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Does Google Cloud have a trust issue?

FEB 09, 2021 | Matt Hatton
 
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The Transforma Insights team is currently engaged in an extensive set of research on providers of products and services for enterprise digital transformation (DX). One major part of this research relates to the so-called hyperscalers: AWS, Google and Microsoft. In recent months we have published reports looking at the strategies of AWS and Google Cloud, with a forthcoming report on Microsoft due later this month. The subject of this blog post is Google, and specifically whether it has a trust issue that will puts it at a disadvantage compared to its rivals.

Before we get into that it’s worth setting the scene a little. Google is desperate to be seen as a diversified technology company rather than just a search advertising company. If it’s the former it has a market share of a couple of percent, if it’s the latter it’s probably over 75%. In that context, many of the investments that it makes are aimed at portraying it in a particular light. It doesn’t matter so much whether they succeed or not.

We have seen numerous examples where Google has allowed projects to fail. Examples include Revolv, whose smart home products were shut down by Google, Stadia game development studio, and Google Health. Recently it dumped Loon, its plan to provide connectivity with hot air balloons in the upper atmosphere. It sounds crazy. It might have worked. But it didn’t really matter to Google if it did or not.

The question is this: does allowing those companies, products or projects to fail have a negative effect on its brand image when it comes to its other business? Clearly not to its core search business. But what about other enterprise services on which clients may come to rely. Our recent report on Google Cloud examined its rather thin portfolio of products aimed at enterprise digital transformation. Those products are potentially critical systems for any company adopting them. Moving to Google Cloud or to Workspace is a major undertaking. And even for smaller propositions, such as Contact Center AI it’s likely to become an important part of an organisation’s processes. It will surely cross the mind of many enterprises before they commit to such a move that perhaps Google will get bored with those too.

Which lines of business might get cut? Cloud computing? Probably not, because it’s a nicely profitable side-line to its main business. At least at the moment. Other enterprise applications? Who knows? There’s certainly more chance of it shutting down Workspace (what used to be G-Suite) than there is of, say, Microsoft abandoning Office (which is, frankly, unthinkable).

What about even more specialist capabilities which might prove unprofitable. Enterprise services like Contact Center AI or Looker, for enterprise data analytics and visualisation, are distinctly non-core for Google. It’s very easy to see a company embedding those capabilities into its systems only for them to be switched off.

The point is that Google can’t have it both ways. If it’s a diversified technology conglomerate it has to expect that the way it treats some of its products will be perceived as how it might treat all of its products. It has quite a bit of work to do to persuade the market that its products will be in for the long term. Fundamentally, any enterprise strategy should be a commitment: well thought through, cohesive, and built for the long term. This is different to the type of strategy that has worked spectacularly well for Google until now in consumer-facing markets.

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