Google is challenging Amazon in the cloud by partnering with open-source companies instead of competing with them

Key Points
  • Google Cloud CEO Thomas Kurian said he wants to work with open-source companies and help them get to market.
  • Google will provide a centralized place for billing and management for open-source tools like Elasticsearch and MongoDB.
  • Amazon has been taking steps to compete with open-source software providers.
Thomas Kurian, the incoming head of Google Cloud and formerly president of product development at Oracle, speaks at the Oracle OpenWorld conference in San Francisco on Sept. 24, 2013.
David Paul Morris | Bloomberg | Getty Images

Google's cloud division is cozying up to open-source software companies as it draws a distinction with Amazon, which has started competing with some of those vendors.

"Recently the open-source community has found that cloud providers are not partnering with them, but attempting to take away their ability to monetize open source," Google Cloud CEO Thomas Kurian said at a developer conference on Tuesday. "We as Google do not believe that that is good for customers, for the developer community or for software innovation."

Kurian, who took the helm of Google's cloud division in November, is starting a new initiative to partner with companies like Elastic and MongoDB, which have built businesses by commercializing open-source products.

Last month Elastic stock fell after Amazon Web Services introduced a new community for people to contribute to a separate version of the Elasticsearch open-source software, while MongoDB shares plunged in January, after AWS launched a new and potentially competitive database service.

Shares of Elastic and MongoDB both rallied on Tuesday. By partnering with these companies, Google can provide customers commercial support, consolidated billing and a single management tool for all participating open-source services.

Source: CNBC

AWS declined to comment.

Another company participating in the initiative is InfluxData, a start-up that commercializes a database called InfluxDB. Paul Dix, a co-founder of InfluxData and its chief technology officer, said in an interview last month that cloud providers are like vampires in the way they have taken open-source code and started collecting revenue but haven't always contributed back to the public projects.

In an email on Tuesday following the announcement, Dix applauded Google's move.

"They need something to differentiate themselves from Amazon," he wrote. Dix noted that Google has had success with homegrown open-source projects like Kubernetes for managing digital containers. "Google Cloud could end up being the best place to run any number of open-source platforms if they get all of those vendors working with them, which seems to be exactly what their plan is," Dix wrote.

Early last year Google said its cloud business, including the hosting infrastructure and the G Suite portfolio of apps, was generating more than $1 billion in revenue per quarter, though the company hasn't provided an update since. AWS said in January that first-quarter revenue jumped 45 percent to $7.43 billion from $5.11 billion a year earlier.

Microsoft is second in the market and is also gaining traction by working closely with developers.

"Over the last five years or so Microsoft has carved out a reputation as the best partner for commercial open source,
said James Governor, a co-founder of industry research firm RedMonk, in a message to CNBC. Google "is aiming squarely for that same mantle, which should be good for commercial open source, and good for Google," he wrote.

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