|To: Sam who wrote (1482)||10/9/2018 10:03:43 AM|
|From: Glenn Petersen|
|Google Drops Out of Pentagon's $10 Billion Cloud Competition|
By Naomi Nix
October , 2018
-- Company says cloud deal may clash with its values on AI
-- Google also criticizes plan to pick a single winner among bids
Alphabet Inc.’s Google has decided not to compete for the Pentagon’s cloud-computing contract valued at as much as $10 billion, saying the project may conflict with its corporate values.
The project, known as the Joint Enterprise Defense Infrastructure cloud, or JEDI, involves transitioning massive amounts of Defense Department data to a commercially operated cloud system. Companies are due to submit bids for the contract, which could last as long as 10 years, on Oct. 12th.
Google’s announcement on Monday came just months after the company decided not to renew its contract with a Pentagon artificial intelligence program, after extensive protests from employees of the internet giant about working with the military. The company then released a set of principles designed to evaluate what kind of artificial intelligence projects it would pursue.
“We are not bidding on the JEDI contract because first, we couldn’t be assured that it would align with our AI Principles," a Google spokesman said in a statement. "And second, we determined that there were portions of the contract that were out of scope with our current government certifications.”
The spokesman added that Google is “working to support the U.S. government with our cloud in many ways.”
The Tech Workers Coalition, which advocates for giving employees a say in technology company decisions, said in a statement that Google’s decision to withdraw from the cloud competition stemmed from “sustained” pressure from tech workers who “have significant power, and are increasingly willing to use it.”
Google is behind other technology companies such as Amazon.com Inc. and Microsoft Corp. in obtaining government cloud-security authorizations that depend on the sensitivity of data a service is hosting.
The JEDI contract attracted widespread interest from technology companies struggling to catch up with Amazon in the burgeoning federal government market for cloud services. Final requirements for the project were released in July after a months-long lobbying campaign in Washington by tech companies including Microsoft, International Business Machines Corp. and Oracle Corp. that opposed the Pentagon’s plans to choose just one winner for the project instead of splitting the contract among a number of providers.
“Had the JEDI contract been open to multiple vendors, we would have submitted a compelling solution for portions of it,” the Google spokesman said. “Google Cloud believes that a multi-cloud approach is in the best interest of government agencies, because it allows them to choose the right cloud for the right workload.”
In a report to Congress, the Defense Department said making multiple awards under current acquisition law would be a slow process that “could prevent DoD from rapidly delivering new capabilities and improved effectiveness to the warfighter that enterprise-level cloud computing can enable.”
The department also said it expects “to maintain contracts with numerous cloud providers to access specialized capabilities not available under the JEDI Cloud contract.”
— With assistance by Ben Brody, and Josh Eidelson
(Updates with advocacy group’s comment in sixth paragraph.)
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|From: FUBHO||10/18/2018 7:53:21 PM|
|WikiLeaks Publishes What It Says Is a List of Amazon Data Centers|
WikiLeaks published what it said was a list of all Amazon Web Services data centers, including their addresses
• If accurate, the list would be the most detail the public has ever seen about the world’s biggest cloud provider’s infrastructure • The leak’s purpose is unclear, but the organization mentioned the $10 billion Department of Defense cloud contract, for which AWS is currently a leading bidder • In 2010, AWS pulled the plug on the hosting services it was providing to WikiLeaks, citing terms-of-use violations
WikiLeaks has published a document it says lists all Amazon Web Services data centers and their addresses.
It’s unclear how accurate the information in the document is. It lists data centers by code name, addresses, and in many cases names of the colocation providers operating the facilities. According to the document, the data is recent as of October 2015. Amazon has launched more data centers since then.
It lists 38 buildings in Northern Virginia; eight in Seattle; eight in the San Francisco Bay Area; seven in northeastern Oregon; seven in Dublin, Ireland; three in Luxembourg; four in Germany; nine in China; 12 in Japan; six in Singapore; eight in Australia; and six in Brazil.
An AWS spokesperson did not respond to a request for comment in time for publication.
