For years, Microsoft has been in a strong position among large enterprises as the only truly viable productivity suite option. Now, as enterprises continue to cross the hurdles of moving to the cloud, Gu Geyun's G Suite has become, compared with ever before,
Although many Microsoft corporate customers have chosen at least one O365 plan, or even a full package of Microsoft 365 cloud packages, there are still some customers who have not, or only some have chosen O365. Whatever the solution, Microsoft is actively striving for more O365 solutions to be adopted or added by enterprise customers. Google Cloud is also actively engaging with these companies in order to get involved in this area, whether it is the adoption of G Suite or Google Cloud Platform (GCP).
Google Cloud has made significant investments and organizational changes in order to put itself in a favorable position, but Microsoft is also continuing to invest in trying to convince users to shut Google Cloud out. In addition to the obvious competition between Microsoft, Amazon AWS and Google Cloud (GCP), the competition pattern is warming up. More and more companies are beginning to show real interest in adopting G Suite.
As early as the fourth quarter of 2017 earnings conference call, Alphabet announced that Google Cloud's quarterly revenue reached $1 billion, which is an important milestone for their cloud business. This turning point shows that, to a certain extent at least, more companies are not only starting to take Google Cloud more seriously, but they are also starting to actually adopt GCP and G Suite and conduct larger strategic cloud transactions. Of course, they didn't specify where the revenue came from, so we don't know the details.
Google Cloud Team Upgrade
Over the past few months, in order to attract more corporate users, Google Cloud has added some star power to its team, which includes a series of industry veterans and All-Star technologists with many relationships. After hiring Thomas Kurian, a former Oracle executive, as CEO at the end of 2018, Robert Enslin, a former SAP executive, joined in April 2019 and served as President of Global Customer Operations. Then, in July, Google Cloud appointed Kirsten Kliphouse as its first North American sales director. Kliphouse used to be Red Hat's senior vice president and general manager. More recently, he served as Microsoft's vice president of corporate sales and partners for more than 25 years. This is in line with Google Cloud's investment plan, which aims to push Google Cloud to the best position in the industry in order to attract more corporate customers.
In addition to leading business sales in North America, Kliphouse will also be responsible for teaching customers how to use G Suite and other Google products and services in their actual work. Considering that while cloud providers are boosting revenue growth (ACV), they are also paying increasing attention to promoting sales and actual use, this arrangement makes sense. In addition, as more and more market competitors become more viable, this will be a real threat, as they will take away the valuable market share Google has earned so hard and become the cornerstone of future product and revenue expansion of competitors.
Cloud vendors realize that it was actual use that led to
Like Microsoft, Google Cloud is using partnerships to make business progress, such as partnerships with corporate leaders SAP and Salesforce. SAP and Salesforce customers who have not yet adopted Microsoft O365, or even those who have adopted Microsoft O365, should expect these existing suppliers and their sales executives to take full advantage of the relationships they have established, at least considering the pressures of switching from Microsoft O365 to Google G Suite. For those Microsoft users who have already taken this step, with Microsoft's renewal date approaching, the real opportunity has come. Generally speaking, this often happens one year before the renewal date. Google Cloud also relies on these relationships to promote GCP considerations and potential use, even if this situation may lead to hybrid cloud scenarios.
Google points out that security, data analysis and machine learning are its main competitive advantages, and they may focus on these areas as a reason for user switching. As more and more companies choose to accept G Suite, we encourage them to pick on Google's thorns. Google also needs to give evidence, references, and more detailed reasons why they are users'first choice. If properly handled, these contents can also be effectively utilized in upcoming updates discussions with Microsoft.
Adopt more expensive competitive solutions
Microsoft recently announced the Azure dedicated host, in short, another way to move users'local servers to Microsoft's cloud computing Azure. The difference is that users can now authorize the cloud in such a way that only the data and applications of the user's enterprise organization can access the dedicated server. For a variety of reasons, from compliance to security, this new product is very important because it opens the door to many potential new businesses.
Behind the scenes, however, Microsoft has made less subtle changes to their licenses, making it more costly for corporate organizations to transfer their internal Microsoft solutions to any cloud that does not belong to Microsoft. In other words, Microsoft sends a clear message that it wants you to run the workload on Azure. This behavior is not new to Microsoft.
Cost reduction sounds good, but there's a big asterisk next to the potential of cost reduction: you have to use Microsoft's cloud. If you choose a competitor's cloud, such as Amazon AWS or Google's cloud platform, Microsoft will raise its fees. In fact, it's just a punishment for Microsoft's competitors.
In response, Gu Geyun's Robert Enslin wrote on Twitter:
Unfortunately, for Microsoft's long-term corporate customers, with the continuous development and warming of the competitive environment, Microsoft has adopted a strong strategy to ensure that their corporate customers will continue to use Microsoft's services and solutions. From introducing procedural licensing changes (which may prompt customers to adopt Microsoft or abandon it), to increasing utilization to create more stickiness in an enterprise organization, Microsoft is doing its best to ensure their enterprise customer business and the resulting revenue. More importantly, Microsoft has retained all of its current businesses, as well as their potential future businesses. Enterprise customers should do their best to assess whether this is the right move for the present and the future.
At first, the main reason most enterprise customers chose to enter the Microsoft cloud was to ensure that those sitting in the conference room and the knowledge workers who worked for them had the most successful and productive cloud solutions. However, once these cloud solutions are in place, they usually realize that a complete and successful digital conversion requires all employees to have the necessary digital tools. This refers specifically to staff who do not have desks, or as Microsoft calls them.
Microsoft wisely launched the Office 365 F1 and Microsoft 365 F1 projects, which provide a digital tool or cloud product, whose functions reflect the typical needs of desktop-free workers. This means fostering each user's culture, collaboration, and technology at a lower cost, and being more closely linked to expectations in terms of price, or at least not preventing conversations around extended cloud adoption. It should be noted that O365 F1 only renamed the previous O365 K1 products.
That is to say, Microsoft pays particular attention to the Enterprise Desktop worker community and creates customized products to adopt its cloud in the entire organization, not just in some organizations. Full adoption and use will make future exit more difficult, which is also known as vendor lock-in. At the same time, the move also provides Microsoft with a larger user base, which has constantly changing needs, which will provide Microsoft with more additional sales opportunities throughout the cooperation period.
Microsoft also knows that in the future, Google Cloud will also gain a real opportunity for itself to gain the choice of enterprise users and an initial entry point through desktop-free labor in the enterprise. Although Google Cloud hasn't come up with productivity solutions or G Suite plans specifically for desktop workers like Microsoft, it's certainly only a matter of time before they do so. Until Google increases its sales and marketing efforts to explain to corporate users why their existing G Suite products are the best solution for corporate desktop workers. If Microsoft can let companies adopt O365 F1 or Microsoft 365F1, it will create a bigger barrier to the entry of Google Cloud and its G Suite products.
Google Cloud has been actively using G Suite as a viable alternative for retailers to consider as a viable option for deskless workers in workshops. Google Cloud is positioning the fact that many front-line workers probably already have experience using G Suite, so it's always attractive to use it efficiently and quickly. Google Cloud also knows that Microsoft may have been adopted by knowledge workers O365, but they still have the opportunity to map to their specific needs and requirements through front-line employees.
If a company decides to provide tools for these front-line workers for the first time, why not consider Google G Suite? This is what many companies are hearing now. With two potential access points (GCP and G Suite), retailers should look forward to contacting Google Cloud's corporate sales team if they have not yet contacted them. Google knows that GCP is another entry point for retailers. After all, which retailer would want to bring Amazon considerable revenue?