Google (GOOGL) may be the third-largest cloud player -- trailing Amazon's (AMZN) Web Services and Microsoft's (MSFT) Azure in market share -- but Google Cloud CEO Diane Greene is seeing things differently.
At Google's Cloud Next event for developers and IT professionals in San Francisco on Tuesday, Greene argued that more large enterprises are turning to Google Cloud because cutting-edge technology for business is simply what Google does best. "We are an enterprise company, but a very modern enterprise company," Greene said. "There's been 20 years of scaling and optimizing Google's cloud."
And those years of work are starting to bear fruit, Greene said, name-checking some of Google Cloud's latest big customers wins, including Target (TGT) and Unity, the game development powerhouse that recently switched to Google Cloud from Amazon's AWS.
Even Netflix (NFLX) CEO Reed Hastings is a fan: Greene said Hastings is a "power user" of Google's Chromebook and G Suite, Google's family of email, calendar, document and other services, which she described as the most secure computing setup possible in conjunction with two-factor authentication. Meanwhile, Netflix -- a longtime customer of AWS -- is using Google's cloud for some workloads, though a Netflix spokesperson said in an April statement: "There is no change in our comprehensive relationship with AWS," in response to reports that Netflix was migrating some of its functions to Google Cloud.
Chromebook enterprise sales were up 175% last year, she said, and Google Cloud is "investing heavily in AI and security" particularly with respect to G Suite, which had about three million paying business customers as of last year.
Greene said that Google Cloud's combination of engineering muscle and appealing, easy-to-use services will make the underdog cloud provider an increasingly attractive choice for major enterprises, citing its gains in areas such as healthcare, retail and manufacturing.
"When we talk about enterprise readiness, we're talking about combining customer-facing expertise with engineering expertise," Greene said.
For Google Cloud, that means continuing to beef up its infrastructure while ensuring that its cloud services -- the interfaces and apps that are what customers tend to see -- look as good and are as fast as possible.
As part of that effort, Google Cloud's SVP of technical infrastructure Urs Hӧlzle unveiled Google's Cloud Services Platform, a new suite of cloud services for organizations with workloads that are hosted 'on premise' on their own servers.
Services that bridge the gap and allow hybrid models between 'on-premise' data centers and public clouds such as AWS, Azure or Google Cloud are a growing market, with worldwide spending on such services expected to reach $186.4 billion this year, up 21% from 2017 according to Gartner.
Google Cloud has gained market share over the past few quarters, alongside increasing demand overall for public cloud providers. According to Synergy Group, Google's share of the market grew one percentage point in 2017, and stands at around 6%, compared to Microsoft's 15% and Amazon commanding about one-third of the market.
In the bigger scheme of Alphabet's revenue, Google Cloud is small relative to its advertising segment, but growing. On Alphabet's earnings call Monday after the close, Google reported that its 'Google Other' segment, which includes its cloud business and Google Play store, saw revenue rise 37% to $4.43 billion. 'Google Other' now represents 12% of Google's total business.
Meanwhile, Alphabet's advertising and other segments have continued to deliver strong growth like clockwork. In the second quarter, Alphabet reported that total revenue grew 24% to $32.66 billion and net income rising to $8.3 billion, both of which significantly exceeded analyst estimates. Shares of Alphabet were rising 3.5% to $1,247 in late afternoon trading on Tuesday.