If the information in the document is real, it would be the most detail about AWS data centers ever released to the public. Unless they're data center providers, companies are usually extremely secretive about their data center locations,
and AWS is more secretive than most others.
The world’s biggest cloud provider only makes public geographic regions where its server farms are located, but never the specific cities, let alone street addresses. Its biggest competitors, the likes of Microsoft Azure, IBM, and Google Cloud, practice the same.
It’s unclear what WikiLeaks is trying to accomplish by making the information public. Its press release announcing the leak mentions AWS’s work for US intelligence agencies and its leading position in the race to secure a $10 billion cloud services contract the Department of Defense is currently shopping around.
In 2010, AWS pulled the plug on hosting services it had been providing to WikiLeaks, causing the organization to switch providers. The move was viewed as a reaction to US government pressure on Amazon to stop providing services to WikiLeaks because it published classified documents, which the company denied.
AWS said it had closed the account because WikiLeaks had violated its terms of service, which prohibit customers from hosting content they don’t own or otherwise control the rights to. Amazon also argued that the hundreds of thousands of classified documents WikiLeaks had published could not have been redacted in a way that guaranteed the information wouldn’t “put innocent people in jeopardy.”
From the AWS statement at the time:
We’ve been running AWS for over four years and have hundreds of thousands of customers storing all kinds of data on AWS. Some of this data is controversial, and that’s perfectly fine. But, when companies or people go about securing and storing large quantities of data that isn’t rightfully theirs, and publishing this data without ensuring it won’t injure others, it’s a violation of our terms of service, and folks need to go operate elsewhere.
WikiLeaks fired back on Twitter, saying if Amazon was “so uncomfortable with the first amendment, they should get out of the business of selling books.”
It’s possible that with its data center leak WikiLeaks is trying to influence the DoD’s decision about which vendor to hand the big cloud contract to. It published the document one day before the current October 12 deadline for vendors to submit formal proposals for the contract and pointed out the date in its announcement.
It also pointed out that other cloud providers, namely IBM and Oracle, have complained about the proposal requirements allegedly favoring Amazon.
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|From: Glenn Petersen||10/25/2018 11:08:58 PM|
|Amazon says AWS revenue jumped 46 percent in third quarter|
Jordan Novet | @jordannovet
- Amazon's cloud business grew 46 percent in the third quarter.
- AWS' $2.1 billion in operating profit accounted for 56 percent of total operating earnings.
Published 6 Hours Ago Updated 4 Hours Ago CNBC.
Here's what three pros think about Amazon's earnings 4 Hours Ago | 01:32
Amazon's cloud computing business grew 46 percent in the third quarter, trailing analysts' estimates.
Amazon Web Services generated revenue of $6.68 billion in the quarter, compared with the average estimate of $6.71 billion, according to analysts polled by FactSet. AWS accounted for 12 percent of Amazon's total revenue. It's the world's biggest provider of public cloud infrastructure, well ahead of Microsoft, Alphabet and others.
While Amazon has a number of growth drivers in its core retail business and from Alexa-powered devices, AWS gives the company software margins and a level of profitability that it can't find anywhere else. AWS reported operating income of $2.1 billion for the quarter, above the $1.82 billion FactSet consensus estimate. AWS delivered 56 percent of Amazon's total operating income.
The AWS business enjoyed a 31 percent operating margin in the third quarter -- the highest it's been in more than four years.
The company continues to add features at a rapid pace while also slashing prices, as more large businesses move to the cloud. In the third quarter, AWS announced a price cut for its Lightsail virtual private server offering and introduced a new computing offering called T3, which the company says offers a 30 percent improvement in price to performance over its predecessor. Amazon also said HubSpot chose AWS as its preferred public cloud provider.
Revenue growth is down sequentially from the second quarter, when AWS reported 49 percent growth. On Wednesday Microsoft said its Azure cloud grew 76 percent year over year. Alphabet also reported results on Thursday. On February's earnings call, Google CEO Sundar Pichai said he and fellow executives believed the Google Cloud Platform was "the fastest-growing major public cloud provider in the world" based on publicly available data for 2017.
