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The Google Cloud Surge: 5 Slides from Thomas Kurian Tell the Story

Google Cloud CEO Thomas Kurian was a featured speaker at last week’s Goldman Sachs technology investors conference, and I’d like to share 5 slides from his presentation how it’s become the world’s fastest-growing major cloud company.

(On my weekly Cloud Wars Top 10 rankings, Google Cloud is #3 .)

Kurian opened his 40-minute session with a slide presentation showcasing Google Cloud’s remarkable progress during his two years as CEO and then answered questions for about 20 minutes.

Before I get to the 5 slides that I feel truly underpinned his overview of the company’s recent past as well as its unfolding future, here’s one comment from the opening of the Q&A session that captures the high-level vision that Kurian has rapidly turned into reality.

Describing how Google Cloud often begins customer relationships with somewhat traditional projects aimed at efficiency, Kurian said that much larger opportunities are then revealed. 

“Once you get through that first phase of opening that digital front door, other options are possible,” Kurian told Goldman Sachs managing director Heath Terry.

“For example, in Financial Services, it opens the door from basic things like account management to higher-value advisory services… And in e-commerce, the way you do demand-forecasting, logistics and supply chain—that last-mile delivery—is vastly different than when you had people visiting stores. 

“We’re seeing not just that process of opening the front door to reach consumers, but now the internals of the organization needing to change in order to capture what digitalization really means.”

Yes, there’s a lot of money to be made in helping address those out-of-date and often-brittle “internals of the organization.”

That’s why the market opportunity for Google Cloud and other members of the Cloud Wars Top 10 is so massive. It’s also why parent company Alphabet has every reason to be very pleased at how Kurian and his team are scaling revenue while simultaneously slowing the growth rate for essential expenses, which I recently analyzed in 5 Reasons Why Google Cloud’s $5.6-Billion Loss Is Excellent News .

One of Kurian’s opening slides reflected that mind-boggling cloud opportunity, with nearly half a trillion dollars in new spending up for grabs over the next few years:

And on top of Google Cloud’s 47% revenue growth in 2020, the company is also generating an enormous backlog of future business, as reflected in this slide from Kurian:

Of course, these backlogs cannot be precisely equated to future revenue—but they do give a pretty impressive indication of future momentum. And even in a go-go market like the enterprise cloud, it is exceedingly rare to see a company of this size nearly triple its backlog within a single year.

That stunning momentum is a function of great technology, which Google has long had, but more so due to the world-class talent Kurian and team have been pulling into Google as fast as possible.

In his conversation with Terry, Kurian said, “We’ve built a great sales team, and that’s a credit to [president of sales] Rob Enslin who runs that team. And we’ve brought in some fantastic talent from across the industry, while at the same time we’ve also had great relationships with partners. 

“We focus on what we do well—for example, we don’t have large professional-services teams—creating opportunities for partners as we grow, and we’re seeing the partner ecosystem recognize that.”

In his slide presentation, Kurian offered these 8 examples of the impact that Google Cloud’s dramatically expanded go-to-market and development teams have had since his arrival in January 2019.

Customers are clearly liking what they’re hearing from Google Cloud, and this slide from Kurian reveals that many customers are expressing preference for GC over Amazon’s AWS (#2 on the Cloud Wars Top 10 ) and even #1 Microsoft .

The chart touches on which vendors are viewed as strategically important; which deliver the best ROI; and which those customers expect to do business with.

As a result, Kurian said, the numbers for Google Cloud are looking up in key areas such as number of customers, balanced growth across direct and indirect, and land-and-expand dynamics.

Asked by Goldman Sachs’ Terry to comment on what the biggest trend of 2021 might be, Kurian said, “Many CEOs recognize that digitization, even though it was accelerated by the pandemic, is fundamental. And so we expect that to continue beyond the pandemic. We expect them to see greater differentiation in the kinds of solutions people are adopting. And we continue to see organizations making important business decisions about what sort of technology platforms they need.”

RECOMMENDED READING

5 Reasons Why Google Cloud’s $5.6-Billion Loss Is Excellent News

The Disruptive Larry Ellison: Shatters Tradition to Reflect New Cloud Realities

Amazon Addresses Critical Blind Spot in Big Mainframe Deal with TCS

Salesforce Q4 Earnings: Can Marc Benioff Reverse Sharp Slide in Growth Rate?

Microsoft’s $10-Billion Secret: 6 Fun Facts about its Security Business

Oracle Cloud EVP Clay Magouyrk: Journey to Cloud Still Too Complex

Microsoft Wallops Amazon in 2020 Cloud Revenue; Bigger than AWS and Google Cloud Combined

Subscribe to the Cloud Wars Newsletter  for in-depth analysis of the major cloud vendors from the perspective of business customers. It’s free, it’s exclusive and it’s great!

