Look Out AWS And Azure – Google Is Betting Big On The Enterprise Channel

When Diane Green took the helm of Google's cloud division in November 2015, the internet services giant was at a crossroads, and partners were growing frustrated.

They believed they had bet on a public cloud provider with game-changing technological capabilities — leading software development talent, mastery in data center operations, unrivaled network capacity. But for the most part they weren't winning deals against their hyper-scale competitors.

Google just didn't understand the enterprise, a market segment with different dynamics from its legacy consumer business, partners concluded. Marketing was off-message, feature development was slow, outbound sales was an afterthought.

Most of all, its sales leaders, through predilections and programs, weren't positioning partners to compete against those bringing Microsoft Azure and Amazon Web Services to market. Greene was a breath of fresh air — the former VMware CEO from day one articulated to partners a comprehensive, battle-tested vision for transforming Google's cloud business into an enterprise powerhouse.

"It had not played out the way Google hoped it would with some of these solutions," Aric Bandy, president of Agosto, a Minneapolis-based Google partner, told CRN. "Under Diane they shifted to focus on what the market wants."

But while Greene, senior vice president of Google's cloud businesses, has been credited with some notable wins since then — revenue-rich customers like The Home Depot and Spotify, even quietly signing Apple — many Google partners told CRN those deals belie the fact that the comprehensive enterprise posture she laid out has yet to take root.

"The changes Diane Greene is making are coming a little bit slower than we expected," said one Google cloud partner who asked not to be named. "I do think their messaging has gotten more crisp and is targeting the enterprise more strategically. It would be great if they could accelerate their actions to match that messaging now."

Some partners fault resistance stemming from Google's entrenched consumer culture for slowing Greene's transformation. At the same time, they are cautiously optimistic big changes are finally imminent.

Google's Cloud Next conference, held in San Francisco in March, put front and center new enterprise-focused leadership, messaging, products and sweeping channel program changes. "One of the reasons I joined Google," Greene told attendees during her keynote, "[is] we're leveraging almost two decades of innovation and technology really built for the kind of enterprises we have today, or we're starting to have."

It wasn't lost on partners attending the event that Greene had swapped out much of the management beneath her and filled many key positions with people she recruited from VMware and other companies with enterprise pedigrees, especially in alliances, sales and marketing departments.

"VMware was very much a partner-driven sales motion, just like most enterprise software companies are, and Greene has set the same expectation for Google," said Tony Safoian, CEO of SADA Systems, a Los Angeles-based Google partner.

Google's new channel chief, Bertrand Yansouni, a former colleague of Greene's at VMware who previously ran channel for big data specialist Cloudera, revealed to partners at the start of the conference a major program revamp to reflect the realities of enterprise sales and reduce channel conflict.

"Google is relying more heavily on their exploding partner ecosystem to accelerate their position as a serious player in the enterprise. It makes sense they'd revamp their partner programs to align," said Vanessa Simmons, director of business development at Pythian, a Google partner based in Ottawa. Among the changes, Google eliminated an incentive in its compensation structure for Google salespeople to take deals direct—an element long derided by channel partners.

"It's a strong signal for our partners and for our field in terms of how serious we are about being a channel-friendly environment," Yansouni told CRN.

Google's cloud division has shifted its focus down the stack, looking to make Google Cloud Platform its flagship enterprise product and capitalize on an exploding cloud infrastructure market. Partners hope Greene's shakeups will empower them to start closing the considerable market-share gap with Microsoft Azure, and pressuring market leader AWS.

While those competitors enjoy a commanding lead, the cloud wars are far from settled. The public cloud infrastructure market exceeded $7 billion in the fourth quarter of 2016, including public Infrastructure-as-a-Service and public Platform-as-a-Service, according to Synergy Research, and is still in an early adoption stage, growing at a whopping 50 percent pace.

"Does anyone not agree it's the biggest thing going on in IT right now?" Greene, who wasn't made available to CRN for this story, said of cloud computing in her Next keynote.

Google has always had customers gravitate to its consumer products; when the company launched its public cloud, it expected enterprise adoption would follow that same course. Build a great cloud tooled for click-through transactions, offer cutting-edge technology on that platform, especially around analytics, and customers will come—or so the thinking went, according to solution providers.

"In the early days, the belief was that Google Cloud's products are so great they didn't need salespeople. People will just buy it. But Fortune 500 customers buy differently—they buy solutions, not products," Agosto's Bandy said. Greene saw the shortcomings of that strategy, Bandy said, acutely aware that an empowered partner ecosystem, fully backed by the internal sales organization, was critical to winning the enterprise.

But she faced an uphill battle, another Google Cloud Platform reseller who asked to remain anonymous told CRN.

"It has always been tough to work with Google as a partner. There is a ’we are Google and are smarter' attitude," he said.

Google is famous for playing by its own rules and didn't see the enterprise business as an exception, said one technology partner who's worked closely with the company over the years.

The attitude in Mountain View favored the do-it-yourselfers, he said, the "hipster developers" who won style points for being innovative, and born-in-the-cloud internet services startups. Sales, especially enterprise sales, had never been part of the DNA.

Cultural resistance to enterprise norms could manifest itself in the smallest details. At a Goldman Sachs cloud computing conference in Silicon Valley in 2013, a Google Apps executive recounted how there was blowback when he tried to replace the term "user" with "customer" in promotional material, the partner, an attendee of that event, told CRN.

