By Jay Greene
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 9, 2019).
Weeks into his new job as head of Google's cloud business,
Thomas Kurian identified a chief complaint from big business
customers: They often didn't have account managers to call.
Understanding corporate customers is precisely why Google hired
Mr. Kurian, who spent two decades at longtime adversary and
competitor Oracle Corp., including running product development.
Customers are happy with Google's technology, he said, but not
their lack of access to sales managers to cater to their needs -- a
basic business tactic.
Mr. Kurian said he has simplified contracts for different types
of businesses instead of a one-size-fits-all approach, and has
moved to more predictable pricing, in a way corporate buyers
appreciate. He intends to dramatically boost Google Cloud's sales
and support staff.
"There are certain things that you learn having dealt with
enterprise customers for 22 years," Mr. Kurian said in an
interview.
Clawing a bigger piece of the cloud is crucial for Google, a
unit of Alphabet Inc., to diversify beyond online advertising. The
ad business -- which has come under heat as users and legislators
scrutinize how tech companies treat personal data -- contributed
83% of Alphabet's fourth-quarter revenue. Despite Alphabet's hefty
investments in cloud computing, self-driving cars and other bets,
those businesses are tiny relative to what Google makes from
ads.
As the cloud-computing industry surged, Microsoft Corp. -- not
Google -- emerged as Amazon.com Inc.'s top rival in providing
on-demand computing power and storage, also known as cloud
infrastructure.
Microsoft had 13.3% of the world-wide market in 2017, according
to Gartner Inc.'s most recent data. Amazon, which pioneered the
business, held 51.8%. Google's share: 3.3%.
Google Cloud had prioritized developing technology over sales
and support, said Gene Reznik, strategy chief at the consulting
firm Accenture PLC, which helps clients deploy tech from major
cloud services including Google's.
"There is a lot of hand-holding required" with big corporate
customers, Mr. Reznik said. But Google often had product engineers
rather than account managers handle customer calls. "It really
wasn't their day job, " he said, adding that Mr. Kurian brings a
corporate credibility to Google's "consumer-centric culture."
Mr. Kurian, who regularly met with customers at Oracle even as a
top engineering executive, said he recognizes the challenge. He has
his first big chance to lay out his vision for closing the gap with
Amazon and Microsoft when Google begins its annual cloud-computing
conference Tuesday in San Francisco.
There, he plans to pull from the playbook of Oracle, which has
struggled in cloud computing but has been a leader selling database
software. Mr. Kurian will detail a dramatic ramp-up in Google
Cloud's sales team and unveil new technology enabling programmers
to develop applications that can run on Google Cloud as well as on
services from Amazon and Microsoft -- comparing it to Oracle's
widely used Java computing language.
The two have battled in courts for nearly a decade over Oracle's
claim that Google's Android smartphone operating system infringed
on copyrights related to Java. Oracle has sought as much as $9
billion in damages.
Their complicated relationship added another wrinkle when Mr.
Kurian made his way to Google late last year. Before he left
Oracle, he and the company said he was on an extended leave; a few
weeks later, Oracle said he left. Less than two months after that,
he was hired by Google.
Analysts give Google Cloud credit for its technology,
particularly the services that help large corporate customers
analyze data. But the company trails its two big rivals when it
comes to providing sales and support services that those enterprise
customers demand.
"They are running out of time," said Matt McIlwain, managing
director of Madrona Venture Group LLC, a Seattle venture firm that
invests in cloud startups. "If they don't get the enterprise
selling right, they aren't going to win."
One shortcoming, for example: Google's contracts didn't often
account for the diversity of its customers' needs, said Sri
Shivananda, chief technology officer at PayPal Holdings Inc., a
longtime Google Cloud customer. "You could see that Google was
learning on the fly."
For most of its corporate life, Alphabet has focused on its
advertising business. But Mr. Kurian said Google Chief Executive
Sundar Pichai committed to investing enough for the cloud business
to compete against its larger rivals.
"That's why they brought me here," Mr. Kurian said.
Mr. Kurian declined to provide specific figures but estimated
his sales force is between one-10th and one-15th the size of sales
forces at Amazon Web Services and Microsoft's Azure, which don't
disclose such figures. Within two years, Mr. Kurian expects his
sales staff to be about half their size. At the end of last year,
Alphabet's total head count, including its core advertising
business, was 98,771.
"It would seem difficult to absorb that many people in so short
a time," said Stifel Nicolaus Co. analyst Brad Reback, who tracks
cloud-computing companies but not Alphabet. Mr. Kurian said Oracle
added as many as 4,000 sales staff in a year.
He plans to emulate another Oracle tactic: market
specialization. Much of Google Cloud's sales force will focus on
specific industries, such as health care or auto manufacturing, to
better cater to their needs.
Some customers, though, hope Mr. Kurian won't bring Oracle's
famously high-pressure sales approach. "As much as he brings the
enterprise focus to the table, there are some who worry that he
brings Oracle to the table," said Andy Zitney, chief technology
officer at the tech unit of McKesson Corp., referring to hardball
sales tactics some Oracle customers had criticized.
McKesson, a pharmaceuticals and health-care products
distributor, signed a deal with Google Cloud in January to use its
analytics services, in part, to improve its manufacturing and
distribution operations. It didn't disclose financial terms.
Write to Jay Greene at Jay.Greene@wsj.com
(END) Dow Jones Newswires
April 09, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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