Diane Greene to Lead Google Into Cloud Business Fray

Google CEO Sundar Pichai on Thursday announced the appointment of Diane Greene, cofounder of VMWare and a current Google board member, to lead its cloud business operations.

Google will acquire Bebop, another firm founded by Greene. Bebop is a new development platform that makes it easy to build and maintain enterprise applications.

“We think this will help many businesses find great applications, and reap the benefits of cloud computing,” noted Pichai.

Growing Scale

Bebop’s team will help Google provide integrated cloud products at every level — from end-user platforms like Chromebook and Android, to infrastructure and services in Google Cloud Platform, to developer frameworks for mobile and enterprise users, and end-user applications like Gmail and Google Docs, said Pichai.

Google already has a strong foundation to take its cloud platform to the enterprise level, he noted, as more than 60 percent of the Fortune 500 are active users of a paid Google for Work product.

All of Google’s businesses rely on its cloud infrastructure for their operations, Pichai said, noting that Google has significantly larger data center capacity than any of its competitors.

Shares of Alphabet, Google’s parent company, rose on the news.

“This is a good step for Google as it tries to make itself more attractive to enterprise customers,” said Rebecca Wettemann, vice president at Nucleus Research.

“Google will have to further separate its cloud business from ads, analytics and other consumer-focused areas to show it’s taking the enterprise seriously, and should be taken seriously at the C-level,” she told the E-Commerce Times.

Google has a formidable team of competitors, including Amazon, Microsoft, Salesforce and other enterprise-level firms. It’s not clear whether Google can catch up to the rest of the industry, which has been competing fiercely for major business at the enterprise level.

“It’s hard to say just now whether Google’s move is too late or not,” mused Charles King, principal analyst at Pund-IT.

“In the short term, it seems like a reasonable strategy to contend with Microsoft’s successful Office 365 effort. Overall, I think Google is better off by coalescing its energies behind a comprehensive suite of solutions and services for enterprise customers,” he told the E-Commerce Times.

Google previously has taken baby steps to expand into the cloud services business dominated by Amazon and others. The company earlier this year launched a public beta of Nearline Storage, which offers low-cost storage options.

“This move will determine how Google competes with AWS and Microsoft in the IaaS and PaaS markets,” THINKstrategies Managing Director Jeff Kaplan told the E-Commerce Times.

Questions About the Past

Google’s selection of Diane Greene to head its new cloud business team may not be a slam-dunk.

Greene cofounded VMWare in 1998 with Mendel Rosenblum, Scott Devine, Ellen Wang and Edouard Bugnion, and served as its first president and chief executive officer. EMC acquired the firm in 2004. Four years later the board fired Greene, replacing her with Paul Maritz, a retired Microsoft executive.

As CEO of VMWare, Greene encountered problems taking her company to the next level, recalled Rob Enderle, principal analyst at the Enderle Group.

“She helped bring VMWare to market, but once it got to scale seemed to struggle with the firm,” he told the E-Commerce Times. “There is no denying she is good at bringing a company to market, but competing in the enterprise space — that skill set is just not her skill set, and therefore I think she was a bad choice for this job.”

Greene likely will serve about 12 to 18 months at the helm of the cloud business and then be replaced, Enderle predicted.

That prediction may not be one to take to the bank, however.

“Diane Greene is an intriguing choice to lead the new group,” said Pund-IT’s King.

“At one level, during Greene’s tenure at VMware, the company was almost entirely focused on enterprise-class solutions and customers. As a result,Green likely knows and/or has worked with numerous businesses that Google would like to engage,” he pointed out.

“At the same time, she has been out of VMware for well over half a decade,” said King, “so whether Greene has the right stuff to lead the charge against such formidable adversaries remains to be seen.”

Whether Greene can lead the cloud business efforts effectively isn’t Google’s only problem, Enderle said.

Overall, the experience of the personnel engaged in the company’s enterprise business has been limited to startups, he pointed out, and that makes them ill-equipped to manage an enterprise that requires scale to be profitable.

A Google spokesperson was not immediately available to comment for this story.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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