Mathias Rosenthal - Fotolia
Speculation is high among industry watchers that new Google Cloud CEO Thomas Kurian will put his stamp on Google's cloud plans with large acquisitions to capture market share and differentiate from rivals AWS and Microsoft Azure.
Until November 2018, Kurian oversaw all product development at Oracle, including the company's vast fleet of enterprise applications. He also helped steer Oracle away from on-premises software to SaaS, an area where Google Cloud Platform (GCP) has few products besides its core G Suite email and productivity apps.
Now in charge of Google's Cloud Platform, Kurian likely will apply that experience to give GCP more enterprise appeal. And according to company observers, he has many choices in possible acquisition targets, as he guides GCP's direction. It could be a large, splashy acquisition or a string of multiple smaller deals, and any path will likely be expensive, said Stephen Elliot, an analyst at IDC.
"I think [Google] should go as big as they can and go for enterprise wallet share," Elliott said.
Enterprise apps would strengthen Google's cloud pitch
A move into business-process-centric enterprise apps, such as human capital management and customer relationship management, would be a big -- and costly -- departure for GCP. However, Workday, Salesforce and ServiceNow would each bring growth, a solid application portfolio and strong enterprise presence, Elliot said.
Such deals would indeed be massive. Workday's current market capitalization is $37.5 billion, while ServiceNow has $33.5 billion and Salesforce nearly $114 billion.
Parent company Alphabet had more than $106 billion in cash and short-term investments as of Sept. 30, but likely would not deplete those reserves to execute a huge acquisition. It could arrange a deal with borrowed money and other tactics, or it could merge with a vendor too massive to buy outright.
Perhaps the richest prize of all would be SAP, the ERP applications giant and longtime Google partner. SAP has a market cap of $127 billion, more than 400,000 customers and a massive channel with 18,000 partners.
SAP would be a major catalyst for GCP's drive into large enterprise accounts, said Ryan Marsh, a software development trainer and consultant in Houston who also works as an evangelist for testing tools vendor Xolv.io.
"Companies that use SAP typically have many applications hanging off of it, since it's intended to be the central place for business data ... [but] I've seen several companies who use SAP pump the brakes on cloud," Marsh said. "If you get them to lift and shift that workload to the cloud, then you get second-order effects of the other applications in the company. Once SAP is in your cloud, it's not moving."
Google did not respond to a request for comment on its acquisition plans.
Google's cloud plans: Not if, but when
GCP has acquired more than 20 companies since 2013, as analyst firm CB Insights noted in an August report. That's far more than AWS, although the latter recently drew headlines for its purchases of CloudEndure and TSO Logic.
Microsoft has bolstered its Azure cloud platform in recent years, with as many acquisitions as GCP. But none of the three top cloud providers have made a truly blockbuster cloud deal, save for Microsoft's $7.5 billion purchase of GitHub last year.
Stephen Elliotanalyst at IDC
GCP likely isn't averse to the prospect of megadeals. Atlassian and Slack have long been rumored to be Google acquisition targets, and the company reportedly had its eye on both GitHub and Red Hat, which went to IBM.
Kurian's track record at Oracle provides clues to his possible Google cloud plans. Oracle made dozens of acquisitions in the past decade that run the gamut from servers to middleware and general enterprise applications, and Kurian surely influenced Oracle's buying strategy during his long tenure there.
Big factors in Oracle's merger-and-acquisition decisions are a vendor's size -- Oracle sees more growth potential in smaller ones -- and synergy between the company's industry-specific capabilities and Oracle's global business unit structure, according to a 2016 Fortune article.
Can Kurian bring the same playbook to GCP?
GCP edges out its rivals in areas such as Kubernetes container management and machine learning via TensorFlow, and Kurian may want to extend GCP's lead in those technologies, said Holger Mueller, an analyst at Constellation Research in Cupertino, Calif. A shift into enterprise applications would damage its market image as an agnostic IaaS provider willing to work with all players, he said.
GCP does want more enterprise workloads, so a stronger systems integration and services strategy would help, Mueller said. It would get all three if it purchases VMware from Dell, he added. That would cost a minimum of $60 billion, based on VMware's current market cap.
If Kurian sticks to technology-related acquisitions, rather than applications, some key areas where GCP should fill gaps include nested virtualization, Layer 3 networking, data and VM migration and VM conversion, said Deepak Mohan, an analyst at IDC. Google also could fortify its managed services, automated monitoring and automated advisory tools, he said.
Kurian could push for smaller acquisitions at first, but this kind of executive doesn't take a high-profile job in a competitive market to just keep the lights on. The safe money says Kurian's shopping trip starts sooner rather than later.