In the past year, Google Cloud has made "significant gains" in market share and its capabilities, according to a recent report from Gartner, but it will have to do more to catch up to its rivals Amazon and Microsoft.
Gartner recently published its annual Magic Quadrant report that ranks cloud services like Amazon Web Services, Microsoft, and Google Cloud in categories like "ability to execute" and "completeness of vision." Google Cloud ranks third behind AWS and Microsoft Azure, respectively.
As it plays catch up, Google Cloud has been playing to its strengths, Gartner said. For one, Google Cloud has made some game-changing contributions in open source, including its widely used Kubernetes cloud-computing project and its TensorFlow artificial-intelligence project. All this has helped Google Cloud win the hearts and minds of developers.
Still, some customers may be cautious about Google Cloud serving the needs of large business customers, Raj Bala, a research director at Gartner, said.
Microsoft has a long history of selling to huge enterprises, while Amazon has first-mover advantage: It pioneered the cloud business, and its cloud unit reeled in over $10 billion in revenue in the most recent quarter. Google Cloud, meanwhile, is on track to generate over $10 billion in revenue this year.
"Google does not have the enterprise pedigree that Microsoft has," Bala told Business Insider. "That remains their biggest struggle: essentially being able to convince enterprises they're a legitimate supplier of enterprise IT."
Winning small and large customers alike
Beyond Google Cloud's open-source strengths, many clients know Google Cloud for its capabilities in big data and data science, Gartner said. And with the launch of a product called Anthos, Google Cloud is focusing on building out its hybrid cloud, which allows customers to use their private data centers alongside Google Cloud, and even rival clouds like AWS and Microsoft.
While Microsoft was the first major cloud to promote this hybrid strategy, Anthos could help Google win major customers in highly regulated industries like finance and telecommunications, which may need to keep some data in private data centers.
"Google's strength is they really go for this vision for Anthos and Kubernetes on GCP that is quite distinct from everyone else," Bala said.
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Still, Bala said Google Cloud needed to be more clear about how solutions like Anthos could help large business customers.
"The downside is they managed to really confuse the market as to what it is with too much hand-waving," Bala said.
The essence of Anthos may have been lost in the fanfare, Bala said.
"That may have confused the market as opposed to saying, 'It's a succinct set of services to make enterprises more agile with how they build, operate, and deploy applications,'" he said.
Last year, Google Cloud also faced several outages, which Gartner described as having a "devastating impact" on customers like Snapchat and Discord, as well Google's own apps, like G Suite and YouTube.
"Reliability is our number one priority," a Google Cloud spokesperson said in a statement. "Service disruptions happen occasionally, as they do with all cloud providers, and we work to address them quickly and to be transparent with our customers about the nature and extent of those service disruptions. We also conduct and complete thorough post-mortems which are designed to systemically address risks across the platform, and prevent recurrence. We know events like these are disruptive for our customers, and acknowledge they do not meet our high internal standards for customer experience."
Still, if Google Cloud fixes these issues and ramps up its ability to work with large business customers, it has the potential to win over customers worldwide, as many businesses around the world have yet to move to the cloud, Bala said, adding, "There are still parts of the world that are still up for grabs."
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