In a note distributed to clients on Friday, Stifel analysts led by Scott Devitt estimated AWS would generate $50 billion in revenue in 2020.
Amazon shares fell more than 6 percent in extended trading Thursday after the company's revenue and fourth-quarter outlook fell short of expectations.
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|From: Glenn Petersen||10/28/2018 8:53:30 PM|
|IBM to acquire Red Hat in deal valued at $34 billion|
Alex Sherman | Lora Kolodny
- IBM announced plans to acquire Red Hat in a deal valued at about $34 billion.
- Prior to the acquisition, Red Hat's market capitalization stood at approximately $20.5 billion.
- The acquisition is by far IBM's largest deal ever, and the third-biggest in the history of U.S. tech.
Published 6 Hours Ago Updated 18 Mins Ago CNBC.com
IBM Chairman, President and CEO Ginni Rometty arrives for her keynote address at CES 2016 January 6, 2016 in Las Vegas.
IBM is acquiring Red Hat, a major distributor of open-source software and technology, in a deal valued around $34 billion, the companies announced on Sunday.
According to a joint statement, IBM will pay cash to buy all shares in Red Hat at $190 each. Shares in Red Hat closed at $116.68 on Friday before the deal was announced.
The open source, enterprise software maker will become a unit of IBM's Hybrid Cloud division, with Red Hat CEO Jim Whitehurst joining IBM's senior management team and reporting to CEO Ginni Rometty.
Goldman Sachs, J.P. Morgan and Lazard advised IBM on the Red Hat deal. Morgan Stanley and Guggenheim advised Red Hat.
The acquisition is by far IBM's largest deal ever, and the third-biggest in the history of U.S. tech. Excluding the AOL-Time Warner merger, the only larger deals were the $67 billion merger between Dell and EMC in 2016 and JDS Uniphase's $41 billion acquisition of optical-component supplier SDL in 2000, just as the dot-com bubble was bursting.
Red Hat started 25 years ago as a distributor of a particular flavor of Linux, an open-source operating system that is commonly used in server computers that power company data centers. Today, Red Hat is known for distributing and supporting Red Hat Enterprise Linux, as well as other technologies commonly used in data centers. The company, which went public at the peak of the dot-com boom in 1999, earned $259 million on revenue of $2.92 billion in its last fiscal year, which ended Feb. 28. Its revenue grew 21% between the 2017 and 2018 fiscal years.
Rometty told CNBC that the deal should not be interpreted as part of any plan for her to transition out of her position as CEO at IBM.
"I'm still young and I'm not going anywhere," she told CNBC.
IBM will pause share repurchases in 2020 and 2021, but won't touch its dividend. The pause is a cautionary measure as the company plans on returning to its normal leverage ratio in about two years.
Open source has been the biggest theme in technology this year. Prior to IBM's purchase of Red Hat, two of the biggest tech deals of the year were Microsoft's $7.5 billion purchase of GitHub, a code-sharing service, and Salesforce's $6.5 billion acquisition of MuleSoft, whose technology stitches together disparate software applications, data and devices. Earlier this month, big-data rivals Cloudera and Hortonworks agreed to merge in a $5.2 billion deal.
Both Rometty and Whitehurst, in comments to CNBC, agreed that Microsoft's purchase of GitHub was "irrelevant" to IBM and Red Hat's decision to enter into a deal.
While Red Hat has talked for years about potentially selling itself to other companies, including Google, never has anything gotten nearly as serious as the negotiations with IBM, according to people familiar with the matter.
"We were not looking to do something," Whitehurst told CNBC.
IBM reported lighter-than-expected revenue in its most recent earnings update, and its revenues shrank from the previous year after three quarters of growth. Prior to that brief growth period, the company's revenues had been slowly declining for about five years.
The company has been working to catch up to Amazon and Microsoft in the cloud infrastructure business.
Cloud is one of IBM's four key strategic imperatives, or growth drivers -- the others are social, mobile and analytics -- and in the quarter, IBM announced cloud deals with Economical Insurance, ExxonMobil and Novis.
