The Top 10 Biggest Google Cloud News Stories Of 2023 (So Far)
From 12,000 Google layoffs to launching a completely new generative AI portfolio, here are the top 10 most important Google Cloud news stories of 2023 so far.
The nearly $30 billion cloud computing company made waves this year by allowing customers to migrate their workloads to the cloud with no up-front commitments while still getting access to Google Cloud financial incentives such as cloud credits.
In 2023, Google Cloud witnessed a 12,000-employee layoff round by parent company Alphabet as Google also began mandating that workers come into the office.
[Related: The 10 Biggest AWS News Stories Of 2023 (So Far) ]
Google Cloud 2023 Snapshot
Mountain View, Calif.-based Google currently ranks No. 3 in the world for cloud market share. As of first quarter 2023, Google Cloud’s worldwide cloud services market share stands at 10 percent share, trailing Microsoft at 23 percent share, and AWS at 32 percent share, according to data from IT research firm Synergy Research Group.
However, Google is growing its cloud sales at a faster rate compared to its two larger competitors. Google Cloud generated total sales of $7.45 billion in Q1 2023, representing an increase of 28 percent year over year.
This year, Google Cloud CEO Thomas Kurian said the company been investing heavily in AI and partner enablement this year, particularly in generative AI both on the consumer and business enterprise fronts. “We remain deeply committed to responsible generative AI,” said Kurian during a media briefing this year as the company unveiled its new generative AI offerings. “This is the first time we’re taking our new generative AI models and making them directly accessible through an API to the developer community, as well as making a number of these new products available.”
No. 10: Google To Employees: Come Back To The Office In 2023
Google was one of the first large technology companies to tell its employees to voluntarily work from home as the COVID-19 pandemic was beginning to take hold in America in 2020.
However, Google this year made it clear that it wants its workers to come back to the office in 2023 by recently updating its hybrid work policy, requiring most employees to physically come to the company’s offices at least three days a week. Google is also reportedly tracking attendance with office badges, and including office attendance as part of its employee reviews.
Google is also requesting those employees who previously had approval to work from home to reconsider coming to the office on a hybrid work schedule as those employees who were pre-approved to work from home full-time may find that approval now rescinded.
“Our offices are where you’ll be most connected to Google’s community. Going forward, we’ll consider new remote work requests by exception only,” said Google in a recent internal memo to employees.”
The Takeaway : This year, Google made its hybrid and remote work strategy officially known: it wants employees back in the office.
No. 9: Google Cloud Sales Grow Faster Than AWS, Microsoft
Google Cloud continued to grow revenue faster than its two larger cloud competitors, AWS and Microsoft, as sales increased 28 percent year over year during first quarter 2023. Both AWS and Microsoft grew cloud revenue at approximately the same rate during the quarter at 16 percent growth year over year.
Google Cloud generated total sales of $7.45 billion in the quarter, up from $5.82 billion revenue in first quarter 2023, while turning a profit for the first time ever. AWS’ total sales of $21.4 billion in first quarter 2023 represents a 16 percent increase year over year compared to $18.4 billion. Microsoft’s Intelligent Cloud segment generated revenue of $22.1 billion, up 16 percent compared to $19 billion year over year.
As of first quarter 2023, Google Cloud’s worldwide cloud services market share stands at 10 percent share, trailing Microsoft at 23 percent share, and AWS at 32 percent share, according to data from IT research firm Synergy Research Group.
The Takeaway : Although Google Cloud’s total revenue is smaller than AWS and Microsoft, Google has been growing its cloud sales at a faster clip over the past several quarters.
No. 8: Google Cloud Launches ‘Biggest’ Cloud Migration Program Ever
Google is aiming to accelerate cloud migrations to Google Cloud 10 times faster with its new Rapid Migration Program (RaMP) that accelerates the process by placing all of Google’s products, programs and engagement models into the unified program.
The program will include a new RaMP Deck that closely tracks large-scale migrations between the customer, partner and account teams. The RaMP program also includes a robust inventory of tools to help automate migrations such as StratoZone to discover and assess workloads to migrate.
On the channel front, Google Cloud Migration Specialization partners are being on-boarded into the program with the ability to generate larger financial incentives and more resources available.
“We’re going to bring everything into one motion with RaMP, which is our biggest investment and focus area for accelerating cloud migrations to date,” said Stephen Orban, Google Cloud’s vice president of migrations, told CRN this year. “We’re working very closely with partners to align our best practices with their approach, with a goal of 10Xing how quickly and reliably our customers are able to migrate so they can see faster value of moving to the cloud and fund more of those new initiatives.”
The Takeaway : Google invested serious dollars in streamlining and automating customer migrations to Google Cloud for the channel, with the hopes of driving cloud sales more quickly.
