(Bloomberg Gadfly) -- If horror-film villain Freddy Krueger had threatened terror for nine movies but never followed through with evil acts, eventually movie-goers would have stopped being scared of him.
Google is at risk of becoming that neutered Freddy Krueger.
For years, Google's cloud software for businesses has been seen as a scary, looming threat to Amazon Web Services (AWS) and Microsoft. It has Google Apps for Work, a competitor to Microsoft Office, and a relatively newer cloud business vying against AWS and Microsoft to take over back-end computing chores. Executives have said they expect Google's cloud software to make more money than its ad products in 2020.
To put that ambition in context, Google's ad products generated $67 billion in revenue last year. Google on Thursday splashily rolled out a revamped lineup of cloud technologies. It seemed to acknowledge it needs to do more to get corporations to try and buy its software.
But Google and its respected cloud boss Diane Greene can’t for much longer simply be a theoretical danger to Amazon and Microsoft. They need to show progress by disclosing sizable revenue or other proof they're making headway. So far, the number of press clippings about the cloud operations (including from me) far exceeds actual revenue.
It’s now been almost a year since Google hired Greene, a business-software veteran who founded VMware, and consolidated its business software products under her watch. Greene -- who knew the company well as a Google director -- didn’t come cheap. To bring her aboard, Google parent company Alphabet paid $380 million to buy bebop, a mysterious startup Greene had been developing.
Including that purchase, five of Alphabet’s 12 announced acquisitions since November have been aimed at helping Google's cloud business, according to an analysis of Bloomberg data. That’s a large share, considering the cloud business is an unknown but likely immaterial chunk of Alphabet's $80 billion in annual revenue. Bebop and a more recent acquisition of cloud-software firm Apigee also were Google's two biggest deals since the 2014 purchase of Dropcam.
Those are all signs of commitment. Google also has oodles of money at its disposal, and the best computing network in the world. Those assets should give it a big leg up in business software. But is there progress? It’s hard to know.
The company doesn’t disclose finances for Greene’s operation. . It has announced customer wins, although it’s not clear those attention-grabbing customers are paying real money to use Google's software. Apps for Work and the cloud outsourcing products could be quietly huge, but it's not likely. Apps has never made much headway beyond small and medium-sized companies.
Google's AWS-like business is growing quickly but commands something like 5 percent market share, with Amazon taking the vast bulk of the rest, according to Synergy Research. At a recent Goldman Sachs event, News Corp’s head of technology predicted AWS "will be incredibly hard to catch."
AWS's annual revenue is about $10 billion and shows few signs of slowing down.
There is plenty of room for Google to succeed, even if it doesn't kill Microsoft or Amazon. The three companies aren't so much competing as they are chipping away together at the more than 90 percent of information technology budgets spent on old-fashioned software and hardware.
Still, it's no coincidence that very few successful consumer technology companies like Google also do well selling tech to companies. Businesses make for lucrative but demanding customers.
They want account reps to yell at when things go wrong. They sometimes ask for technology changes that seem idiotic and self-defeating. They take forever to make decisions and want to cut their bills. Tech companies wouldn't put up with those whiny jerks, except those whiny jerks spend $2 trillion a year on technology.
If Google wants to grab a bigger piece of that corporate tech-spending prize, the company needs to show it has more than smarts, ambition and some scary Krueger slasher nails. It needs to show results.
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