IBM and Red Hat said the deal would enable businesses to do even more work in the cloud, keeping their apps and data portable and secure, no matter which cloud or hybrid technologies they adopt.
--CNBC's David Faber , Ari Levy and Jordan Novet contributed to this report.
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|From: Glenn Petersen||11/18/2018 4:35:24 PM|
|The deal is make or break for IBM and a maker or breaker for Rometty. She said Sunday the deal will make IBM the “No. 1 hybrid cloud provider,” referring to the market for renting clients online computing services in both “public” and “private” varieties.|
Data Sheet—IBM's Make or Break Deal for Red Hat
By Aaron Pressman and Adam Lashinsky
October 30, 2018
This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
IBM made a big move Sunday evening by buying Red Hat for $34 billion. This was the second consecutive business day of great news for North Carolina technology companies, the previous jolt being the new investment in Fortnite maker Epic Games.
That’s about where the good news ends.
Investors hated the all-cash deal, which will force IBM to suspend share re-purchases, increase its debt, and leave the company unable to make other big acquisitions should enterprise software prices ease in coming years. IBM’s shares fell 4%, deepening their embarrassingly negative 7-year run, almost to the day, of the Ginni Rometty era. Even more telling, Red Hat’s shares ended the day near $170, 12% below the $190 per share IBM promised to pay. This means investors are skeptical the deal will happen at this inflated price. (The companies announced IBM will pay Red Hat nearly $1 billion if the deal falls through.)
The deal is make or break for IBM and a maker or breaker for Rometty. She said Sunday the deal will make IBM the “No. 1 hybrid cloud provider,” referring to the market for renting clients online computing services in both “public” and “private” varieties.
Almost no one believes that will happen.
Amazon, Microsoft, and Google dominate cloud computing, with Microsoft having begun to invest years ago in the “hybrid” concept. In fact, Satya Nadella ran Microsoft’s Azure business that pursued the hybrid strategy when he was promoted to CEO. IBM, by contrast, is a pipsqueak in the business, and adding open-source services provider Red Hat won’t meaningfully change that.
The problem is that IBM is late to the game. One longtime enterprise software analyst told me Monday buying Red Hat “only helps the ice cube melt more slowly.” Stratechery’s Ben Thompson called IBM’s previous “commitment to the cloud … an accounting fiction derived from re-classifying existing businesses.” (His takedown of the deal is worth the read to understand IBM strategic quandary.) Breakingviews, which slammed IBM for “overpaying for relevance,” walks through why it is unlikely the deal with ever pencil out financially.
IBM had to do something, of course. Its existing businesses aren’t growing, and even its much-hyped Watson artificial intelligence unit has failed to ignite. Slow growth, flashy marketing that doesn’t deliver, and giant acquisitions. Sound a lot like another stalled icon: GE.
The chances this elephant will dance again aren’t good.
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|From: Glenn Petersen||11/24/2018 11:06:36 AM|
|Google's cloud business under Greene was plagued by internal clashes, missed acquisitions, insiders say|
- Google poured resources into its cloud unit during Diane Greene's three-year run at the helm, but the company has still struggled against Amazon and Microsoft.
- Greene clashed with Google CEO Sundar Pichai over a big cloud contract with the Department of Defense.
- Thomas Kurian, a former Oracle executive, has been named as Greene's successor.
Jordan Novet | Jillian D'Onfro
Published 9:14 AM ET Wed, 21 Nov 2018 Updated 3:11 PM ET Wed, 21 Nov 2018 CNBC.com
Tony Avelar | Bloomberg | Getty Images
When Google CEO Sundar Pichai handed Diane Greene the keys to the company's fledgling cloud business three years ago, it was supposed to mark the internet company's arrival into enterprise computing.
For years, Google had struggled to get out of its own way in business software, hamstrung by a developer-centric culture that prioritized automation and fast, easy-to-use products over communication with business buyers and users. The huge profit margins in the online advertising business made it hard to justify loading up on expensive salespeople and marketing campaigns.