Founder, Cloud Wars Co-Founder, Acceleration Economy

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Founder of Cloud Wars and Co-Founder of the Acceleration Economy, Bob leads the strategic direction of the global analyst network and actively covers the Cloud and Digital Business categories. Creator of Cloud Wars Top 10, a ranking and ongoing analysis world's most influential tech companies driving digital business and the digital economy. World-class strategic communicator focused on emerging business strategy, disruptive innovation, and forward-looking leadership.

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Company announcements

Our plans to invest $9.5 billion in the U.S. in 2022

Apr 13, 2022

[[read-time]] min read

Google’s offices and data centers provide vital anchors to our local communities and help us contribute to their economies. In the U.S., over the past five years, we’ve invested more than $37 billion in our offices and data centers in 26 states, creating over 40,000 full-time jobs. That’s in addition to the more than $40 billion in research and development we invested in the U.S. in 2020 and 2021.

Today we’re announcing plans to invest approximately $9.5 billion in our U.S. offices and data centers in 2022. (Full details of where we’re investing are below.) Along with these investments, we expect to create at least 12,000 new full-time Google jobs by the end of the year, and thousands more among our local suppliers, partners and communities.

Investing in our offices and data centers for the future

It might seem counterintuitive to step up our investment in physical offices even as we embrace more flexibility in how we work. Yet we believe it’s more important than ever to invest in our campuses and that doing so will make for better products, a greater quality of life for our employees, and stronger communities.

Our contribution to communities starts with the jobs we create, both directly and indirectly. According to new research published by the Bay Area Council Economic Institute today, creating one job at a high-technology firm generates over four more jobs in the local economy.

At the same time, our investments in data centers will continue to power the digital tools and services that help people and businesses thrive. And as we work towards running our offices and data centers on carbon-free energy 24/7 by 2030, we’re aiming to set new standards for green building design — including pursuing certification through the International Living Future Institute for buildings like our new office in Sunnyvale, California.

Creating jobs and strengthening communities

Today we are also releasing our 2021 Economic Impact Report , which reflects Google’s wider contribution to the economy. The report shows we helped provide $617 billion in economic activity for millions of American businesses, nonprofits, creators, developers and publishers last year. In addition, the Android app economy helped create nearly two million jobs last year, and YouTube’s creative ecosystem supported 394,000 jobs in 2020.

We also continue to help people get the skills they need to succeed in today’s economy, from our role as a founding member of the Michigan Central innovation district in Detroit to our $100 million Google Career Certificates Fund — a new financial model for helping people access education and digital skills.

Where we’re investing in 2022

Here are some more details on where we’ll be investing in 2022.

Construction underway at our new Kirkland Urban campus in Washington State.

Investing in our Nebraska data center presence.

Continuing progress on our Downtown West mixed-use development plans in San Jose, California.

Continuing to invest in our data centers across Northern Virginia.

Our new Pier 57 office in New York, with a public food hall and community spaces opening in 2022.

Investing in our Mayes County data center in Oklahoma.

South Region

In Georgia, we’re opening our new Atlanta office this year and continuing to invest in our data center in Douglas County. In Texas, we’re also making progress on our new downtown Austin office, which is currently under construction, and continuing to invest in our Midlothian data center. And we’re continuing to invest in our data centers in Tennessee, Virginia and Oklahoma.

Midwest Region

We’re continuing to invest in our data centers in Council Bluffs, Iowa, and in Nebraska.

East Region

We continue to invest in our long-term office presence in New York, and make improvements to our Cambridge and Pittsburgh campuses.

Central Region

We’re continuing to build out our campus in Boulder.

West Region

In California, we’ll continue to invest in our offices and support affordable housing initiatives in the Bay Area as part of our $1 billion housing commitment . Elsewhere on the West Coast, we’ve opened a new office in downtown Portland, and we’re continuing to invest in our data center in The Dalles. We’re also investing in our Kirkland and Seattle campuses in Washington State. In Nevada, our data center in Storey County is now operational, with plans to expand it, and we’re investing more in our Henderson facility, too.

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Investor presentation, spring 2024.

AWS, Google, Microsoft Battle Over $76B Q1 Cloud Market Share

Here’s the exact global cloud market share figures for AWS, Alibaba, Google Cloud, Microsoft and Salesforce for first quarter 2024 as the market increased to $76 billion.

The three largest cloud companies on the planet— Amazon Web Services , Microsoft and Google Cloud —continued to battle for global cloud market share leadership during the first quarter of 2024, as the market ballooned to a record $76 billion.

“Amazon held steady relative to the prior quarter, while Microsoft and Google both saw a marginal increase,” said John Dinsdale, a chief analyst at Synergy Research Group, in an email to CRN. “All three saw their growth rates increase substantially in the last two quarters.”

AWS, Google Cloud and Microsoft Azure —combined—accounted for a whopping 67 percent share of the $76 billion global cloud services market in Q1 2024, according to new data from IT market research firm Synergy.

[Related: Microsoft Vs. AWS Vs. Google Cloud Earnings Q1 2024 Face-Off ]

Before breaking down the exact market share figures for the top five cloud leaders during the first three months of 2024—which were AWS, Alibaba, Google , Microsoft and Salesforce—let’s take a quick look at the current cloud services market on a worldwide basis.

