How VMware's Diane Greene will help Google capitalize on a massive cloud opportunity

Appointing the VMware co-founder to lead its cloud business is exactly the move Google had in mind when it restructured as Alphabet.

Google VMware founder Diane Green cloud business

Sundar Pichai speaking at Mobile World Congress in Barcelona March 2, 2015.

Credit: REUTERS/Albert Gea

VMware co-founder Diane Greene, recently appointed as the head of Google's cloud business, adds operating responsibility to her role on Alphabet's board of directors. Greene's new title will be SVP of Enterprise Businesses, reporting to Google CEO Sundar Pichai, who also announced in a blog post last night that Google would acquire bebop, a cloud computing software development company founded by Greene, for an undisclosed amount.

One reason for restructuring Google into Alphabet was to recruit top managers to run the company's many different businesses. Likewise, Google under Pichai has a broad span of businesses and technologies, impossible for any single person to lead. Greene's appointment and new cloud organization seem to be intended to bring focus to growing the cloud business under a proven leader, in the same way that Alphabet CEO Larry Page intended when he reorganized the company.

Gartner ranks Google third in the Infrastructure as a Service race, but Urs Hölzle, Google SVP of technical infrastructure, said earlier this week at the Structure Conference, "our cloud growth rate is probably industry-leading."

gartner cloud chart Gartner

Products and business functions will be consolidated under Green. According Pichai's post, her new team combines all of its cloud businesses, including Google for Work, Cloud Platform, and Google Apps. Engineering, marketing, and sales functions will be integrated under Greene and her new leadership team.

Greene's three years on the board of directors gives her a unique perspective on leveraging Google's strengths and technology leadership. Google already has a beachhead in the Fortune 500, with 60% using a paid Google for Work product that can be expanded to include more products from Google's suite of cloud products. Google also operates its search, cloud services, and apps businesses on the largest public data center capacity, giving it economies of scale that will challenge its competitors to match in both cost and quality of execution. 

The New York Times reported that Greene said she had some "trepidation" about returning to the public arena as a prominent corporate executive. But she found the Google opportunity irresistible. Since she joined the board in 2012, she said, she has been increasingly impressed by Google's people and its "amazingly sophisticated technologies," including machine learning, data analytics, voice and image recognition, and search.

At the Structure conference, Hölzle compared the rise of the smartphone to cloud computing. The iPhone was first introduced in 2007, introducing a complete product concept that focused consumer demand. Google's Android was introduced slightly later, but despite the late start has become the dominant mobile operating system worldwide.

Google has a comprehensive suite of cloud services, including computing, storage, networking, and big data. Google can further differentiate its offerings with its industry-leading core competencies, such as its current language translation and machine-learning predictive services.

Pichai pointed to Google's large opportunity, saying that only a "tiny fraction of the world's data is currently in the cloud – most businesses and applications aren't cloud-based yet." But the business is now large enough to need top leadership. Just as the Alphabet reorganization was intended to bring transparency, perhaps the cloud business's revenue and operating figures will soon be broken out and reported separately.

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