Thomas Kurian On Google Cloud’s AI Differentiators Vs. Rivals AWS, Microsoft
The CEO discusses what he says are the advantages Google Cloud has over its two main rivals, the big money-making opportunities for AI MSPs, and how Google is investing heavily to enable GenAI sales opportunities for partners.
CEO Thomas Kurian is bullish on Google Cloud’s artificial intelligence innovation and market position over competitors Microsoft and Amazon Web Services for a variety of reasons.
“We built the world’s best AI infrastructure for training and serving models. When I say that: cost, performance, scale, throughput—all metrics,” Kurian told CRN. “If you’re building an application, you’re going to have half the cost, which is critical for people when they adopt it.”
The Mountain View, Calif.-based cloud giant has poured millions into launching new generative AI products this year to boost flagship platforms like Google Workspace and Google Cloud Platform, as well as a $2 billion investment in GenAI startup Anthropic.
From Google Cloud’s openness and data expertise to its partner services strategy, Kurian says Google has a leg up over the competition when it comes to AI.
By The Numbers: Google Cloud Vs. Microsoft And AWS
The fast-growing cloud giant generated a record $8.4 billion in revenue during its recent third quarter 2023, representing a 22 percent year over year growth rate. This 22 percent sales growth rate increase was higher than both Microsoft, which increases sales by 19 percent year over year, and AWS who reported a 12 percent revenue increase year over year in Q3 2023.
Google Cloud’s run rate is currently the highest in the company’s history at $33.6 billion.
[Related: Google Cloud CEO: AI MSPs Are The Future]
Worldwide spending on enterprise cloud infrastructure services hit $68.1 billion in Q3 2023, up $10.5 billion year over year, according to data from Synergy Research Group. In aggregate, Google Cloud, AWS and Microsoft accounted for 66 percent of the worldwide market. As of Q3 2023, AWS owns 32 percent global cloud market share, followed by Microsoft at 23 percent share, then Google Cloud at 11 percent share.
Thanks to a surge in sales and customers clamoring for Google Cloud solutions, for the first time in its history, the company reported an operating profit in every quarter this year. For example, in Q3 2023 Google Cloud generated an operating income of $266 million, up from an operating loss of $440 million year over year.
Kurian touts Google Cloud partners as one of the main reasons why his company is excelling versus the competition when it comes to sales growth and AI market momentum. “[We’re] enabling system integrators, ISVs and making substantial investments to drive the ecosystem and investing in them so they can help build the business with us helps our customers and users have access to these types of great resources,” he said.
In an interview with CRN, Kurian explains why Google Cloud is besting competitors Microsoft and AWS in the red-hot AI market.
What is Google Cloud’s market differentiation in AI versus AWS and Microsoft?
We look at it as five important things. The first one, we built the world’s best AI infrastructure for training and serving models. When I say that: cost, performance, scale, throughput—all metrics. If you’re building an application, you’re going to have half the cost, which is critical for people when they adopt it. To show proof of that, 70 percent of theA I unicorns and 50 percent of all AI startups use our GCP [Google Cloud Platform]. So these are the people who are knowledgeable, and they’re voting with their feet.
Secondly, when you look at companies and you look at solution partners like systems integrators, etc., they want a platform. AI is not about just the model, it’s about all the tools you need around the model.
What do you mean by that?
Imagine you’re building a customer service example and you’re building with a model. How do you make sure the model doesn’t start abusing the customer? How do you make sure when you ask a question about ‘What’s my bill?’ you get an answer [that is] 100 percent accurate 100 percent of the time.
You can’t have, ‘Oh, well, sorry. We made a mistake 20 percent of the time because our model hallucinates.’ So there’s a collection of services that go around the model. And we give people a platform, based on all the experience we have at Google, that enables them to have all the services around the model. That’s why they’re able to go faster.
What are Google Cloud’s other market differentiators?
Third, we give them a choice of a variety of different types of models: from Google, from open source and even from third parties. It allows them to choose the model that they want. You know that garbage in is garbage out. So if your data is not clean, no matter what—your model may be an elegant model—but it won’t work. So we’ve got all that as a technology foundation.
Four, we have a long history of integrating AI models into our products. Just saying, ‘I’ve got a model’ is not as capable as saying, ‘It’s integrated inside the product.’ Because the experience people have inside the product—How good are your prompts? How many times do I have to ask a question in the prompt to get an answer back?—that’s expertise we’ve built for a very long time.
