Not many businesses grew by over 50% in 2019. Not many of them will show a similar growth figure in 2020 either. When it comes to the Cloud though, these are numbers that are very normal, and its’ not the first time that Google has seen a boom when it comes to their products.
Google, or Alphabet as they are now known, IPO’d back in 2004 on the Nasdaq at $85 per share. Today the shares are above $1500 and although the Virus plunged the Tech Giant down to almost $1000, the rebound was extremely quick with Alphabet now threatening to hit new heights when it comes to their share price.
Although the share price increase in 2020 so far can’t all be put down to Thomas Kurian who joined Google Cloud in late 2018 as the CEO of the Cloud Platform. Several other new hires and new growth targets have certainly helped grow their share price, Thomas is just one example of how Google are approaching the future and raising their share price while they are doing it. Thomas is a Tech veteran having spent more than 20 years at Oracle before joining Google where he has taken on the significant task of re-focussing their Cloud business to work closer with partners and develop better Enterprise solutions.
A few months after Thomas’s appointment the roll-out of the new image Google Cloud Anthos software product began, replacing the Google Cloud Services Platform brand that the company had before. By 2020 Anthos started to record substantial successes with customer wins including HSBC, PayPal and Lloyds. Further banks such as ABN Amro, Monzo, Nationwide, Revolut, Bank of Canada, Starling Bank and Unicredit use a plethora of other services provided by Google such as Apigee and BigQuery.
The PayPal story is one worth looking at more closely, with Dan Torunian, PayPal’s Vice President, Employee Technology & Experiences and Data Centers saying: “We believe Google Cloud’s offering is the right fit when it comes to providing security, quality and velocity.” It is no accident that led Dan to making this comment, as there are many reasons to choose Anthos over other providers, especially in the Financial Services sector. With Cloud technology ‘instances’ and how often they are used becoming one of the major reasons to choose a provider. Google doesn’t let their customers down, offering some of the best value for money services for its compute price, as well as compatibility with DevOps which is far superior to other Cloud providers.
“With Anthos and Google Kubernetes Engine (GKE) you can build your apps in one place and then be able to deploy across multiple clouds.. and have that hybrid cloud infrastructure or even a combination of on premise and cloud based functionalities,” said Christin Brown, Global Financial Services Strategy & Solutions Lead at Google a few weeks ago. With Regulators not being too keen on having the same provider working with the majority of banks in a jurisdiction, Google’s Anthos seems to be developed with collaboration in mind.
„Today, if you talk to Azure they will say you can run Azure Stack on-premise and on the cloud, Amazon will say you can run Outposts on-premise and in the AWS cloud. They are fine companies, but they’re not solving the multi-cloud problem,” Google Cloud CEO Thomas Kurian shared with readers in November 2019. Clearly Google are looking at this though.
There are many sites extolling the pros and cons of the major Cloud platforms available out there. Google do well in areas like Machine Learning and AI, where the TensorFlow’s platform is an incremental reason for Google scoring so high in AI development. There seems to be more and more reasons for Banks to choose Google over other suppliers, even though historically Google may have been more of an addition or after-thought to the services provided by AWS or Azure, this could have changed in the last few weeks.
Two weeks ago Deutsche Bank joined the list of Google’s customers, a story that we covered the introduction to here at #DisruptionBanking a few weeks ago:
According to JPMorgan’s CIO report we shared with our readers in a recent Article, Microsoft is confirmed as the Number 1 Cloud platform when it comes to market share today. It is not just the CIOs who were interviewed either, revenues are also confirming that Microsoft will be gaining substantial amounts of the Cloud marketplace unfolding globally. If you follow the link in the Tweet below you will be able to view one of the most comprehensive explanations of Cloud marketshare:
On a separate note, some have said that Google, Apple and others might one day offer the same services as Banks. Some theories out there suggest that buying Data Aggregators (like Mastercard and VISA already have) maybe one way of doing this.
