2024 Google Cloud Next Trip Report

Google emphasizes enterprise business outcomes alongside innovation

Google’s annual Google Cloud Next event marked an important shift in Google’s focus by their emphasis of business outcomes. Historically, Google has been a highly technical company which has been met with mixed results among enterprise customers. Connecting business and technology marks a positive and meaningful change in direction for Google. Discussions on business outcomes then led to platforms and data; two key areas of focus for enterprises today. The major conference themes showed Google’s progress and innovation in AI and generative AI, custom silicon, developer tools, agents, and Workspace. Google also presented their progress in sustainability and governance, two of the key pillars of ESG. As with most major enterprise initiatives, partners play an important role and Google demonstrated their response to the challenge through significant growth of their partner program.

Only a short eight months after Next 2023, Google held their annual Google Cloud Next event, this time in Las Vegas. Next 2023 was Google first in-person event since the pandemic. Google Cloud Next is Google’s annual event to showcase their Google Cloud and Workspace products. The shift to Las Vegas also opened the ability to hold a much larger event with over 30,000 attendees in person and many more attending virtually. I attended the in-person live event to get a first-hand look at Google’s progress and to participate in conversations with Google executives. The theme for this year’s Next was “The new way to cloud”. One executive stated that 2023 was the year of AI experimentation. 2024 is the year of AI execution.

In the eyes of customers, Google has long-since been seen as a solid technology player in the cloud computing space. Looking at the numbers compared from last year’s Next, Google now has a $36 billion annual run rate (+$4B) for Google Cloud and is one of the top hyperscale cloud providers and workplace productivity players. Google operates 40 cloud regions (+2), 121 zones (+6) and 187 network edge locations (+0) in more than 200 countries and territories (+0). More than 60% of the world’s 1,000 largest companies are Google Cloud customers. Google continues to evolve and innovate their technology with over 1,000 enhancements just in the past eight months since the last Next event. 

Last year’s Next event focused heavily on technology. At this year’s Next, Google’s focus was on AI, custom silicon, developer solutions and user productivity. However, there was also marked shift in their messaging to embrace a focus on business outcomes. This is a significant and positive directional change for Google Cloud.

While Google did make many significant and positive announcements, there were a few missing points. One area that needed more attention was around security. In the past, Google has talked a lot about security. For this event, Google made more than 25 announcements on security, but during the keynote security seemed less of a highlight and more of a footnote. Considering that security around data and infrastructure is such a critical item for enterprises, this seemed a miss on Google’s part.

The new advancements from Google Cloud focused in five major themes:

AI and Generative AI: Google announced Gemini 1.5 Pro with support for a whopping and industry leading 1 million tokens. Gemini is Google’s native multi-modal LLM offering (formerly called Bard). Gemini is also being introduced across the Google portfolio of services including Workspace. Today, nearly 90% of the GenAI unicorns are Google Cloud customers (up from 70% last year). More than 60% of all funded GenAI startups use Google Cloud (up from 50% last year). Gemini is also being used, in production, across Google Workspace’s productivity applications. More than 70% of ‘Help me write’ users in Docs and Gmail accept Gemini’s suggestions. In Slides, 75% of users are using Gemini created images in their presentations.

Custom Silicon: Google announced two notable internally developed silicon improvements in addition to their support for the latest Nvidia and Intel processors. Those include Google’s new TPU v5p AI accelerator for training and inference with 4x the compute power of previous generations and their new Axion ARM-based CPU with 50% better performance and 60% better energy efficiency. As power-performance metrics come into stark view for customers, these improvements will become increasingly more important.

Developer Tools: Google continued improvements with their Google Cloud Studio and Vertex AI tools. Vertex AI Model Builder provides support for first party (Gemini), third-party and open-source AI models. The Vertex model garden currently has over 30 models to choose from. In addition, the new Vertex AI Model Builder now provides supervised tuning for Gemini models and allows grounding in Google Search. Grounding in Google Search is a significant improvement. Ethical use of AI is a core concern for customers and Google now offers 19 different filters today to ensure appropriate use of AI.

Agents: One of the more interesting announcements at Next was around Agents. Google’s Agents are much more functional than a chatbot and focused in six functional areas including Customer Agents, Employee Agents, Creative Agents, Data Agents, Code Agents, and Security Agents. For example, Mercedes Benz is using Customer Agents to enhance the customer experience. Agents have the ability for human-like conversations and interactions, can control and shape conversations, and can ground responses to improve quality. Similarly, one example showed how Employee Agents are grounded in a company’s compliance documents to ensure compliance. Models can also be grounded in third-party tools like SAP and Hubspot. Those are just two of many examples. In addition, customers can create their own agents using the Vertex AI Agent Builder. At Next, several enterprise Google Cloud customers spoke of how they are using agents to improve experiences.