Gmail, just as an example, our productivity tools, we integrated AI inside of them 10 years ago. So [we brought] that expertise in terms of how we make models work efficiently inside products to Google Workspace and to Google CloudPlatform using Duet AI. And that enables partners to build solutions much more quickly around it because we’ve done it.
Then lastly, unlike the competitors who have large services organizations, we’re not going to customers saying, ‘You have to use our services.’ In fact, we’re telling customers, ‘Start with your systems integrator, the consultant, the technology partner, the AI MSP that you’re comfortable with.’ What we’re going to do is make our services people assist them on the project. That’s a very different approach than saying, ‘Well, I’m not sure if my partner has the expertise so I’m taking the business direct.’
As you see the need for a next-generation AIMSP, what are the money-making opportunities for them?
There are three big things that we see. First of all, a lot of historical cloud computing technology, infrastructure and analytics were primarily sold in the IT department. With generative AI, a partner can sell into the IT department a high-value solution—for example, a high-value solution like restructuring the way that software engineers work or improving the way that IT helpdesks work. Because today, we have companies deploying our solution to automate things like password resets, etc. So one [opportunity is that] you can sell more in the IT department.
Secondly, you can sell in every customer-facing department. Marketing, sales and services is a big area of innovation using generative AI. Every bank is rethinking how they serve customers. Telecommunications companies are rethinking their call centers. Hospitals are thinking about how they redo scheduling. All of that is using generative AI. So it’s an opportunity for partners to sell outside IT to those functions.
Third, many CEOs see this as a way to make their companies more streamlined. Take as an example the work we’ve done at Vodafone. Using our AI, they’re able to find all the contracts that they have with thousands and thousands of suppliers with the terms, conditions, etc. so they can be much more efficient in their supply chain. These are back office opportunities.
So we’re creating opportunity in every function in the back office: ‘How do you buy things? How do you work with suppliers? What’s your contract exposure? What’s your accounts payable?’ So it’s a brand new part of the company where systems integrators, solution partners and independent software vendors can sell.
How large are the opportunities for AI MSPs in terms of scale?
These are not projects where you get in and get out. Because eas the models evolve and get more capable, and the customer succeeds in one domain, they’re likely to say, ‘Wow, you automated my IT help desk. Why don’t you come and help me look at my HR help desk?’ HR help desk is the place that people go to ask for benefits, information, medical insurance, all of these things.
So there is a lot of potential business opportunity. And it’s the one time where we have seen that technology decisions are being done in the IT department, but also outside the IT department in every business line in these companies.
It’s happening at small businesses because small businesses also want to get the benefit. They don’t have the IT expertise. That’s where they need somebody who can just do it as a managed service. Larger businesses see the potential to change the business model in a real way.
So across from small to large, we see tons of interest. It’s the one time where we’ve seen the demand emerging globally. It’s not just happening in the United States, it’s happening virtually in every country around the world.
How are you enabling partners to become AIMSPs?
We’re enabling partners in a number of different ways. The first is training them. For example, we’re training them not just on the products, but what are all the customer use cases that are coming in? So [then] they can start thinking of solution packages that they can put together.
Second, we’re investing in demand generation and lead generation for them. We have so much interest in our AI products that we are running events to teach people about AI. People come to our AI events, then we give the leads to the partners. So it’s not just [that] they got trained and they have access to the latest models and have access to the solutions people are demanding but now they are being given a customer lead.
Third, we’re enabling them with specialized support from our technical experts. So they need support when they’re engaged on a project and they’re like, ‘Hey, I’m seeing this. Am I doing it right?’ We have technical experts who can engage with them on that. We’re doing this not just with consultancies, but with independent software vendors. You’ve seen our announcements with Workday, Salesforce, UKG, DocuSign—there’s a long list of ISVs.
So why are we doing it with the independent software vendors? So when people work with their products, the models work naturally as part of the product. You don’t have to leave it to use a model. It’s integrated into your experience.
For example, people want to use our Google Workspace productivity tool with Salesforce. We showed them how they can do it. As an example, I’m in Workspace and I write a sales proposal. I’m using AI to write that sales proposal. If it’s an early stage opportunity, you want to write with one set of information. If you’re writing a closing letter because you’re almost done with closing the deal, you would write differently. Now the information about that opportunity sits in Salesforce. So we’ve integrated our AI tools with Salesforce, so that when you’re writing in Workspace you can literally just access information from Salesforce. And the model can use that information to write intelligently.
Enabling system integrators, ISVs and making substantial investments to drive the ecosystem and investing in them so they can help build the business with us helps our customers and users have access to these types of great resources.