"They have the best infrastructure," said Bandy. "They just haven't been good at telling their story, a story that the enterprise market wants to hear."

Google's sales leaders and its field reps often failed to appreciate the benefits of passing deals to the channel, Safoian told CRN. The knee-jerk remains a direct sales motion, he said. "The field was both unaccustomed to engaging with and through partners, and mistrusting of the value that partners can add in this process," Safoian told CRN.

When Greene imposed fixes at the top, they were slow to seep through layers of entrenched "Googliness" into the sales field, or marketing campaigns, or the overall inclination toward channel partners, according to many familiar with the company.

Greene's mandates resulted in culture shock throughout the division, said Jamie Shepard, senior vice president at Dallas-based Lumenate, a Google and VMware partner, who has worked with Greene for over a decade. Greene had a clear vision for the business — highlight Google's experience in operating highly stable data centers,

unique networking fiber assets, and ownership of Apps, a popular business application portfolio now called G Suite, to woo big companies considering ditching their data centers.

But the agnostic platform she described didn't resonate with an internal bias toward a niche cloud geared for next-gen workloads taking advantage of capabilities Google built for its internal products.

"Google didn't want to be the company that was supporting old enterprise applications. That's just not Googly," he said. Greene was given carte blanche to build out her vision, Shepard said. But while she was uniquely capable of bridging the gap between that "Google world" and traditional enterprises, the wrong people were in place to support her.

Partners have noticed the significant management changes executed over the last year, said Rajesh Abhyankar, CEO of MediaAgility, a Google partner based in Princeton, N.J.

"They are trying to realign to be an enterprise company. More traditional enterprise-style selling is coming," Abhyankar told CRN. "What I see Diane doing, if you join all the dots, it's taking this direction away from the consumer business."

Some partners left Next confident their practices were at a tipping point. Not only was Google's messaging spot on, they told CRN, but it looked like those ideas had finally been absorbed throughout the organization.

"There's been good movement, and it's now filtering down to the field and go-to-market teams," said Agosto's Bandy.

One highlight was Alphabet Executive Chairman Eric Schmidt directly naming in his Next keynote several channel partners: Pythian, Agosto, Groovenauts, SADA as well

as global integrators Accenture, which purchased Google juggernaut Cloud Sherpas, and PwC.

Greene closed her opening keynote by thanking "all our partners, our precious partners" and said she looked forward to running into many of them in the exhibition hall.

This conference was different from any of their others. This was your typical enterprise conference, with a Google touch," said Daniel Saks, co-CEO of San Francisco-based AppDirect, developer of an online marketplace for cloud services. Saks' company hosted a happy hour mixer with Google at the conference, drawing traditional VARs and telco resellers who were buoyed by the reorganization they saw around them, he said.

"Since Diane came on board, there's been a complete page turn where they moved from an online tech company to a real enterprise-driven company with real exceptional business development people," Saks told CRN.

Greene told Next attendees that "the quality of our customer conversations are really changing" before inviting on the stage during her keynote representatives from customers Home Depot, eBay, Verizon, HSBC and Disney.

Google's customer conversations used to focus on specific technologies like BigQuery, data analytics and machine learning. But only a couple of weeks earlier, Greene said, she met with five customers, and three of them wanted to discuss full lift-and-shift migrations. That's a good sign, said partners, because those are the engagements that will truly validate her strategy.

Google, however, still hasn't proven it's found its footing on that front. Partners estimate that 95 percent of Google Cloud Platform business is still direct, a number Google won't independently confirm. Most of that spend is coming from a group of customers that can be counted on two hands—including Apple, Snapchat, Spotify, Coca-Cola, Home Depot, even Niantic Labs thanks to Pokemon Go, that operate massive online services.

Those companies love Google's technical capabilities, especially when it comes to networking and analytics. Many use App Engine, Google's innovative Platform-as-a-Service, for building cloud-native applications.

Greene had a direct hand in signing some of them. But while they are often cited as harbingers of enterprise transformation, simply looking at the logos can be misleading, according to one partner.

"Diane's enterprise story is interesting, but she's not talking about enterprise workloads but enterprise customers," that partner said. "Coca-Cola, Apple, Snapchat, maybe big companies are using Google, but they're not using it for things enterprise companies use servers for. They're not moving big business applications to

Google."

Taking market share from Azure and AWS will require appealing to traditional enterprises looking to execute run-of-the-mill server migrations to the cloud. Those customers operate under a different buying cycle, respond to different sales methodologies, require different feature sets, and prefer purchasing IT from channel partners that can add ongoing support

and services.

"There's just that knowledge gap at Google. They should be doubling down on marketing and collateral and I don't think they are," the partner said. "Because the message is unclear, people are going for lift-and-shift and getting discouraged and then going back to Amazon."

Most enterprises aren't looking to adopt the latest-and-greatest cloud tech. They have "IT-specific workloads" they want to move from on-premises to the cloud, said Michael Fraser, CEO of Mountlake Terrace, Wash.-based Infinite Ops, a platform for deploying cloud services, including Google Cloud Platform. In the past, "Google has fallen short because they are a software engineering company that does things very well, but they haven't got the messaging to sync with the IT service provider world," he said. But the future is brighter, he added.

"I think if Diane Greene hadn't come on board, they wouldn't have any push in this direction whatsoever," he said.