How Google is getting more aggressive in the cloud

(c)iStock.com/tarik kizilkiya

  • Deutsche Bank estimates Google Cloud Platform (GCP) has a $750M revenue run-rate estimate today.
  • The combined revenues of AWS, Microsoft Azure, and GCP are still less than $15B for a market penetration of just 1%-2% of the Total Available Market (TAM).
  • During the 2Q16 call, Google called out cloud as the primary driver of the re-accelerating growth for Licensing and Other revenue, the first time the business has been called out in pole position.
  • Recent Orbitera and Apigee acquisitions underscore Google’s new focus and aggressiveness to grow GCP. Google has spent $1B+ on Cloud M&A over the past 12 months.
  • Deutsche Bank predicts GCP is preparing a series of new product announcements in September to strengthen their customer-facing roadmap further.

These and other insights are from Deutsche Bank Markets Research study, Google Getting More Aggressive In The Cloud, (client access) published 8 September 2016 by Ross Sandler Karl Keirstead, Deepak Mathivanan, Aki Aggarwal and Taylor McGinnis. Deutsche Bank found that Google is investing heavier in the cloud, making a financial commitment with over $1bn in acquisitions in the past year including the recent Apigee deal. The study is based on interviews Deutsche Bank contacted with channel partners, prospects, partners, and customers. Despite the renewed focus on growth, Deutsche Bank predicts that GCP would continue to trail AWS and Microsoft Azure for the foreseeable future.

Key takeaways of the Deutsche Bank Markets Research survey include the following:

  • Deutsche Bank defines the Total Available Market (TAM) enterprise IT spend in nine categories that together account for over a $1T TAM. Deutsche Bank defines the enterprise IT spending market by combining storage, network equipment, infrastructure software, IT outsourcing and support, data management software, BI/analytics, application software and consulting Deutsche Bank sees AWS make significant progress across a wide spectrum of their taxonomy categories.

IT Infrastructure TAM

  • GCP new product launches are concentrating on machine learning, data analytics and security, including data encryption and identity and access management. Google’s aggressiveness regarding the cloud is most visible from their new service announcements shown in the table below.  Recent announcements include SQL Server Images, where customers can now natively spin up Microsoft database instances on GCP, akin to AWS RDS for SQL Server. GCP also announced a second generation version of Cloud SQL, its cloud-hosted alternative to MySQL and AWS Aurora. While all of these announcements provide GCP with greater potential to compete against AWS and Microsoft Azure, Google’s two larger competitors have formidable momentum in enterprises.

new service announcements

  • Aggressive build-out of global infrastructure locations continues. Google announced during their 4Q15 earnings call they would build 12 new regions in 2016 and 2017. Of the 12 new planned GCP regions, the US Western region in Oregon opened in July 2016, and Google has said that the new Tokyo region will be available later this year, leaving ten more regions to be added in 2017.

infrastructure

  • Google continues to believe in the importance of machine learning and artificial intelligence. Deutsche Bank interviews with GCP customers confirmed interest in using machine learning and artificial intelligence on the cloud. Customers also perceive GCP is well ahead of AWS and Azure in this regard.
  • Google is quickly hiring enterprise sales reps in an attempt to close the sales gap between themselves and AWS & Microsoft Azure. Deutsche Bank found that Google has been “hiring very aggressively” to scale its enterprise sales rep capacity and also retrofitting existing sales reps from elsewhere in Google into GCP.
  • GCP is gaining share rapidly within the startup community. Deutsche Bank spoke with customers who estimated that 25% startups are using GCP today (with 75% on AWS), while another estimated the ratio to be 20%/80%. While both agreed that a couple of years ago only 10% of startups were using GCP (with 90% using AWS). During the GCP NEXT Asia-Pacific keynote earlier this month Google disclosed that Snapchat “is one of our largest customers,” making up to 2 million queries per second and consuming more Google bandwidth than any other organization except for YouTube.
  • Recent Orbitera and Apigee acquisitions underscore Google’s new focus and aggressiveness to grow GCP. Last month Google acquired Orbitera, a small cloud commerce platform. Orbitera simplifies the buying and selling of cloud-based software by providing vendors with packaging and provisioning, billing, and marketplace solutions on AWS and Azure. Earlier this month Google acquired Apigee for $625M, which is 5.2x Apigee’s FY17e revenues of $120M. Apigee is expected to grow by 30%-35% in The company focuses on larger enterprises (Walgreens, Nike, Target, AT&T) and despite an ongoing mix shift to the cloud or SaaS model, it still has a legacy on-premise license/maintenance business.
  • Google is very focused on building relationships with all systems integration (SI) firms but that building out a GCP channel is proving to be challenging. Deutsche Bank believes that Microsoft is also finding it tough to build out its Azure channel, in part because many traditional partners and resellers struggle with how they can monetize Azure, given its different price points and the lower services attach rate. 