Google, instead seem to be keener on hiring talent than buying businesses in the data aggregator sector, for now, at least, and there may well be a reason for their caution.
In October 2019 Deutsche Bank analysts valued the Google Cloud business at $225 Billion, suggesting that Mr. Kurian’s leadership was giving the historically under-performing Cloud division confidence.
They may need the money having spent over $1 billion for Googleplex and the adjoining office park in Silicon Valley in the not too recent past.
But unoccupied offices are not the only problem for Big Tech these days. And there may well be a reason why Deutsche Bank placed a valuation on Google’s Cloud business the way they did. With a meeting coming up in Washington on the subject of Anti-Trust, Big Tech is back on the table in the US and talk of breaking up the biggest corporations in the Tech sphere is also .
Larry Page and Sergei Brin stepped out of their roles leading Alphabet just before the end of 2019. It will mean that instead of them, the new(ish) CEO Sundar Pichai will be meeting alongside Jeff Bezos, Mark Zuckerberg and Tim Cook. They will all be meeting either in person or on … zoom? Perhaps, on the 27th July, in Washington.
In a recent joint statement from House Judiciary Committee Chairman Jerrold Nadler and Antitrust Subcommittee Chairman David Cicilline:
“Since last June, the Subcommittee has been investigating the dominance of a small number of digital platforms and the adequacy of existing antitrust laws and enforcement. Given the central role these corporations play in the lives of the American people, it is critical that their CEOs are forthcoming. As we have said from the start, their testimony is essential for us to complete this investigation.”
Another recent story according to Bloomberg suggests that China also appears to be off the map when earlier this month Google decided to pause its plans for “Isolated Region” in China (two employees suggested), this was the name of a strategic plan Google had put in place to gain a foothold in more isolated regions like China. Google itself confirmed as a follow-up that the company isn’t weighing options to offer the Google Cloud Platform in China (for now, anyway). Amazon and Microsoft have managed to make it work in China, while Google are still considering the best approach to take in working with the 900 million internet user market.
And what about DeepMind?
Demis Hassabis is by many considered one of the most influential people in AI. Heading up the DeepMind business within the Alphabet group of companies, Demis has been in the press this year amidst speculation he spoke to the government about ideas on helping the NHS. There were mixed responses to his initiative due to a data leak in a project that DeepMind completed for a local NHS Trust a few years earlier.
Aside from its work in healthcare – which in September 2019 became part of Google Health – DeepMind is relatively quiet about how it is applying its AI to more practical problems. There are some exceptions – DeepMind’s AI has already helped to make Google’s data centres more energy efficient and improve the firm’s text-to-speech systems – but not much else seems to be relevant to the banking community.
Google has a big history with AI which doesn’t just involve Demis. Mustafa Suleyman, 34, the ‘other’ co-founder of DeepMind has had his ups and downs, but one of his biggest challenges has been putting together a slightly highly priced team of AI professionals… A move that may not have been welcomed as much as he hoped by the Executives at Alphabet, even though it does appear this is an area of focus for the group. Mustafa is seen as a “social activist” by many in the Tech sector and has now moved from DeepMind to work for Google directly. Mustafa has in the past worked on the aforementioned lowering energy consumption of data centers amongst other projects. Although not from a tech background, he has strong views on how Artificial Intelligence should be used ethically. For a good interview with him about this and some of his other views and projects, follow the link to the podcast from the FT last year.
Geoffrey Hinton, the deep-learning godfather, also joined Google in 2013 to continue the work of Andrew Ng. Geoffrey designs machine learning algorithms, and contributes widely into neural network research. His research group in Toronto made major breakthroughs in deep learning that have revolutionized speech recognition and object classification.
DeepMind, Demis Hassabis and Mustafa Sulejman are involved in some extremely important projects both within Alphabet group and for society globally. With Google’s Anthos showing promising growth in both market share and market penetration, the future for Google could be brighter than we can even imagine if they continue to develop their Cloud presence, supplementing it with state-of-the-art AI.
Author: Andy Samu