So while Google was dithering alongside a large group of also-rans, Amazon Web Services was running away with cloud computing. Microsoft deftly moved into second place by pivoting its traditional software licensing business to a subscription-based cloud-first model.
Greene was meant to change all that. She brought with her serious enterprise credentials as the co-founder and first CEO of VMware. In some sense, VMware helped kick off the cloud revolution by pioneering a technology called "virtualization," which allowed the operators of data centers to squeeze more functionality out of the server hardware they bought and maintained. Salesforce CEO Marc Benioff has said "there's no more successful female executive in Silicon Valley" than Greene.
Pichai wrote in his introductory blog post in November 2015 that "Diane needs no introduction." She would get her own dedicated sales team, pulling cloud software sales out from under the control of the core advertising business.
On Friday, that plan came to an abrupt halt when Greene announced that she will leave her post in January. Greene will be replaced by Thomas Kurian, who recently left a top executive role at Oracle, where he spent 22 years.
During Greene's tenure, Google increased its annual capital expenditures from $10 billion to over $13 billion, and went on a hiring spree — the cloud group has added more people than any other at Alphabet over the last two years. It got some key customer wins and built out several important functions for selling to enterprises, including professional services, training and marketing.
Despite all that, Google continues to struggle. People who follow the industry say it's a two-horse race between Amazon and Microsoft, with Google failing to keep pace in a cloud infrastructure market that Gartner expects to grow to $39.5 billion next year from $31 billion in 2018. In terms of market share, Google has yet to crack double digits.
"They figured out and monetized search like nobody probably ever will, but I don't think they care about the enterprise," said Tom Siebel, the co-founder of software company Siebel Systems, which Oracle acquired for almost $6 billion in 2006. Siebel, who has known Greene for about 15 years and is now CEO of cloud software company C3, said that when it comes to helping big businesses solve their infrastructure problems, "Google is just not a factor."
Greene put a positive spin on last week's announcement, saying that she was among the Google employees to interview Kurian for the job, along with Pichai and Urs Hoelzle, Google's eighth employee, who serves as senior vice president of technical infrastructure.
Greene also said that when she took the position in 2015, she told family and friends that it would be for only two years.
Clash of leaders
One big challenge for Google's cloud business has been an unclear direction, highlighted by tension between Pichai and Greene, according to former employees and other people with knowledge of their relationship who asked not to be named because of the sensitivity of the topic.
It's been particularly awkward because both executives are also on Alphabet's board. Greene has been a director since 2012, three years before Google acquired her software company, Bebop, and installed her to lead the cloud business. Pichai, a 14-year Google veteran, didn't join Alphabet's board until 2017.
Two former employees described a recent disagreement between the two over a controversial contract with the Department of Defense, dubbed Project Maven. After employees and outsiders called on Google Cloud Platform to cancel the contract, Pichai wanted to listen to the protestors, the people said.
Greene initially resisted these calls, however, as the project was both a lucrative deal and an important on-ramp to future government work, regardless of its effect on Google's reputation or employee morale.
CNBC requested comment from Greene, but Google didn't grant access. Google declined to provide a statement beyond Greene's blog post announcing her departure.
Eventually, the company decided not to renew the contract. Google then established "ethical principles" for the use of artificial intelligence, which forbids Google from developing AI for use in weapons but allows the company to pursue military contracts in other areas such as "cybersecurity, training, military recruitment, veterans' healthcare, and search and rescue." Greene and Pichai were in tight agreement when it came to the drafting of these principles, a person familiar with the process says.
Greene also provoked opposition as the cloud sales strategy evolved.
Tariq Shaukat, president of partner and industry platforms in the cloud business, told CNBC that representatives under Greene have increasingly been joining other Google teams, like advertising and maps, in potential customer conversations. "We're finding a lot of demand from customers and success with going in as one Google team," he said.
However, Greene's efforts to make other Google business partnerships contingent on some kind of business with the cloud unit frustrated other department chiefs, people briefed on those discussions told The Information.
