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The $60-billion technology giant Google has escalated the cloud business war by huge price cuts across offerings, starting early this year. Competitors such as Amazon, Microsoft and IBM have followed suit. Shailesh Rao, the company’s global head of cloud business and director, says that consumers now have a choice of using the same cloud infrastructure that powers YouTube and Google Search.
Rao, a Harvard Business School graduate, is responsible for worldwide sales, business development and go-to-market strategy of Google’s Cloud Platform business, the most promising division for the technology giant after the Android business.
He is among the chosen few whom founders Larry Page and Sergey Brin count upon. Here he talks to Anand J about how the Android ecosystem is helping Google grow its cloud business and how big companies are adopting cloud to enable digital transformation. Excerpts:
What is Google’s current focus as far as its cloud business goes?
The cloud business is part of Google for Work business. Companies of all shape and all industries can take advantage of the innovations that Google has pioneered across search, productivity, infrastructure, mobiles and the Android ecosystem. We help companies make journeys into the fully digital world. We are excited about the potential of the Indian market and see tremendous momentum driven by three key trends. One, we see companies becoming fully digital enterprises, including large companies, traditional industries and even smaller businesses. Companies that are more digitally mature outperform their competition consistently, be it revenue growth, profitability or return on investment. The transformation the companies are experiencing has resulted in marquee wins for us. Two, the way mobile phones and mobile technology applications are making people more productive, together with the whole mobile experience and the time spend on the device, are driving companies to cloud. Three, there is an attempt to run entire companies on a public cloud infrastructure that is scalable, reliable and secure. The adoption is triggered primarily by mobile and that consumers can leverage the platform and tools of Google Cloud.
How far is the cloud business dependent on other Google products?
Google Cloud platform is the underlying infrastructure on which other Google products are developed. If you are writing a web app, mobile app, e-commerce app, game or a social app, Google Ads, they are all based on the same platform. Over the last 15 years, we built services that we rely on to run our own business. We have various application programming interfaces (APIs), have a service for big data analytics, etc. All these technologies that made Google what it is, are now available as a service to you.
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Are you focusing completely on the start-up and developer community?
Not at all. There are developers in every company, and I don’t mean start-ups when I say developers. They write software and applications for all sort of companies. The workload that a large company might use is different from a smaller company’s. If you are a large enterprise, you might look into taking transactional data and analyse it in real time, so they can get insights from that or they might be looking for a big data solution. So you need a scalable solution for that.
But Google’s customer list is small-business-heavy…
We have lot of large companies like JSW, whose 13,000 employees moved to Google Apps. Hiranandani, Snapdeal, Adhunik, US Vitamins and Voltas are the other big names. India is ripe for digital transformation. It depends on what is the definition of a large company. Historically, we looked at the number of employees, whether they use a particular application or not. A 20,000-people company probably used a Mainframe, a 200-person company didn’t. Cloud transformation has fundamentally changed those rules of the game. Today you could be a large company and most of your new development is being built on cloud while small companies build entirely on cloud.
Then why did you indulge in price cuts for your cloud offerings?
We have been investing about $3 billion on the core infrastructure every quarter. We believe cloud providers have not passed on the savings to the customers based on the hardware price that has come down. On an average, prices have fallen 15-20% year-on-year but the price drops by cloud providers have been in low single digits and we think that is not fair. We can do it better than anybody else because of the scale we have. We introduced managed virtual machines that allow you the flexibility of managing your own infrastructure, including what to do with it. Also, you have the flexibility of choosing not to manage the infrastructure. The more you use, the more discounts you get without having to pay upfront.
How has the explosive growth of the Android ecosystem helped Google’s Cloud business?
Huge. It is a big factor when developers look at which platform to use. The ecosystem that Google brings to the table—whether it is the Playstore with Android or the Chrome ecosystem and its extensions—gives you the benefits of the innovations Google did. We have made it easy for developers to extend their applications.
Experts say there isn’t a differentiation in the cloud business…
I would not necessarily classify them as the same. Companies are looking at tremendous abilities to scaling in and scaling out and no one can provide the scale we can offer. This should not come as a surprise as we have been building the infrastructure for the last 15 years and it is the same infrastructure that runs all of Google and its services. That is the scale and power of reliability we bring to any company and the quality of network is the same anywhere. We own a superfast network and it includes some of the best innovations in networking technologies. We did software-defined networking in our data centres before anybody else. Cloud is designed for developers. The end-users might be business users or consumers, but people using it on a daily basis are developers.
Any plans for a data centre in India?
We are committed to investing in the business. We continue to evaluate markets as they mature and look at different opportunities. It is an ongoing process. We recently announced our Taiwan data centre. If a market and the customers need it, we will evaluate the same. The power of a strong network must not be underestimated. Being located in one place is simply one element and not the only thing that determines success or failure in the market. As of now, there is no plan for a data centre in India but we will continue to evaluate the market as it evolves.
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