The primary reason I’ve chosen Thomas Kurian as the Cloud Wars CEO of the Year for 2024 is that throughout the year, Google Cloud has significantly outgrown every one of the wickedly competitive Cloud Wars Top 10 companies in a variety of ways:
- Highest growth percentage: For four straight quarters, Google Cloud has topped the Cloud Wars Top 10 Growth Chart.
- Five straight quarters of accelerating growth: No other Cloud Wars Top 10 company has seen its growth rate rise quarter after quarter over that stretch.
- That acceleration is strengthening: Google Cloud’s Q2 revenue grew 28.8% but in Q3 that jumped an astonishing 6.2 points to 35.0%. Yes, it’s “easier” for Google Cloud to grow at such high rates than it is for Microsoft and AWS because of their larger revenue bases, but the key underlying point is that while those two companies have done well to maintain past growth rates, Google Cloud’s is actually rising — and rising sharply.
- Winning an outsized share of incremental quarter-over-quarter revenue. As I laid out in a Cloud Wars Minute analysis last month headlined “Google Cloud Snatches Huge Chunk of Q3 Revenue,” Google Cloud is punching well above its weight in winning new business from much-larger competitors Microsoft and AWS. In Q3, Microsoft accounted for 50% of the total combined revenue generated by those three companies, but 48.8% of the total new incremental revenue the companies brought in relative to Q2. AWS had 35.3% of the total but grabbed only 27.9% of the new incremental business, while Google Cloud made up just 14.7% of the three-way total but snatched 23.3% of the incremental revenue.
So in this extremely demanding market and facing much larger competitors, how did Google Cloud manage to unequivocally take share from both Microsoft and AWS? In our recent 1:1 interview at Google Cloud headquarters, Kurian laid out a number of factors, all of which begin and end with meeting the current and emerging needs of customers.
“First of all, all of our competitors are fine companies, but we’ve been fortunate, I would say, in two or three dimensions,” Kurian said.
“One, we tend to look ahead by listening to customers and understanding their needs, and create in a disciplined way new product offerings. If you look at over the last five years, we’ve introduced in a steady cadence.
Diversification Across the Entire Cloud
“First, we started with infrastructure. Then we added databases. We used our strength with BigQuery to build out an analytics portfolio. We were one of the earliest to say customers are struggling to understand security, and that we should not only provide them with a secure cloud, but we should also build a security product portfolio.
“Every one of those has driven diversification of our revenue stream,” Kurian said. “And it’s also given us more opportunity to serve more customers because even if a customer says, ‘I’ve chosen somebody else for infrastructure but I’d like you for analytics,’ once you chose us for analytics, as AI models came along, you can pick that up from us. So one, I would say, is diversification.
Connecting With Lines of Business
“Second, when we entered the market, most companies had made a decision in their IT organization to pick one or another cloud provider,” Kurian said. “Our growth is reflective of the fact that we said, ‘Okay, if they’ve chosen one in the IT organization, that’s not representative of all of their needs. So let’s go to the lines of business.’
“And when we did go to the lines of business, it was, you know, we had to do all of the pieces, right? You have to have all the key products and solutions. For example, when we talk about the work we’ve done with marketing and how you do personalized marketing, that’s a combination of data assets, our Gemini and Imagen models, and how easy we put the tooling around it, and we have to provide mechanisms to do conversion measurement. So in putting a solution together, we’ve been very disciplined on who we bring those solutions to, outside of the IT organization that, to be honest with you, was a necessity — and necessity is of course the mother of invention.”
Great People: ‘We’ve Been Super Fortunate‘
“Third one, we’ve been super fortunate. We have some very talented people we’ve been able to bring in, and we’ve made very disciplined, strategic bets in our go-to-market organization,” Kurian said.
Among those bets: “How many industries do we do? How many specialties do we have? When we brought in AI, we said early on that big companies are not going to look at it purely through the developer tool chain — they’re also going to look at it through solutions: what we do with quick service [food outlets], or what we do with automotive?”
The Power of Customer Empathy
Kurian was the first tech-industry executive whom I heard describe the need for “customer empathy” with regard to cloud migrations, tech transformations, and ultimately business transformations. And playing strongly into that unique “customer empathy” approach — one that every other Cloud Wars Top 10 company has adopted wholeheartedly since Kurian first voiced it six years ago — is the notion that the needs of customers are changing incredibly fast because the very fabric of the global economy is evolving and transforming at a blistering pace.
So Kurian, as reflected in his comments above, drove home a corporate mindset across Google Cloud focusing strongly on helping customers create their own futures rather than simply helping them optimize their present or past states.
“I definitely think customers have changed the way they think of cloud computing — that doesn’t mean that some of their original needs are not there, but the predominance of that is no longer there, right?” Kurian said.
“If you look at the first version of cloud computing, a lot of it was about cost optimization: “I don’t want to run expensive servers, I don’t want to run expensive data centers, if I move can you give me burst capacity?’ Most of it was around cost reduction, and that’s certainly an important element.