No. 7: Google Boosts Cybersecurity Portfolio, Partnerships
Following its blockbuster $5.4 billion acquisition of Mandiant last year, Google Cloud launched a slew of new security offerings and partnerships this year to keep advancing its cybersecurity portfolio.
Google introduced new threat detection, investigation and response (TDIR) for Google Cloud Platform as part of its Chronicle Security Operations offering. The platform now offers “turnkey” TDIR for securing Google Cloud environments with capabilities including simplified ingestion of cloud telemetry; “out-of-the-box” detection rule sets that eliminate the need to create detection rules; and “cloud-specific context” that has been correlated with other data from an organization’s environment to accelerate investigation efforts.
For its Security Command Center platform, Google launched Attack Path Simulation that can proactively address threats in the cloud. The new simulation capability can automatically analyze a Google Cloud environment to identify the most likely places for an attacker to target that uses Security Command Center to continuous scan the environment.
On the partner front, Google Cloud create new partnerships with security and data protection companies to boost its cybersecurity offerings. For example, Google formed a partnership with Cohesity to developing technology based on Vertex AI to gain improved insights on data to give customers the ability to do fast searches across exabytes of data store in Google’s cloud to find potential threats, recover data or find answers.
The Takeaway : Google Cloud understands cloud security is top-of-mind for nearly every customer. The innovation engine in 2023 has been high to meet the ever-growing need for better cybersecurity tools.
No. 6: New Workspace AI Innovation And Pricing
Google Workspace—the company’s popular suite of collaboration and productivity applications like Gmail, Meet, Docs and Calendar—was revamped in 2023 with new features and pricing.
On the innovation front, Google injected new generative AI writing capabilities into Gmail and Docs that creates content instantly when users simply type in a topic. This year, Google Slides users will be able to bring to life their creative vision with auto-generated images, audio and video. For Google Sheets, users can go from raw data to insight and analysis via auto-completion, formula generation and contextual categorization inside Sheets. For Google Meet, users can generate new backgrounds and capture notes.
The new Duet AI For Google Workspace brought together all of Google’s powerful generative AI features and lets users collaborate with AI so they can get more done every day.
On the pricing front, Google increased the price of its Google Workspace Enterprise Standard edition as well as increasing Workspace Flexible Plan pay-as-you-go subscriptions by 20 percent. For example, Workspace Business Plus: the Flexible Plan price is now $21.60 per user, per month, up from $18.
Google also introduced an Annual Plan option for all Google Workspace editions as a way for organizations to commit to a longer-term agreement, which allows customers to lock-in the lowest price per-user.
The Takeaway : Google Workspace will consistently be improved with AI for the foreseeable future with potential price increases due to all the new features.
No. 5: Google Doubles Down On Partner Enablement Around AI
From launching a new Built with Google Cloud AI partner program to funding partner-led generative AI workshops with customers, Google knows the channel is vital for them to become a leader in artificial intelligence and generative AI. This is why Google in 2023 launched a slew of new programs, strategic AI partner agreements and tools to enable partners to learn, sell and manage AI solutions for their customers.
A new partner program called Built with Google Cloud AI helps partners start building applications using Google Cloud’s AI services. It grants them access to Google AI and machine learning experts who assist in the use of APIs, reference architectures as well as building apps.
Google Cloud also created new capabilities for its online Google Cloud Marketplace store like its new Model Garden to create a sharing environment for generative AI models. Additionally, the company set up several go-to-market programs and MDF available to partners to drive generative AI customer wins. For example, Google provides funding for partner-led generative AI workshops with customers as well as go-to-market solution kits for generative AI.
“I have seen a lot of technology waves. This is not a hype cycle. The ROI is real,” Kevin Ichhpurani, Google Cloud’s partner ecosystem leader, recently told CRN. “You can almost go into a meeting and never get off of this [generative AI] discussion because it’s front and center on every board agenda right now.”
The Takeaway : Google is putting its money where its mouth is in terms of enabling its massive partner base to drive new customer AI deals and services sales. This will likely help Google become a domain player in the AI space.
No. 4: No Upfront Commitment Needed For Google Cloud Anymore
Google Cloud launched Flex Agreements this year in a bold move to allow customers to migrate their workloads to the cloud with no up-front commitments. As part of this new Google licensing option, customers still get access to Google Cloud incentives such as cloud credits and monthly spending discounts.
“It really lowers the barrier of entry in terms of giving the best of Google Cloud without a big upfront financial constructor,” Tony Safoian, CEO of SADA, one of Google Cloud’s top partners in the U.S. told CRN at the time. … They’re giving customers what they want: more choice, more flexibility.”
