Thomas Kurian, CEO of Google Cloud, says that his top priority is creating AI-powered solutions
Thomas Kurian, CEO of Google Cloud, says that his top priority is creating AI-powered solutions

Google Launches New Era in Cloud with AI-Powered Industry Solutions

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Emphasizing Google Cloud’s unique ability to offer new software solutions unlike anything the market has seen, CEO Thomas Kurian said last week that his #1 priority is to create a new breed of enterprise applications powered by ML and AI.

Kurian has mentioned these unique AI-powered solutions in the past—he discussed them at length in our exclusive video interview with him two months ago. But last week was the first time he specified that they occupy the #1 spot on Google Cloud’s ambitious set of priorities.

In staking out that position, Kurian emphasized that in developing and offering these entirely new solutions, Google Cloud will leverage a wide range of expertise from across the entire Google organization: ML, AI, big data, analytics, digital marketing and advertising, understanding consumer behavior, being able to predict consumer behavior, product discovery, and more.

Kurian also emphasized that Google Cloud has zero intention of developing traditional enterprise applications such as those used for CRM, HCM and ERP. Rather, Kurian said, this new wave of AI- and ML-powered solutions will extract data from those traditional “line-of-business” applications and then use advanced technologies and capabilities to optimize specific outcomes for complex industry-specific challenges.

Kurian Looks to Redefine Cloud

Unless I’ve missed it completely, no other major tech vendor has gone down this path, particularly at the scale Google Cloud is proposing.

In taking this approach, Kurian and Google Cloud are hammering away at the traditional constructs of what “cloud” is, of what it can do, and of what customers can and should expect from leading cloud vendors.

Kurian disclosed this top-priority status for these new industry-specific solutions at the Goldman Sachs investors conference last week in a conversation with lead tech analyst Heather Bellini. Asked by an audience member about Google Cloud’s intentions around SaaS, Kurian underscored his desire to avoid getting into the traditional enterprise-software categories and to instead create an entirely new one. He said:

When you look at our industry-specific solutions, a lot of investment has already gone into business-process automation: ERP, supply chain, logistics, etc.

We are not trying to replace those solutions; those business-process implementations take years, and there’s a lot of cost associated with going to a customer and telling them ‘Please rip out your supply chain.’

However, what we are doing is helping them, by using our data analytics and machine learning, extract data from these solutions and be much more intelligent in how these applications function.

Google Cloud Reimagines Macy’s Supply Chain

Among the many customer examples cited by Kurian—and I’ll mention a number of those—was Macy’s, which Kurian said needed to optimize its supply chain. Macy’s had been told by various ERP vendors that such an optimization would be “a long process because they’d have to re-implement their entire ERP system.”

The problem, Kurian said, was that Macy’s needed to have a digital-era supply chain powered by ML and AI. But the company was stuck with traditional applications running on mechanistic “rules rather than based on AI models.”

Rather than requiring that Macy’s undergo that massive, expensive and time-consuming ERP overhaul, Google Cloud “helped them keep their existing supply-chain application, extract their data from it, use our Machine Learning and AI platform and our analytics platform, and optimize their distribution center,” Kurian said.

“We were able to do it with their first distribution center between June and August last year—a much shorter time-window but delivering extremely high value for them because it helped them optimize a big cost-item.”

That was a theme that Kurian hit on multiple times during his presentation and Q&A at the conference. Here are some other excerpts from his comments that reveal this unique and, in my estimation, highly disruptive move by Google Cloud.

UPS: Optimizing Scheduling.

“UPS came to us with a problem a year ago. When trucks break down, it was taking a long time to reschedule the fleet—multiple hours. They wanted a solution to reschedule the delivery vehicles. They were able to reduce that time from 7 hours to a few minutes, saving many, many dollars in terms of cost-efficiency and obviously improving customer satisfaction because packages get delivered on time.”

Uniqlo: Inventory Management and Optimization.

“Uniqlo wanted to optimize its inventory because in the past, people went to the store to buy a product. Now they order at home and want to pick up in the store; they order at the store and want it delivered at home; and so inventory has become much more fluid. The cost of inventory is very high, and they wanted an algorithm to optimize demand-forecasting and what we call ‘buy optimization.’

“They worked with us to optimize that. Frankly speaking, for most retailers inventory-optimization is a huge issue, and with the emergence of e-commerce is becoming more complicated. Helping them with that problem allows us to engage many retailers with a highly differentiated value proposition.”

That theme of “highly differentiated” will come up again and again, as you’ll see.

Lufthansa: Scheduling Optimization.

“Recently we announced a partnership with Lufthansa. (For more on that, please see Google Cloud Intensifies Battles Against Microsoft, Amazon with 4 Key Moves.) Lufthansa wants to keep its planes flying and on-time, and the biggest issue affecting the ability to keep the planes in the air and on time is how they schedule logistics for maintenance and crews when they come into the airport. They use our technology for optimization to solve this problem.”

Retail: Product Discovery.

“In retail, we obviously understand a lot, based on our search expertise, about how people discover products. Many retailers are working with us to improve product-discovery because of our expertise in search. They would love to have the ability to take the inventory that happens to be in the store and make it available to everybody so they can see what’s available in the corner store rather than having to go online.” 

Media: the Rise of Streaming.

“If you look at a lot of media companies that are moving to streaming, the fact that we’ve built the infrastructure for YouTube allows us to differentiate the kind of capability we offer media companies. Activision Blizzard looked at all of the [cloud] providers and decided they wanted advanced capability in the network.”

 

This focus on industry-specific solutions allows Google Cloud to sell primarily to lines-of-business executives as well as to the CIO, expanding the reach Kurian’s sales teams can make within large organizations. Kurian spoke about this specifically:

Because we’re selling to the lines of business, we’ve also introduced a set of solutions that business users can use to collaborate with one another to build APIs, for example; to do analytics; and to build low-code applications. This allows us not just to sell outside of IT to business audiences, but it also gives people the ability to build large numbers of applications on our platform, thereby making our platform more sticky. 

Our differentiators in this segment largely come to the unique capability Google has in understanding consumers, understanding buying-behavior, and also optimizing AI.

Closing Thoughts

I want to close by calling out two other key points. First, that a parallel effort for Google Cloud is the massive buildout of its direct-sales team as well as its partner ecosystem. Kurian said the focus on ML-powered super-apps helps partners and potential partners build trust in their new relationship with Google Cloud.

“We’ve been very clear with the partners that we’re a software and solutions company—we’re not a services company,” Kurian said.

And finally, Kurian emphasized that because the cloud industry has changed, is changing, and will continue to change at a blistering pace, it’s wise to look at the market as it is becoming, rather than as it is.

“Today, where people want cloud to be is not about [infrastructure and packaged apps]. It’s really about, ‘can you give me new capabilities that I could not get before?’ So, we’re very focused on executing our plan. Lateness, earliness, I don’t worry about that,” Kurian said.

“We don’t get distracted by anybody telling us about where we are in the market. We’re focused on executing. When we win customers, they say what we’re offering is truly unique.

“And we don’t think that the way cloud and the market looks 3 years out will be the way it does today.”

Disclosure: at the time of this writing, Google Cloud was among the numerous clients of Evans Strategic Communications LLC and Cloud Wars Media LLC.

 

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