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With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as “IoT-Ready” as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices – computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades.

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Improving Customer Service with Cloud

Have you ever wondered what thoughts run in your customers’ minds when they decide to buy or not buy your product? These thoughts can determine whether a particular person is going to buy your product or not. Much of these thoughts are based on a range of factors such as the level of customer service they get from the company, quality of a product, personalization, and more.

A survey conducted by Harris International shows that one in four adults in the US do not feel any brand royalty, while 56 percent of respondents said that they’ll switch brands to get better customer service and personalization. This study makes it clear that customers are still the kings, and companies have to compete with each other to grab their attention.

How can cloud help?

Cloud can provide the infrastructure to store and analyze vast amounts of data that can provide insight into the patterns and behavior of customers. In fact, technologies like machine learning and predictive analytics are based on the cloud.

Machine learning is a process by which you “train” machines using algorithms to look for patterns. When you help these machines to “learn”, they can help you find patterns that humans are sure to miss, especially when you’re sorting through zillions of data.  Moreover, machine learning when combined with cloud is a powerful tool as it can access huge data sets including those that are generated on social media, besides information collected by your company. With such huge amounts of data and extensive computing power, it’ll be easy to get the insights you want about your customers.

The best part is you can provide a personalized experience for each customer, and this is sure to boost their loyalty towards your brand. A case in point is the interactive customer service approach by European soccer club Real Madrid. Whenever any user connects with them on social media or visits their website, machine learning algorithms divide them into different subgroups. This strategy is based on the fact that every customer has a different reason to connect with the club. Some customers may like certain players, some would like to know the team schedule, and others might just like the team as a whole.

To give a personalized experience, they are divided into subgroups, and they’re given information based on the sub-group to which they belong. For example, if a fan likes Cristiano Ronaldo and he connects with the team on social media to know more about him, then he gets updates when Ronaldo makes appearances, scores goals or does anything else. This way, that fan gets just the personalized information he wants. Such a customer experience is possible only due to the emergence of cloud, and technologies like predictive analysis that use it.

There are many such examples, where companies have benefited by understanding their customers better. They’re also in a better position to use targeted marketing strategies to increase their revenue and profits.

In this sense, cloud has become a vital tool for providing superior customer service.

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All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in – resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud.
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VMware notes good and bad with decentralised IT – and how cloud is driving it

(c)iStock.com/DNY59

It’s a discussion which has rumbled on for years; does a centralised or decentralised model of IT work best? According to new research commissioned by VMware, cloud computing has become key to the decentralisation of IT – and while it may ease the pressure in some areas, security, management and compliance issues remain.

The latest release, titled State of the Cloud, represents the second half of VMware’s study, with the former, The IT Archipelago, being conducted by the Economist Intelligence Unit and the latter by research firm Vanson Bourne.

According to the 3,300 respondents across 20 countries, more than two thirds (69%) said that the management of IT has continued to decentralise over the past three years, while a similar number (65%) of IT-based respondents said they want IT to be more centralised. Three quarters (74%) say IT should be responsible for enabling other lines of business to drive innovation.

On the flip side, more than half (57%) agree that decentralisation has resulted in non-secure IT solutions being purchased, while 56% said it means a lack of regulatory compliance and data protection. Three in five (61%) have concerns that decentralisation results in some duplication of IT spending, while on average businesses are seeing a 5.7% increase on IT spend.

Naturally, VMware has its ready-made solution to the problem in the form of VMware Cross-Cloud Architecture, a product which aims to provide, in the words of the press materials, ‘the world’s most complete and capable hybrid cloud architecture to enable consistent deployment models, security policies, visibility, and governance for all applications, running on premises and off, regardless of the underlying cloud, hardware platform or hypervisor.’ As this publication noted when the move was announced at VMworld back in August, it represented an extension of the company’s hybrid cloud strategy, positioning itself as an enabler for business running on other, more populous, clouds.

The study also looked at regional trends. For EMEA, 57% said decentralisation is making the IT department’s job more challenging, while seven in 10 respondents in Asia Pacific said it makes their organisation more innovative and more responsive to market changes.

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[video] Data Management for the Cloud Era | @CloudExpo @Commvault #Cloud #DigitalTransformation

As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enterprise.

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