Google’s Tariq Shaukat on how his company plans to catch up to Amazon

The search giant finds itself behind in the race to shift enterprise customers to cloud computing. Here’s how it intends to close the gap

Tariq Shaukat

Google Cloud customers president Tariq Shaukat. (Google)

Google may be somewhat late to the cloud services party, but the search giant is making up for lost time now with a full-court press.

At its Next cloud conference in San Francisco last week, the company announced a slew of key partnerships with companies including Disney, Colgate Palmolive and HSBC.

Google also announced a number of new international “Cloud Regions,” or data centres combined with service support operations, including one in Montreal.

I had a chance to speak with Tariq Shaukat, president of Google Cloud customers, about how the company plans to catch up to Amazon and Microsoft, particularly in Canada. Here’s an edited version of that conversation.

It may be self-evident, but why is it important for Google to be in cloud services? Would not being in this space be as disadvantageous 10 years from now as, say, not being in mobile is today?

Google has really built itself on the cloud and was really a pioneer in a lot of the technologies and capabilities that are now thought of as being part of the cloud.

The way I term it to my team is that we’ve been essentially in the cloud business for 18 or 19 years with one captive customer for many, many of those years.

As we look at how we work more closely with our customers, one of the biggest questions we’ve gotten over the years and are still getting today is, “How can you help us grow and how can you help us perform better, not just in advertising but in other parts of our business?”

It became a very natural fit, particularly when you think about how businesses are becoming more and more data-driven, more and more insights-driven.

How important do you see it being for the future of the company?

If you talk to [CEO] Sundar [Pichai] or [Chairman] Eric Schmidt, they will say this is one of the top two or three priorities of the company from a growth standpoint.

It’s something that we are seeing as a big growth vector for the future and we think we’re one of a handful of companies that really have the scale to do it.

It seems like you’re starting late, or at least Amazon is far ahead. How are you planning to win customers and convince them to come on board?

The interesting thing about the market is… we’ve been building cloud technology and infrastructure for a long, long time, but we’ve just started commercializing it.

I’d say where we’re behind is on the commercialization front, but not on the technology front.

If you talk to the Colgates or the Verizons or the Schlumbergers or what have you, it has historically always been that they are looking for the best technology for collaboration, for getting insights, for doing all of the work that they try to do.

What we’ve spent a lot of time focusing on in the last year is making sure that we’re able to deliver that technology in a way that is super-customer-friendly and that is supported at a level they feel like they need, and that’s from both a sales and account coverage standpoint.

Google talks about how it has built this infrastructure and is now just letting others use it. If you talk to customers, they mention how much cheaper Google Cloud is. Given that, is this business just gravy for Google?

I think there’s a couple of things to that.

We believe we have a price advantage versus the other guys, but it’s important to note that a large part of that… is because of how customers can use our stuff as opposed to the unit price necessarily being cheaper in every case.

As an example, when you can custom configure a machine type versus having to use a machine that may not be right for you, that’s actually cheaper for you, even though the unit price may be somewhat similar.

When you pay by the minute versus paying by the hour, that’s again cheaper.

When we talk about being super-customer-friendly, it’s all about trying to provide that elasticity that you really have been promised when you move into the cloud. We believe that generates upwards of 20-per-cent savings for a company.

There’s a second piece and both of our technical teams on G Suite and [Google Cloud Platform] will talk about this a lot, around the level of automation and the level of operating efficiencies that we’ve baked into our system.

In terms of the operations support that we have automated inside of the tools, it’s actually cheaper for us to run them. It’s something as straightforward as energy consumption in our data centres.

We’ve now applied machine learning to reduce our cooling energy consumption by 40 per cent and all of that provides us with a lower base, which we then pass along to our customers.

Are you purposely pricing lower than Amazon and Microsoft?

There are hundreds of features so we’ll be lower on some and we’ll be the same on others. There isn’t a consistent strategy that we have to always be the price leader in every single element.

What we do believe is that we will deliver the best value. That would be true on the pricing level of how much you pay for what you get to the price-performance level, as well as on the value-creation level.

We’ve had some customers come to us from competing clouds and they say, “Well this is how many cores and these are the tools I use and I’m paying X, so how much does it cost to get the same number of cores?”

We always tell them that’s the wrong question. The right question is, “How much does it cost to do that job and get that workload and have it run on our cloud?”

There, we think it is very rare for us to find a case where a customer won’t save money. But it’s not just because we are going in as the price leader on every element. It’s sort of an apples-to-oranges comparison.

Canadian businesses tend to be conservative when it comes to adopting new technology. How do you convince such operations to get into cloud services?

You heard from HSBC on stage. They’re not a Canadian company, but they are an illustration of a conservative industry. Financial services is highly regulated, hugely concerned about security and privacy.

What we’re seeing from even conservative companies is they realize that in many cases it is more conservative to be in the cloud than [not].

The easiest example of this is how you secure your e-mail and documents. If you’re a typical doctor’s office or a legal firm or an accounting firm and you’re weighing, “Should I have an on-premises closet that has a server in it that is serving my e-mail and maintaining my patient records or should I have it in the cloud?”

I would argue that the more conservative and less risky approach is to have that in the cloud because we’re handling security for you, both physical and cyber security. Things you just couldn’t do as a small business you’re now getting taken care of for you by people like our security experts.

As we talk to small more and more small businesses in Canada and the world, when they realize that, the light bulb goes off and they say, “Yes, you’re right, there’s no way I’m going to be able to prevent the hacker from wherever from getting into my files because I’m just not skilled enough, Google can help me do that.”

Then we see that shift, so that’s where a lot of our focus is – on education around security and reliability and ease of use.

How small is too small? The cloud makes sense for companies with IT departments, but what about cafes or restaurants or businesses with four or five people?

When you get to the really small business area, G Suite is an example. It’s a cloud-based collaboration platform and there are three million paying businesses on it. The vast majority of them are small and mid-sized companies.

They’re very interested in the solutions that come out of the box that you don’t need to install anything or need to worry about security and patching.

Our focus is ensuring that the product is easy to use and that you’ve got packaged solutions where you need them.