$76 Billion Cloud Market In Q1 2024, Up $13.5 Billion

Enterprise spending on cloud companies’ infrastructure services was well over $76 billion during the first quarter of 2024. This represents an increase of $13.5 billion or 21 percent year over year compared to Q1 2023.

“This was a really good quarter for the cloud market with growth rates bouncing back from the relative lows seen through much of 2023,” Dinsdale said. Public Infrastructure as-a-service (IaaS) and Platform as-a-service (PaaS) services account for the bulk of the market, with that section growing 23 percent in Q1 year over year.

“There are still some economic, currency and political headwinds. However, the underlying strength of the market is more than compensating for those constraints, aided in no small part by the impact of generative AI technology and services ,” he said.

Overall, Synergy Research Group is forecasting that the cloud market will continue to expand substantially over the next few years. “We are forecasting that it will double in size over the next four years,” Dinsdale said.

Here are the current enterprise cloud services market share figures for AWS , Alibaba, Google, Microsoft and Salesforce that every partner, investor and customer should know in 2024.

No. 5: Salesforce

Q1 2024 Market Share: 3%

Q4 2023 Market Share: 3%

Q1 2023 Market Share: 3%

CRM and cloud giant Salesforce captured 3 percent of the global cloud services market to rank at No. 5 in the first quarter of 2024.

Salesforce has consistently won approximately 3 percent share global cloud market every quarter over the past three years, according to Synergy data.

The San Francisco-based company generated nearly $35 billion in total sales in 2023, up 11 percent year over year.

No. 4: Alibaba

Q1 2024 Market Share: 4%

Q4 2023 Market Share: 4%

Q1 2023 Market Share: 4%

Alibaba continues to capture about 4 percent share of the global cloud services market as of first quarter 2024.

Alibaba subsidiary, Alibaba Cloud, is the Chinese-based company’s cloud computing business. The cloud company has won between 4 percent to 6 percent global market share over the past several years.

Alibaba’s Cloud Intelligence Group generated nearly $4 billion in sales during fourth quarter 2023, up 3 percent year over year.

No. 3: Google

Q1 2024 Market Share: 11%

Q4 2023 Market Share: 11%

Q1 2023 Market Share: 10%

Since 2019, Google has been the perennial third place winner in terms of global cloud market share. In Q1 2024, the tech giant captured 11 percent share of the worldwide cloud market.

The Mountain View, Calif.-based company’s cloud business, Google Cloud, generated $9.6 billion in revenue during Q1 2024, up a whopping 28 percent year over year.

Google Cloud’s annual run rate is now over $38 billion.

Operating income for Google Cloud—which had been in the red for every year prior to 2023—was $900 million for first quarter 2024.

No. 2: Microsoft

Q1 2024 Market Share: 25%

Q4 2023 Market Share: 24%

Q1 2023 Market Share: 23%

Microsoft continues to narrow its cloud market share gap against AWS as the software superstar seeks to capture a gold medal, not silver.

In Q1 2024, Microsoft won a record 25 percent share of the global cloud services market, up 2 points year over year compared to 23 percent share in Q1 2023. The Redmond, Wash.-based cloud and software giant has ranked No. 2 in the cloud market for nearly a decade.

Microsoft’s Intelligent Cloud business generated $26.7 billion in revenue during the first quarter, which means Microsoft’s cloud group has an annual rate of $107 billion.

No.1: Amazon Web Services

Q1 2024 Market Share: 31%

Q4 2023 Market Share: 31%

Q1 2023 Market Share: 32%

AWS is once again the worldwide market share leader in cloud computing, winning 31 percent share of the global market in Q1 2024.

The Seattle-based cloud juggernaut has been the worldwide cloud leader since Amazon pioneered the cloud industry well-over a decade ago. However, Google and Microsoft have both been nipping at AWS’ heels over the past two years. Specifically, Microsoft has gained market share by 2-points over the past year, while AWS’ share dropped 1-point to 31 percent share.

In Q1 2024, AWS reported total sales of $25 billion, representing a 17 percent revenue growth year over year. Amazon’s cloud business now has a record $100 billion run rate.

Other Top Cloud Market Leaders

IBM Market Share Q1 2024: 2%

Oracle Market Share Q1 2024: 2%

Tencent Market Share Q1 2024: 2%

Huawei Market Share Q1 2024: 2%

Prior to 2020, IBM used to crack into the top five for global cloud market share leaders. However, IBM’s share has lowered consistently over the past several years with the company winning 2 percent share in Q1 2024.

Oracle along with Chinese IT giants Huawei and Tencent are also trying to rise about the heated cloud competition. All three companies won around 2 percent share of the global cloud services market in first quarter 2024.

Other companies that won market share of approximately 1 percent during Q1 2024 include Baidu, China Telecom, China Unicom, Fujitsu, NTT, Snowflake, SAP, Rackspace and VMware.