From Cost-Cutting to Business Acceleration
“But as you look forward, for example, when you look at what people are trying to do with our AI and analytics portfolio, it’s about speeding decision-making, speeding the way they do revenue conversion. If you look at marketing, if you look at the way AI is being used for logistics, it’s about optimizing the cost of that entire logistics chain, not about the cost of the systems to run the logistics system,” Kurian said.
Mitigating Risk Across the Business
“Third, we also see them looking at it as the cloud used to be seen as risky, but now it is seen as a way to offload risk. Take as an example cybersecurity. Years ago, people used to ask me, ‘If I move my workloads to the cloud, will it be less secure?’ I think now people have realized with cyber —particularly if you run on Google; we’ve had a great track record of keeping their environments and systems secure — we’re also giving them tools to measure their security posture so that they know where they stand, and so they can take action quickly.”
Creating New Forms of Competitive Advantage: The Power of Speed
But the cloud’s best days are still ahead of it, Kurian said, particularly due to its intertwined relationship with AI.
“As we look forward, I think you will see people really looking for where technology can give them a competitive advantage,” Kurian said. “Competitive advantage comes down to speed: the ability to create something they were doing one way but now completely differently, or creating new products, or entering new markets.
“We see this happening every day using our AI tools. So that is now increasingly the way that people look at their technology partner. When you’re in a stable state, you look at your technology partner through one lens. When you are in a period of great change, you look at the technology partner in a different lens. And so we’re seeing that happen every day,” Kurian said.
“How fast has this happened? If you look at enterprise software, and you look at where we were in 2019 and where we are today, most companies have taken 20 or 25 years to go through that curve, and we’ve gone through it in just six.
“And that’s not just because we’ve made a few bets and been fortunate to get them right, and not just because we’ve had great people that we’ve been able to attract, and been fortunate that they have delivered great results, but also for that entire ecosystem that chose to make a bet with us when we were nobody — we’ve always been super grateful for that.”
More Reasons for Kurian as CEO of the Year
Commitment to customers. From his very first public comments six years ago when he became CEO of Google Cloud, Kurian has emphasized the need for putting customers at the heart of everything the company does — and while that’s been easy to say, it is terribly difficult to do. But you can see how that mindset has taken hold in the growth numbers Google Cloud has been putting up because growth rates are, more than anything else, an indicator of customer sentiment: which tech partner will give me the best chance to thrive in the challenging years to come?
Bury the ego. Throughout our 30-minute conversation, Kurian’s disarming humility came through on multiple occasions: how “fortunate” the company has been, how what it’s done are in large part “table stakes,” and how Kurian and his company are “truly grateful” for customers who’ve chosen to believe in them. Big egos tend to think they’re owed something by the outside world, or that past success is truly a guarantee of future success. Kurian — typified by his early embrace of “customer empathy” — is the exact opposite of that.
Build great teams and great leaders. Across the six years that Kurian’s been CEO, Google Cloud is now on its fourth head of global sales, with the last three being Rob Enslin, who left to be co-CEO of UiPath and is now president and chief commercial officer at Workday; Adaire Fox-Martin, who left to become CEO of Equinix; and now Matt Renner, who took over from Fox-Martin about nine months ago. Despite that fairly high level of turnover in the top spot for global field operations, Google Cloud has not only not missed a beat but has accelerated dramatically, with Renner and team (as noted above) delivering growth of 28.8% in Q2 and then spiking that to 35% in Q3. Two constants over that time have been Kurian as well as CMO Alison Wagonfeld, who held that key position when Kurian joined at the beginning of 2019.
Help Customers Overcome Uncertainty with the Gift of Speed
When I asked Kurian to describe the priorities of customer CEOs, he immediately went to the challenge of uncertainty: in geopolitics, in the economy, and in the business world at large. And that reply reveals another major reason why he is the Cloud Wars CEO of the Year for 2024.
“When we meet with CEOs, the obvious and the biggest thing they’re worried about are geopolitical uncertainty, technology uncertainty, and then economic uncertainty,” Kurian said.
“And that uncertainty means you need speed and agility, and speed and agility to deliver value in each customer’s context. So a lot of our projects this last year have been around that. You know, when we look at the work we did with data at UPS to help them improve the way that they look at their trucks and their routing and their infrastructure, or if you look at how we improve search so that products can be found much more quickly and easily such as in the work we did at Hanes brand, or helping Macy’s improve customer service so that people can find answers to questions much more quickly and easily,” he said.
“Or the work we did at AT&T or British Telecom, or even helping developers build new products, or if you look at how AI is being incorporated with Samsung to bring AI to the phones, if you look at the work we’re doing at Snap to help them build basically a coach that’s inside the application to help people and that’s applying AI and creating new business models for these organizations.
“So uncertainty is the primary thing we hear. And uncertainty means the great CEOs want action, meaning you control the controllable, and you do that by improving speed in your organization.”
Is Kurian’s approach resonating with customers? According to the figures on the most-recent version of our Cloud Wars Growth Chart, the answer is an unconditional yes.
Congratulations to Google Cloud’s Thomas Kurian, the Cloud Wars CEO of the Year for 2024!
For more on Thomas Kurian’s thoughts on AI, security and reliability, and more, please watch our 30-minute interview.
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