- Google Cloud’s strategy to catch up to Amazon Web Services and Microsoft Azure in the cloud-computing market could include a “major strategic acquisition” of a public cloud vendor, Wedbush Securities analyst Dan Ives predicts.
- Ives told Business Insider potential Google Cloud acquisition targets include Workday, Palo Alto Networks, ServiceNow, and Splunk.
- Google Cloud is the No. 4 player in the cloud market behind Amazon Web Services, Microsoft and Alibaba.
- According to a source who spoke to Business Insider in August, new CEO Thomas Kurian told employees Google Cloud has a five-year goal to become “at least the No. 2 cloud.”
- To get there, Google Cloud has already announced plans to acquire a data-analytics company called Looker in multibillion-dollar deal, revealing one of its core cloud strategies.
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As Google seeks to catch up to Amazon Web Services and Microsoft Azure in the cloud, Wedbush Securities analyst Dan Ives predicts that Google Cloud CEO Thomas Kurian will lead the company to acquire a public cloud vendor.
“Google and its major cloud initiative, [Google Cloud Platform], will potentially make a major strategic acquisition of a public cloud vendor to catalyze Kurian’s efforts chasing after the likes of MSFT and AWS in the $1 trillion cloud race,” Ives wrote in Dec. 30 industry note.
Potential Google Cloud acquisition targets, Ives told Business Insider, include publicly-traded entities like cloud-based finance and human resource firm Workday (valued at some $37 billion at the time of writing), cybersecurity provider Palo Alto Networks ($23 billion), cloud software company ServiceNow ($53 billion) and data-analytics company Splunk ($23 billion).
While there’s no indication that Google has so much as looked at any of these companies, they show that in Ives’ estimation, the company needs to spend big to catch up to its rivals.
“[Google Cloud Platform] is miles behind Microsoft and Amazon,” Ives told Business Insider. “Kurian & Co. need to acquire a cloud apps or infrastructure player to gain a toehold into this market. [Workday, Palo Alto Networks, ServiceNow, and Splunk] are the tech cloud stalwarts that stick out.”
Acquisitions have already been part of Google’s cloud strategy. Google this summer announced plans to buy data-analytics company Looker for $2.6 billion. The deal has yet to close, pending regulatory review in the UK. Google in November also bought CloudSimple, once a crucial part of Microsoft’s cloud ecosystem.
Google declined to comment.
Catching up to AWS and Microsoft
Google Cloud is the No. 4 player in the cloud market behind Amazon Web Services, Microsoft and Alibaba. Google had a 4 percent public cloud market share in 2018, compared to Amazon’s 47.8 percent and Microsoft’s 15.5 percent, according to Gartner.
Google earlier this year hired Kurian, a former Oracle executive, to take over for outgoing CEO Diane Greene and revamp the company’s strategy to go after its rivals. According to a source who spoke to Business Insider in August, Kurian told employees Google Cloud has a five-year goal to become “at least the No. 2 cloud.”
Kurian in April said he planned to “significantly” expand Google Cloud’s sales teams and target traditional industries, such as retail, manufacturing, automotive, and finance.
Google Cloud’s strategy
A core Google Cloud strategy is to provide customers with tools to analyze data regardless of whether the data is stored on Google Cloud or rivals like AWS and Microsoft.
Google Cloud in April launched Anthos, a product that allows users to run Google Cloud services not only on the company’s cloud, but rival clouds and private data centers.
Kurian at the time Google Cloud announced the planned Looker deal said that strategy – to provide tools for making sense of the massive amounts of data they hold regardless of where it’s stored – is behind the acquisition.
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Google Cloud’s strategy has perhaps forced changes in the industry.
Microsoft recently announced a similar tool called Azure Arc to allow customers to run its services on its own cloud, private data centers and rivals clouds. One analyst said Microsoft didn’t have a choice because it’s what customers want.