Workspace: Google Workspace, with more than three million MAU (monthly active users) and more than 10 million paying customers is adding a new application to the Workspace offering with Google Vids. Vids is a new AI-powered video creation tool that provides the ability to quickly create video assets for work purposes. Vids will launch in Workspace Labs in June. In addition, Workspace is getting new AI powered capabilities to Meet/ Chat along with new a new AI security add-on. Each of these two add-ons are priced at $10/user/mo.

In addition to the major themes, there were several new announcements around Google Distributed Cloud, BigQuery, vector support, Chrome Enterprise Premium along with improvements in security and edge-to-cloud. New features in BigQuery include the ability to let the system determine resource requirements and is yet another example of how Google is moving up the stack to make already powerful tools more intelligent through automation.

Enterprises are looking for help with applying the latest innovations to solve real business problems, not just technology ones. Google’s shift to focus on business outcomes should garner significant attention from enterprise customers and prospects looking to connect the dots between the technology and solving business outcomes. For CIOs, the intersection of business and technology is critical. While many vendors leave the connection up to the customer to figure out, Google is starting work to connect those dots.

At a macro level, Google Cloud and Workspace is creating a platform for businesses to operate and build applications on top of. One example is the use of Agents as a toolset for customers to catapult their generative AI use in production workstreams. Even today, 66% of organizations still report that over 50% of their data is dark and inaccessible. From workplace productivity to bespoke applications that support customers and employees, Google appears to be trying to capitalize on connecting these worlds.

On a sustainability level, Google continues their penchant to drive further efficiency in their operations and ultimately to the value they provide customers. Internally, Google is already carbon neutral and on a path to run all of their data centers and campuses on carbon-free energy by 2030. In addition, Google is working to make their systems more efficient. For data centers, they have gone from producing 240kW to support 100kW data centers to a ratio closer to 104kW supporting 100kW. That is a significant improvement and much better than even the most efficiently run enterprise data centers. Externally, Google Cloud is already providing customers with a full perspective of their carbon utilization, and they are working to provide higher fidelity reporting. From a partner perspective, 75% of Google Cloud ready sustainability partners are exclusive to Google Cloud. These actions put Google in a solid position themselves and to help customers as new State and Federal climate-related reporting requirements are on the horizon starting in 2025.

In discussions with customers and Google executives, a couple of themes kept coming up that were required for success. First, customers with positive outcomes for significant initiatives had broad senior level support including executive teams and, in some cases, their board. Second, partners played a critical role in initiative success. While this is expected, one comment was surprising with one executive mentioning that the way partners were delivering projects was “more like ISPs”. If you’re familiar with how ISPs engage, it is typically over a longer and sometimes ongoing period. This could give significant pause to enterprises looking for a different outcome.

There are two markets open to Google Cloud including webscale and enterprise customers. Each of these have very different focus and requirements. In the hyperscale marketplace, enterprise market demand still sits largely untapped. That is not to suggest all roads end with public cloud. Enterprises have varying needs from edge to cloud. In addition, they need partners who truly appreciate, respect, and understand the enterprise requirements.

Google’s moves to bring business outcomes into the conversation along with support for a common platform approach should provide an interesting differentiation for Google in the eyes of customers.

Google Cloud sits in a solid third place behind both Amazon Web Services and Microsoft Azure. Google’s focus on business outcomes should start to open doors with enterprises that may have looked at Microsoft as the de facto enterprise public cloud solution. This stems from Microsoft’s long-standing existing relationships with enterprise customers. Google should also gain interest from AWS customers looking to move from developer tools to higher-functioning solutions like Gemini’s multi-modal capabilities, Agents and integration with productivity applications.

While Google sits in third place, they have the potential to move into second place and displace Microsoft through their differentiated technology decisions and enterprise focus. Displacing AWS, however, would be much harder as AWS already has a significant webscale install base and is also starting to move into higher-functioning solutions.

This year’s Next showed that Google has made a significant strategic turn with their focus on business outcomes. While Google has had a solid technology offering for many years, it was often a bridge too far for many enterprise customers to consume. 

Next showed that Google is continuing their leadership in clear and critical areas for enterprises including generative AI, data management, platforms, customer experience and workplace engagement.

While much of what was presented at Next was positive, as noted, it would have been good to see more emphasis on security and the creation of enterprise pathways.
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