Google enters the Cloud, Acquires Bebop Technologies

Google Inc., now a unit of Alphabet Inc., is acquiring Bebop Technologies – a cloud enterprise applications company. This is Google’s attempt to consolidate all cloud-related businesses under one roof, led by Bebop Technologies’ Diane Greene.

Bebop Technologies helps build and maintain enterprise applications for the cloud. Greene, VMWare co-founder and cloud veteran, will place her 39-member Bebop team in Google to take command of Google’s cloud-computing businesses including Google Apps, Cloud Platform and Google for Work. VMWare is a pioneer of virtualization technology, allowing companies to handle high-end computing tasks across data centers. Greene is also on the board of directors of Alphabet Inc.

As more companies enter the cloud space, Google CEO Sundar Pichai is placing more importance in cloud enterprise applications. "Only a tiny fraction of the world’s data is currently in the cloud — most businesses and applications aren’t cloud-based yet. Every businesses in the world is going to run on cloud eventually." Pichai said. “Cloud computing is revolutionizing the way people live and work, and there is no better person to lead this important area. This is an important and fast-growing area for Google, and we’re investing in the future."

Facing competition from Amazon, Microsoft and IBM, Google intends to become “a cloud company by 2020”, according to Urs Hölzle, Senior VP of Infrastructure at Google. He also stated that the company’s cloud revenues could surpass advertising revenues generated online by 2020. As of now, Advertising generates more than 90% of Alphabet’s revenue.

Although having one of the world’s largest data center networks, Google has a relatively-low 6% market share in the cloud computing and storage market when compared with other companies in the same domain. Amazon generated $2.1 billion in revenues and $521 million in profit during its last quarter, growing at over 78% YOY, an increase of 432% in profit over the same quarter last year. Microsoft CEO Satya Nadella is focusing efforts on software and cloud services in a bid to counter declining PC sales, while IBM is shifting business strategy tailored towards the cloud. Oracle is relying on the cloud to increase revenue and improve processes in different industries, such as SCM, using the cloud.

Google’s appointment of Ms. Greene gives the impression that Google is taking the cloud very seriously. Urs Hölzle remains as head of the Google Cloud Platform, while Amit Singh retains his title of President of Google for Work. Both report to Greene. Greene, having been a director at Google for 3 years, will remain a director, stepping down from the audit committee in the process.