Drew Angerer / Getty Images
Google's lack of big deals has puzzled analysts given how aggressive the major software vendors have been at opening their wallets to win in the cloud. In two of the year's biggest deals — IBM's $34 billion purchase of Red Hat and Microsoft's $7.5 billion acquisition of GitHub — Google was involved in talks but ultimately came up short, according to people familiar with the matter.
Greene wanted to buy GitHub but Pichai was less enthusiastic, unclear why Google would spend big money to get into the market for developer tools, said a person close to the business. Google's bid for GitHub, whose cloud software lets programmers collaborate and share code, came in at just under $6 billion, and it declined to raise the price after being told of Microsoft's offer, the person said.
Some people in the cloud group pushed for Google to pursue MuleSoft, which was acquired by Salesforce for $6.5 billion in March, but Greene wasn't interested, the person said. MuleSoft's software helps connect applications that are on disparate platforms. Google already owns Apigee, a MuleSoft competitor, which it purchased in 2016.
Red Hat and GitHub would have brought in large open-source communities that could have helped evangelize Google's cloud platform to developers inside companies, potentially leading to more adoption.
But they wouldn't have solved a deeper problem — how to start selling like an enterprise software vendor.
"Google just needs to buy a company that gives them a really good start building a global enterprise capability," said Frank Slootman, former CEO of cloud software company ServiceNow and Data Domain, which he sold to EMC.
Google is an engineering machine. It's the world's best-capitalized research lab, loaded up with Ph.D.s in artificial intelligence who are developing the technology that will define the future. People who aren't software engineers, including those in sales, can often feel like second-class citizens, according to former employees.
At the time Greene joined, Google had little infrastructure for selling into businesses, and that function was controlled by the advertising unit. Numerous people who have dealt with Google's cloud salespeople over the last couple years told CNBC that while AWS and Microsoft are geared toward serving customers and responding quickly to their requests, Google touts its own technology, selling what it thinks clients need.
Two former Google employees said that Greene was in a tenuous spot because, among Alphabet's top brass, there's little understanding for what it's like to sell to large businesses. Another ex-employee said one reason they left was because of Google's disconnect with customers.
David Paul Morris | Bloomberg | Getty Images
One person who might have helped figure out what enterprises need was Diane Bryant, who joined as Google's operating chief from Intel's data center business in November 2017. Bryant spent 13 years at Intel and has a broad set of skills across finance, technology and cybersecurity. She was often discussed as CEO material. Bryant did not respond to requests for comment.
But Greene, who is considered a product visionary, has a reputation of being hard to work with dating back to her days at VMware, multiple people said. Jerry Chen, an investor at Greylock Partners who worked for Greene at VMware, said that his former boss "pushed her team to think bigger," and that while she challenged him, he became a better executive for it.
At Google, Greene and Bryant clashed almost from the beginning, according to people with knowledge of the matter. Bryant ended up with the limited roles of running support and information technology, two people said, and lasted only seven months at the company.
Winning some Amazon customers
Still, Google made progress under Greene, winning at least pieces of the public cloud business from numerous companies, including Apple, PayPal, Etsy, Evernote, Fitbit, HubSpot, Shopify, Twitter and Zendesk.
"We went from people not even knowing that this was an area where Google had an offering, to essentially now, every time that people talk about cloud, they talk about the big three," said Alison Wagonfeld, Google Cloud's marketing chief.
Google is playing squarely into the emerging multicloud theme, vying to provide services to companies that don't want to be wed to a single provider. For example, Google has won business from some Amazon cloud customers, like Salesforce and The New York Times.
Benioff told CNBC that "Google is now an enterprise player, there's no doubt about that." He attributes that position to Greene and said that while Google needs to ramp up its hiring in sales to catch up with its rivals, "in many accounts, they've shown up extremely competitively."
But frequently you'll hear stories like the one told by Workday's David Clarke.
In 2016, months into Greene's tenure, the finance and human resources software vendor considered Google when it was picking out a preferred public cloud. But it passed and chose AWS instead. At the time, Google was in the early stages of commercializing its cloud, said Clarke, Workday's senior vice president of technology and infrastructure.
