focus and growing priority on partners has been fantastic, said Jim O’Dorisio, general manager of emerging commercial solutions at Iron Mountain. The Boston company was named the Google Cloud Technology Partner of the Year for AI and Machine Learning last April for its InSight content services platform.
“Because we’ve made that transition from early product to pretty significant pipeline and closing deals … our field teams are working closely together to do joint account planning and work with some of our joint large customers,” O’Dorisio said. “It’s pretty evident when we engage with the leadership within Thomas’ organization that everybody gets how important partners are to their success. There’s more wood behind the arrow as it relates to the support that we receive.”
Extending The Partner Initiative
Based on demand, Google Cloud is intent on expanding the U.S. and overseas footprints of its public sector partners catering to local, state and federal agencies.
That ecosystem is growing very quickly, according to Kurian.
“We’ve started seeing customers work with us on a large-scale basis,” he said. “We provide capability to the New York City Cyber Command. We have a public win with the U.S. Postal Service, where we’re helping transform its business model and the technology infrastructure behind it to become more of a digital organization. We’ve done work with different states—Arizona, Tennessee—enabling them to use our platforms and our collaboration tools, for example, to change how effectively they can collaborate amongst themselves and also deliver services to citizens.”
Google Cloud is also spotlighting how its technology is helping enterprise customers such as PayPal, Spotify, Target and The Home Depot solve business challenges.
“We’re working with some of the largest customers to solve the stickiest and most difficult problems,” Enslin said. “We have to continue pushing the … messaging around the solutions that we’re bringing to market by industry. That is a major advantage to Google Cloud—and the word is getting out more and more.”
Kurian said he’s more interested in solving customer problems than keeping score in his chess match against AWS and Microsoft.
“We don’t spend our day waking up in the morning worrying about who’s first, second or third—partly because it’s important that we focus on the customer, not on competition, and, much more importantly, because it’s also apples to oranges what people are counting in their cloud revenue numbers,” he said. “So we don’t lose a lot of sleep over keeping score.”