Google has set out the next phase of its plans to develop its Cloud business in Europe, with the region emerging as one of its key growth engines so far this year.
Google Cloud’s revenue rose 47% to $5.8bn in the six months to June 30, 2020. While the company does not provide a breakout of its European numbers, it announced significant wins with BBVA, Carrefour, Deutsche Bank, Lloyds Banking Group and Renault during the first half of the year.
Thomas Kurian, the global head of Google’s Cloud business, provided an update on the EMEA business as part of the group’s virtual customer and analyst event, and set out plans to build on the company’s current momentum in the region.
One element will be the expansion of its physical presence. The company plans to add 14 more delivery locations in Europe in the next two years, with new sites coming online in Warsaw, Milan, Madrid, Turin and Paris. Another will be the further development of its partner ecosystem. Germany’s T-Systems was recently named as a new managed services partner, while Kurian claims that 90% of the Google Cloud engagements now have an attached services partner or reseller role.
One of Google’s most interesting moves has been the rollout of more industry-specific propositions. Kurian said that many clients and prospects do not have the experienced data science or machine learning teams needed to fully exploit Google’s cloud-based Big Data and ML capabilities, so the company has built several industry wrappers to join the dots between its tech and a number of domain-specific business challenges.
One example is fraud management in the financial services sector, where Kurian claims that traditional anti-money laundering solutions still generate “north of 90% of false positives” as the rules on which they are based do not evolve. Google is working with clients including HSBC to improve the accuracy and consistency with which they can identify anomalies and suspected criminal activity in user behaviour. Another example is in the retail space, where it is working with fashion specialist Uniqlo to tackle the huge challenge of demand forecasting and inventory management.
Kurian pointed out that these industry-specific propositions also help Google to engage with stakeholders that sit outside the traditional enterprise IT function. With the retail example, he states that helping a client take ten percentage points off their inventory costs could equate to ten times their IT budget. The stakes are higher and it helps Google to differentiate beyond being seen as just another cloud infrastructure provider.
The issue of data sovereignty has been thrust back into the spotlight in 2020, with the launch of the Franco-German “Gaia-X” initiative, which will be the basis for the European Commission’s vision of a European Cloud. Kurian set out a number of steps that Google has put in place to give European businesses greater confidence which can be found in detail here. One interesting step is that Google ensures that the data that customers use to train the AI models running in the Google Cloud can only be used by them and won’t be used by Google or any other party.
Another important step has been the reinforcement of the company’s European leadership team. Daniel Holz, the former head of SAP Germany, has taken over as head of DACH and Northern Europe, while Salesforce and Oracle veteran Samuel Bonamigo now runs Southern Europe. Former Microsoft France operations head Laurence Lafont has joined as VP of industries in France and another ex-Salesforce exec, Pip White, now runs the UK and Ireland.
Google has certainly been on a strong run in Europe, evident in the new logo wins and the increasing depth of its customer relationships. The company’s Big Data analytics and AI propositions were its first and still its chief weapons in the battle with the other hyperscalers, and that continues to be a major factor in deals with the likes of Carrefour, where the two companies are collaborating on the development of a voice-based grocery shopping service. However the company is clearly not resting on its laurels, as it pushes ahead with making Anthos, a leading platform for enterprise Kubernetes, more than capable against the best of the competition (OpenShift, Tanzu etc).
Google has also shown a strong willingness to work alongside its hyperscale competitors, in order to get a seat at the table. While it may start small, it is demonstrating growing success in up-selling beyond basic cloud infrastructure. For example, Kurian said that it has seen significant growth in the number of clients migrating SAP workloads onto Google Cloud – with IT services supplier Wipro, a high-profile example.
There is a lot of headroom for Google to expand in Europe, and the investment in new local infrastructure, leadership and sales reinforcements are important steps in the right direction. The company now needs to work closely with its partner ecosystem and the developer community and to re-tune its messaging, so that clients and prospects can connect with its journey beyond its infrastructure-as-a-service roots.