Customers previously needed an upfront commitment—such as signing a large multi-year Google Cloud commitment—in order to reap the benefits of a certain set of incentives like cloud credits or discounts based on monthly spending or committed use. For example, Google’s Committed Use Discounts (CUDs) provide discounted prices in exchange for a commitment to use a minimum level of cloud resources for a specified term.
The three new pricing editions: Standard, Enterprise, and high-end Enterprise Plus tier as part of its cloud portfolio.
The Takeaway : The company removed some financial barriers of entry for budget-constraint customers to start consuming Google Cloud. This move will likely grow Google’s customer base.
No. 3: Google Lays Off 12,000 Employees, But Headcount Grows In 2023
Possibly the biggest news in the tech sector in 2023 has been the massive amount of layoffs conducted by IT companies of all shapes and sizes—from Microsoft to Marvell and more—as tens-of-thousands have been let go.
In January, Google parent company Alphabet began laying off 12,000 employees.
However, it is key to note that Google’s headcount is larger in 2023 compared to 2022 even after the layoffs of 12,000 employees. As of April 2023, Google’s total headcount was 190,711. In April 2022, the company’s headcount was 163,906—about 26,800 less than in April 2023.
CFO Ruth Porat said in April that Google is “meaningfully slowing the pace of hiring in 2023, while still investing in priority areas, particularly for top engineering and technical talent.”
The Takeaway: Google’s headcount is larger in 2023 compared to 2022 even after the 12,000 layoffs this year. These numbers, as well as Google’s pledge to continue hiring top technical talent, bodes very well for Google Cloud employees for the remainder of 2023.
No. 2: Google Cloud Turns A Profit For First Time Ever
After years of generating an operating loss, for the first time in its history, Google Cloud turned a profit during the first quarter of 2023.
Google Cloud generated operating income of $191 million for the quarter by generating total revenue of $7.45 billion, an increase of 28 percent year over year. Comparatively, during the first quarter of 2022, the company reported an operating loss of $931 million.
“Over the past three years, GCP’s annual deal volume has grown nearly 500 percent, with large deals over $250 million growing more than 300 percent,” said Google CEO Sundar Pichai during the company’s Q1 earnings report. “Nearly 60 percent of the world’s 1,000 largest companies are Google Cloud customers.”
Looking at the history of Google Cloud’s operating loss: in fourth quarter 2022, the company generated an operating loss of $480 million. In third quarter 2022, Google Cloud reported an operating loss of $699 million. For its second quarter 2022, Google Cloud generated an operating loss of $858 million. These losses can be somewhat contributed to Google spending billions on building new data centers across the globe to power and expand its cloud services.
The Takeaway: For its entire fiscal year 2022, Google Cloud reported an operating loss of nearly $3 billion. The turn from operating at a loss to generating profitability is a massive win for Google Cloud, highlighted by a 28 percent increase in sales.
No. 1: Google Cloud’s Focus In 2023: Generative AI
Google CEO Sundar Pichai said the company is at an “inflection point” in AI and the need to launch new products is more important than ever before.
“We have an opportunity to make AI even more helpful for people, for businesses, for communities, for everyone,” Pichai said during Google’s I/O 2023 event in May. “We’ve been applying AI to make our products radically more helpful for a while. With generative AI, we’re taking the next step.”
Google has injected generative AI capabilities inside flagship products in 2023 while also consistently adding new features to its conversational chatbot Bard. One big launch was the new Generative AI App Builder in 2023, which Google says is now the fastest way for developers to jumpstart the creation of AI apps such as bots, chat apps, digital assistants and custom search engines, with limited technical expertise required.
On the enterprise front, Google Cloud recently launched PaLM API, a developer offering to make it easier and safer to experiment with Google’s large langue models (LLMs). PaLM API provides access to models that are optimized for multi-turn use cases— such as content generation and chat, as well as general-purpose models optimized for areas like summarization and classification. PaLM 2 was launched in May and offers stronger models in logic and reasoning.
Another new offering is Duet AI for Google Cloud, which is an AI-powered collaborator to help cloud users of all skill levels solve their everyday work challenges. Google Cloud also recently enabled generative AI support for Vertex AI, which is the company’s machine learning platform for training and deploying ML models and AI applications.
“We remain deeply committed to responsible generative AI,” said Google Cloud CEO Thomas Kurian this year. As mentioned in previous slides, Google has also built new partner programs and formed new AI vendor partnerships to drive generative AI market momentum.
The Takeaway : Since OpenAI’s ChatGPT sent shockwaves throughout the world in late 2022, Google Cloud has been investing more resources in generative AI than ever before to ride the new wave of AI. Google has the willpower, workforce and war chest to become one of the biggest AI companies on Earth. This year’s strategy proved that Google plans to do just that.