By Jay Greene 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 9, 2019).

Weeks into his new job as head of Google's cloud business, Thomas Kurian identified a chief complaint from big business customers: They often didn't have account managers to call.

Understanding corporate customers is precisely why Google hired Mr. Kurian, who spent two decades at longtime adversary and competitor Oracle Corp., including running product development. Customers are happy with Google's technology, he said, but not their lack of access to sales managers to cater to their needs -- a basic business tactic.

Mr. Kurian said he has simplified contracts for different types of businesses instead of a one-size-fits-all approach, and has moved to more predictable pricing, in a way corporate buyers appreciate. He intends to dramatically boost Google Cloud's sales and support staff.

"There are certain things that you learn having dealt with enterprise customers for 22 years," Mr. Kurian said in an interview.

Clawing a bigger piece of the cloud is crucial for Google, a unit of Alphabet Inc., to diversify beyond online advertising. The ad business -- which has come under heat as users and legislators scrutinize how tech companies treat personal data -- contributed 83% of Alphabet's fourth-quarter revenue. Despite Alphabet's hefty investments in cloud computing, self-driving cars and other bets, those businesses are tiny relative to what Google makes from ads.

As the cloud-computing industry surged, Microsoft Corp. -- not Google -- emerged as Amazon.com Inc.'s top rival in providing on-demand computing power and storage, also known as cloud infrastructure.

Microsoft had 13.3% of the world-wide market in 2017, according to Gartner Inc.'s most recent data. Amazon, which pioneered the business, held 51.8%. Google's share: 3.3%.

Google Cloud had prioritized developing technology over sales and support, said Gene Reznik, strategy chief at the consulting firm Accenture PLC, which helps clients deploy tech from major cloud services including Google's.

"There is a lot of hand-holding required" with big corporate customers, Mr. Reznik said. But Google often had product engineers rather than account managers handle customer calls. "It really wasn't their day job, " he said, adding that Mr. Kurian brings a corporate credibility to Google's "consumer-centric culture."

Mr. Kurian, who regularly met with customers at Oracle even as a top engineering executive, said he recognizes the challenge. He has his first big chance to lay out his vision for closing the gap with Amazon and Microsoft when Google begins its annual cloud-computing conference Tuesday in San Francisco.

There, he plans to pull from the playbook of Oracle, which has struggled in cloud computing but has been a leader selling database software. Mr. Kurian will detail a dramatic ramp-up in Google Cloud's sales team and unveil new technology enabling programmers to develop applications that can run on Google Cloud as well as on services from Amazon and Microsoft -- comparing it to Oracle's widely used Java computing language.

The two have battled in courts for nearly a decade over Oracle's claim that Google's Android smartphone operating system infringed on copyrights related to Java. Oracle has sought as much as $9 billion in damages.

Their complicated relationship added another wrinkle when Mr. Kurian made his way to Google late last year. Before he left Oracle, he and the company said he was on an extended leave; a few weeks later, Oracle said he left. Less than two months after that, he was hired by Google.

Analysts give Google Cloud credit for its technology, particularly the services that help large corporate customers analyze data. But the company trails its two big rivals when it comes to providing sales and support services that those enterprise customers demand.

"They are running out of time," said Matt McIlwain, managing director of Madrona Venture Group LLC, a Seattle venture firm that invests in cloud startups. "If they don't get the enterprise selling right, they aren't going to win."

One shortcoming, for example: Google's contracts didn't often account for the diversity of its customers' needs, said Sri Shivananda, chief technology officer at PayPal Holdings Inc., a longtime Google Cloud customer. "You could see that Google was learning on the fly."

For most of its corporate life, Alphabet has focused on its advertising business. But Mr. Kurian said Google Chief Executive Sundar Pichai committed to investing enough for the cloud business to compete against its larger rivals.

"That's why they brought me here," Mr. Kurian said.

Mr. Kurian declined to provide specific figures but estimated his sales force is between one-10th and one-15th the size of sales forces at Amazon Web Services and Microsoft's Azure, which don't disclose such figures. Within two years, Mr. Kurian expects his sales staff to be about half their size. At the end of last year, Alphabet's total head count, including its core advertising business, was 98,771.

"It would seem difficult to absorb that many people in so short a time," said Stifel Nicolaus Co. analyst Brad Reback, who tracks cloud-computing companies but not Alphabet. Mr. Kurian said Oracle added as many as 4,000 sales staff in a year.

He plans to emulate another Oracle tactic: market specialization. Much of Google Cloud's sales force will focus on specific industries, such as health care or auto manufacturing, to better cater to their needs.

Some customers, though, hope Mr. Kurian won't bring Oracle's famously high-pressure sales approach. "As much as he brings the enterprise focus to the table, there are some who worry that he brings Oracle to the table," said Andy Zitney, chief technology officer at the tech unit of McKesson Corp., referring to hardball sales tactics some Oracle customers had criticized.

McKesson, a pharmaceuticals and health-care products distributor, signed a deal with Google Cloud in January to use its analytics services, in part, to improve its manufacturing and distribution operations. It didn't disclose financial terms.

Write to Jay Greene at Jay.Greene@wsj.com

 

(END) Dow Jones Newswires

April 09, 2019 02:47 ET (06:47 GMT)

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