Google Cloud is turning to a traditional enterprise sales model as it takes on front-runners Amazon and Microsoft: separate services by industry and go straight to c-suites.
CEO Thomas Kurian, who's now been at the helm of the cloud business for a year, this week outlined the company's strategy, which included targeting five industries: retail, healthcare, financial services, media and entertainment and manufacturing, according to a company slide deck presented at the Goldman Sachs technology conference in San Francisco this week. While each of them have their own selling points, most of them revolve around using Google's chops in artificial intelligence.
"When we build these industry-specific solutions, they're highly differentiated," Kurian said at the Goldman Sachs conference. "No one has that capability and that allows us to sell not just to IT but to business-owners."
Before Google, Kurian worked as at Oracle for more than 20 years. At Google, Kurian is focused on selling to the C-suite -- CEOs, chief digital officers, chief information officers, and chief information security officers. That's a fairly traditional sales strategy for large enterprise companies, while newer upstarts tend to sell to departmental heads or try to spur bottom-up adoption from users or software developers.
The latest color to its strategy comes as its parent company Alphabet broke out Cloud revenue numbers for the first time in its fourth quarter earnings report. Google's cloud business generated $8.92 billion in revenue in fiscal 2019, compared with $5.84 billion in 2018, and the company claims it's on a $10 billion annual run rate. While that growth is impressive, Amazon Web Services booked more than $35 billion in revenue last year, and analysts including Synergy and Gartner put it in firm first place in terms of market share, with Microsoft as the clear number two.
Alphabet is counting on Google Cloud and other newer businesses to bring in the revenue it loses amid a slowdown in ad sales. However, at its current state, Cloud won't be enough to offset the slowing growth, analysts said after the company's earnings release. Morgan Stanley analyst Brian Nowak said Google will need to deliver "faster growth" in its Cloud unit "in order to get credit" for the business.
But Kurian said that its focus on software differentiates it from other companies.
"We've been very clear with partners: We're a software solutions company, we're not a services company, so it attracts the big customers to work with us because there are very clear lines of separation of what we do and how we partner," Kurian said at the Goldman Sachs conference in San Francisco this week. The remarks seemed directed at Amazon, which competes aggressively in retail and recently moved into groceries, as well as IBM, which has a strong services business and is pursuing a multi-cloud sales strategy.