Google Picks Diane Greene to Expand Its Cloud Business

Hub Telegram: Google is playing catch-up in the booming cloud computing market, well behind the early leader, Amazon. But on Thursday, Google made clear that it was ready to go on the offensive.

The company said that Diane B. Greene, one of its board members, would now head its cloud business that caters to companies. Larry Page, Google’s co-founder and chief executive of the parent company, Alphabet, called her new post a “huge new responsibility at Google.”

The selection of Ms. Greene is sure to make waves in Silicon Valley. The company’s focus and heritage has been mainly on online services for consumers, like search and email, supported by advertising. By placing Ms. Greene, a respected Silicon Valley entrepreneur and technologist, in charge of its corporate business, Google is signaling that it plans to move forcefully beyond its consumer roots.

Ms. Greene is best known as co-founder and former chief executive of VMware, whose software for juggling many computing programs across many computers is widely used in corporate data centers. That kind of “virtual machine” software is one of the technologies that makes computing clouds efficient and relatively inexpensive.

The cloud business, analysts and executives say, is just getting underway. Sundar Pichai, Google’s chief executive, noted in an interview that only a tiny fraction of the world’s data was now in the cloud.

But Google, despite its technology prowess, has lagged the leaders, particularly in enterprise cloud computing. At the same time, analysts say, the company’s offerings in cloud development services — computing, storage, data analytics and others — are already comparable to Amazon’s.

“Google is doing all these things, but it is not gaining enterprise mindshare,” said Eric Knipp, an analyst at Gartner. “It’s not pushing in the enterprise market as much as others.”

Google says that 60 percent of the Fortune 500 companies use a paid Google cloud service, with email and online office documents being the most popular. The business has done well, Mr. Pichai said in the interview, though its performance is not broken out in Google’s financial statements.

Yet the corporate business, he said, had developed largely as an “opportunistic” add-on to the consumer franchise. Mr. Pichai described Google’s corporate business a “journey that has organically evolved.”

The elevation of Ms. Greene suggests organic evolution is no longer sufficient. Ms. Greene, Mr. Pichai said, is “someone who understands enterprise needs very well” and whose goal is to “help us achieve our potential” in the corporate cloud market.

Ms. Greene, 60, is one of the most prominent women in the technology business and moves in the industry’s most elite circles. Her new title will be senior vice president for Google’s enterprise businesses, and she will remain on the Google board.

The big opportunity for Google and its competitors, analysts say, is in becoming the equivalent of an operating system for cloud computing, supplying underlying technology and programming tools for building business software. Nearly all new software applications are being written to be delivered over the Internet from computers in remote data centers, cloud-style.

In late 2012, Ms. Greene founded a start-up, Bebop Technologies, to build a new software development technology for writing cloud applications. Along with appointing Ms. Greene, Google has agreed to buy Bebop, which had not publicly said anything about its technology, operating in so-called stealth mode. Mr. Pichai said only that Bebop was pursuing “a unique, ambitious approach” to cloud software development.

Leading technology companies all offer software platforms for creating cloud applications, including Amazon, Microsoft, Salesforce, IBM and Google. The market for these cloud development tools is growing fast, to a projected $2.3 billion in 2019, up from $803 million this year, according to IDC.

But the development tools market is more important for its strategic significance than for its size. The more that software developers build cloud apps using a company’s development tools, the more apps will run on its computing cloud. That market, IDC forecasts, will grow more than 30 percent a year, from $7.8 billion in 2015 to $22.6 billion in 2019.

Ms. Greene, who has graduate degrees in naval architecture from the Massachusetts Institute of Technology and in computer science from the University of California, Berkeley, was joined at VMware by her husband, Mendel Rosenblum, a computer science professor at Stanford. Part of Mr. Rosenblum’s research formed the technological basis for VMware, which was founded in 1998.

In December 2003, growing at a torrid pace, VMware agreed to be acquired by EMC for $635 million in cash. At the time, Ms. Greene viewed EMC as a safe corporate parent, known for acquiring companies and giving them operating freedom. It also gave many of VMware’s original employees, who had stayed with the company through the lean times of the bursting of the tech-stock bubble in 2001 and its aftermath, a handsome payday.

For a while, VMware thrived as part of EMC. In 2007 EMC sold 15 percent of VMware to the public and gave it a separate stock listing, so Wall Street could invest in the fast-growing subsidiary. But Ms. Greene clashed repeatedly with EMC’s chief executive, Joseph M. Tucci, and he fired her in July 2008. VMware’s shares dropped 24 percent on the day she was ousted.

Ms. 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.

Ms. Greene described her goal in her new job as harnessing these technical capabilities as cloud services that can be built into corporate applications. “We want to bring together and integrate these technologies in a usable way,” she said, “so companies can move more quickly and make better decisions.”

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