Experts say that new CEO Thomas Kurian's Oracle-like playbook could cause a 'culture clash' at Google Cloud — and that could be a good thing (GOOGL, GOOG)

Google Cloud CEO Thomas Kurian at Google Cloud Next 2019

Analysts say that Google Cloud CEO Thomas Kurian's plan to emphasize sales and partnerships could lead to a "culture clash" with the search giant's more engineering-focused culture.
However, Google Cloud might come out of it stronger than ever:Although Google Cloud may have advanced technology, it needs a stronger enterprise sales program to catch up to Amazon Web Services and Microsoft Azure, say experts.
Diane Greene, Kurian's predecessor, helped set the tone for Google Cloud to become more enterprise-focused, but analysts say Kurian needs to follow-up on these changes to gain a larger share of the cloud market.
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New Google Cloud CEO Thomas Kurian was hired for his enterprise sales chops — something that the search giant's growing cloud division needs, say experts.

But for a company like Google Cloud that has long been engineering focused, a "culture clash" could be brewing, says Forrester vice president and principal analyst Dave Bartoletti, even as Kurian pursues a playbook that borrows from Oracle, his previous employer.

"I think Thomas Kurian is a good choice, and we'll see if there's a culture clash," Bartoletti told Business Insider. "He definitely brings a very strong experience selling to enterprise. It's a much different sales motion than Google is used to ... Google is making real headway into the enterprise market with its cloud services."

Bartoletti says Google is learning that there's no "one-size-fits-all" for cloud. A technological edge is important, but to really gain traction with the largest customers, it needs a sales team that knows exactly how to solve its customers' problems.

"In the enterprise market, it's not enough to build a better mousetrap," Bartoletti said. "I think Google has learned that. It's very different from the consumer market where you build something shiny and sexy or spend loads of money marketing it. Product management and especially technical account management matter so much more to the enterprise."

Kurian's partnership strategy, which so far involves tie-ups with enterprise mainstays like SAP and VMware, also points to a "very practical Google," says Maribel Lopez, founder and principal analyst of Lopez Research. She says the transition to an enterprise culture may make some employees unhappy, but it's a transition "that has to happen."

"The thing about engineering culture, and the thing about Google, is, I think, they were very much all about innovation," Lopez told Business Insider. "When you get to the scale of this size company and people are used to doing whatever project they want, people are going to have to work on boring projects...Kurian's job isn't to make friends, his job is to make sure they build the best enterprise cloud services."

"If you don't do this right, your innovation almost doesn't matter"

Not all hope is lost for Google. Bartoletti points to Amazon Web Services as an example. Like Google, Amazon is a developer-focused company known for catering to consumers. But as the first major player in what we now know as cloud computing, Amazon eventually learned how to sell to those large customers.

"That's something AWS learned for the last few years," Bartoletti said. "They were a brand new vendor for the enterprise as well. Cloud was seen as very disruptive."

One important shift, Bartoletti says, is that Kurian recognizes that Google Cloud only has a fraction of the salespeople its competitors do. Kurian told the Wall Street Journal that he estimated that Google Cloud's sales team was one-tenth to one-fifteenth the size of those at AWS and Microsoft Azure. He plans to get that up to about half the size in the not-so-distant future.

"Just over the past two years, Google has realized there's something different about selling to large enterprises," Bartoletti said. "It's a lot more complex. There's a lot of history, and there's a lot of investment in both people and technology that enterprises are not willing to throw away."

Lopez said that when she met with Kurian, he spoke about streamlining the sales and contracting process, which is important, as customers can spend six to eight weeks negotiating a contract with a cloud vendor, she says.

For example, she says, Kurian told her that Google will give customers one sales contact for all of their cloud needs, rather than make them talk to different salespeople for different products. This is the kind of basic thing that Google has so far lacked, but that it needs to embrace to build momentum in the enterprise.

"When tech companies run so hard defining the next wave of innovation, sometimes you leave out the basics," Lopez said. "[Enterprises] want to buy something simply. They want to have the right partner and support structure...These are aren't sexy things, but if you don't do this right, your innovation almost doesn't matter."

Kurian also told her that Google Cloud will streamline its partner program, whereby it works with outside specialists who do the dirty work of actually helping customers move to and start using their new cloud infrastructure.

Google confirmed to Business Insider that changes to its partner program are underway, including new certification and specialization programs, and ways to identify top partners and bring them closer into the fold.

The changing nature of cloud

The other big shift identified by analysts is Google's multi-cloud strategy, as exemplified by the launch last week of the Anthos cloud platform — which will enable users to manage not only their Google Cloud infrastructure, but also their own data centers, and the rival Microsoft Azure and Amazon Web Services clouds.

Bloomberg previously reported that Kurian faced internal resistance from co-founder at CTO Larry Ellison when he tried to run a similar strategy at Oracle.

"That shows how the nature of cloud is changing," Bartoletti said. "Cloud used to be a place to get cheaper servers and storage. It's not that anymore. Cloud is now shorthand for all the services I'm going to use to build the next generation of incredible applications...In order for Google to succeed, its core innovations have to be available on as many clouds as possible."

Now, at Google Cloud, this strategy could be crucial, says Gartner senior director and analyst Sanjeev Mohan.

"When you go to AWS and Azure, they try to block off other stuff," Mohan told Business Insider. "Google openly admits, because they are the last big player to come in, there are other cloud vendors and they have to live and happily coexist. That, to me, is very refreshing coming from them."

Daniel Ives, managing director at Wedbush Securities, also predicts that Google Cloud will "aggressively acquire" over the next six to nine months.

"Just given the experience in Oracle, he's an M&A specialist and I think he understands technology and next gen cloud as well as anyone else there," Ives told Business Insider. "He's the right guy for the job but now it comes down to him strategically doing the right things. They need more feet on the street and more market among CIOs."

'An Everest climb'

It's still too early to tell how Kurian will do leading Google Cloud, but the organization will need to make "incremental change over time," Bartoletti says.

Diane Greene

Analysts say Google Cloud has already made headway into this direction, starting under the reign of previous Google Cloud CEO Diane Greene. Analysts say that within the last year, Google Cloud has become more enterprise- and solution-oriented.

"I think this is the first time Google was interested in reaching out to enterprises. They didn't have the mentality of speaking to enterprises," JB Su, vice president of Advanced Technologies and principal analyst at Atherton Research, told Business Insider. "I think Thomas is saying, 'I'm not going to change. You hired me to do enterprise.'"

Even though Google Cloud's technology is in a class of itself, it still has work to do when it comes to strategy, analysts say. If it wants to beat the commanding lead of Amazon Web Services and Microsoft Azure, Google will have to put the work in.

"Right now, this is an Everest climb for Google to start to get to a [cloud] share somewhere in the high single digits and double digits," Ives said.

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