If the announcements made during Alphabet/Google's (GOOGL) - Get Alphabet Inc. Class A Report April cloud conference didn't make it clear that the company is ready to go the extra mile to grow its cloud market share at large enterprises, its latest move definitely should.
On Thursday morning, the web giant made one of my 2019 tech predictions (No. 9) come true by announcing that it's buying Looker, a provider of business intelligence (BI) and data visualization software that runs both on cloud infrastructures and in traditional enterprise data centers, for $2.6 billion in cash. Google says Looker will join its Google Cloud unit, which contains the Google Cloud Platform (GCP) and the G Suite family of apps, and that the deal is expected to close "later this year."
Google also highlights the fact that it already shares over 350 common clients with Looker. For its part, Looker promises its platform will continue supporting popular third-party database and data warehousing solutions from the likes of Amazon.com (AMZN) - Get Amazon.com, Inc. Report , Microsoft and Oracle, in addition to Google's.
There are some clear synergies between Looker's analytics software and GCP's popular BigQuery data warehousing service, which is used to store and run queries against massive datasets (the companies inked a partnership related to BigQuery last summer). There also appear to be some synergies with Alooma, a database migration software firm that Google bought earlier this year.
Nonetheless, the deal has raised some eyebrows, both given its cost and the fact that Looker is just one of many players in a highly competitive BI/analytics software market.
In its 2019 Magic Quadrant report for analytics and BI platforms, research firm Gartner placed Looker within its "Niche Players" quadrant, along with 11 other firms. Ten additional firms were placed in the three other quadrants, with Tableau Software (DATA) - Get Tableau Software, Inc. Class A Report and Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report occupying (as they did in prior years) the most prestigious spots within Gartner's "Leaders" quadrant.
So why was Google willing to spend $2.6 billion to buy Looker in particular? Judging by a blog post from Google Cloud chief Thomas Kurian, Looker's unique data modeling capabilities, which simplifies the process of defining business metrics that a company wants to analyze and visualize across data sources, appear to have been a selling point. Kurian also suggests Google likes the breadth of Looker's analytics software offerings, which include not just general-purpose BI software but also purpose-built apps for sales and marketing and a solution for embedding Looker's software within third-party apps. There could be synergies with some of these offerings and Google Analytics, which is widely used by web publishers and marketers.
Gartner's commentary on Looker also provides some clues. The firm praises Looker's native support for cloud-based analytic databases (including BigQuery), as well as its superb scalability and strong customer support. On the flip side, Gartner is critical of Looker's ease-of-use, as well as the fact that (unlike, say, Tableau) Looker's roadmap didn't include efforts to support natural-language queries and augmented analytics.
Of course, natural-language queries and augmented analytics are the kinds of things that Google, with its massive AI investments and popular cloud machine learning services, seems well-positioned to help out with. And looking more broadly at the deal, the purchase fits with Google's recent, aggressive efforts to grow GCP's public cloud market share, which (according to industry estimates) remains well below Microsoft Azure's and a fraction of Amazon Web Services' (AWS).
Two months ago, Kurian, who joined Google last fall after leaving Oracle, promised at Google's Cloud Next conference his company will significantly boost its enterprise sales investments, as well as provide more simplified cloud pricing. In addition, Google used Cloud Next to reveal (among other things) Anthos, a versatile platform for deploying hybrid clouds that leverage both public cloud infrastructures and an enterprise's on-premise infrastructure that's supported by several IT giants.
These moves and the Looker acquisition don't guarantee that GCP, which has been praised for its technical strengths in areas such as analytics and machine learning but whose total feature set and enterprise sales/support have at times been deemed lacking relative to AWS and Azure, will soon see a major jump in the number of big enterprise deals it inks. But given the groundwork that Google is putting in place, some uptick seems likely.
And considering how much of a priority Google has made out of growing its enterprise cloud presence, it wouldn't be shocking off the Looker deal is followed by another major purchase to strengthen GCP.