"They hadn't thought through all the operational, economic and practical requirements that companies, especially bigger companies, would have," Clarke said in an interview. He said that Google has improved since then and if he were making the decision today it would be "a close call."
Autodesk, which has used Amazon's cloud for years, turned to the Google cloud for one initiative in 2016. But the company stuck with Amazon for primary workloads, a person familiar with the matter said. And Zendesk announced an application-development platform last week but chose to launch it on AWS.
"If you analyze the depth of their [Google's] stack globally, for example, it's leaner than AWS can offer," said Mikkel Svane, Zendesk's CEO. "That's one example of where they [AWS] stand out."
In 2017, Google held just 3.3 percent of the overall worldwide cloud infrastructure market, according to Gartner Research. While Google picked up share from the prior year, it was still behind way behind AWS and Microsoft and trailed Alibaba.
David Paul Morris | Bloomberg | Getty Images
It doesn't help that Google has become less transparent of late about the size of its cloud business. In February, the company said that between Google Cloud Platform and the G Suite bundle of productivity apps for businesses, it was generating more than $1 billion in revenue per quarter. But since then — nothing.
Kurian's hire is a clear sign that Google still recognizes the importance of capturing big dollars from enterprises as they move from traditional data centers to the cloud, and that it still has a compelling story to tell about how businesses can take advantage of Google's sophisticated technology.
There are big retailers and other large businesses that would rather not funnel more money to Amazon, leaving Google to compete with Microsoft for the bulk of those workloads.
In a note to clients on Sunday, Deutsche Bank analysts estimated that the Google Cloud Platform and G Suite will pick up $9 billion in revenue this year, up 30 percent from last year. Another former employee with knowledge of the business painted a less rosy picture, estimating that the full cloud business will book nearly $7 billion this year.
Regardless, as Greene said in February at a Goldman Sachs event, "It's pretty clearly early days."
— CNBC's Ari Levy and Alex Sherman contributed to this report.
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|From: Glenn Petersen||12/12/2018 4:53:51 PM|
|Oracle is suing the U.S. government over $10B Pentagon JEDI cloud contract process|
Ron Miller @ron_miller
December 19, 2018
Oracle filed suit in federal court last week alleging yet again that the decade-long $10 billion Pentagon JEDI contract with its single-vendor award is unfair and illegal. The complaint, which has been sealed at Oracle’s request, is available in the public record with redactions.
If all of this sounds familiar, it’s because it’s the same argument the company used when it filed a similar complaint with the Government Accountability Office (GAO) last August. The GAO ruled against Oracle last month stating, “…the Defense Department’s decision to pursue a single-award approach to obtain these cloud services is consistent with applicable statutes (and regulations) because the agency reasonably determined that a single-award approach is in the government’s best interests for various reasons, including national security concerns, as the statute allows.”
That hasn’t stopped Oracle from trying one more time, this time filing suit in the United States Court of Federal Claims this week, alleging pretty much the same thing it did with the GAO, that the process was unfair and violated federal procurement law.
Oracle Senior Vice President, Ken Glueck reiterated this point in a statement to TechCrunch. “The technology industry is innovating around next generation cloud at an unprecedented pace and JEDI as currently envisioned virtually assures DoD will be locked into legacy cloud for a decade or more. The single-award approach is contrary to well established procurement requirements and is out of sync with industry’s multi-cloud strategy, which promotes constant competition, fosters rapid innovation and lowers prices,” he said echoing the language in the complaint.
The JEDI contract process is about determining the cloud strategy for the Department of Defense for the next decade, but it’s important to point out that even though it is framed as a 10 year contract, it has been designed with several opt out points for DOD with an initial two year option, two three year options and a final two year option, leaving open the possibility it might never go the full 10 years.
Oracle has complained for months that it believes the contract has been written to favor the industry leader, Amazon Web Services. Company co-CEO Safra Catz even complained directly to the president in April, before the RFP process even started. IBM filed a similar protest in October citing many of the same arguments. Oracle’s federal court complaint filing cites the IBM complaint and language from other bidders including Google (which has since withdrawn from the process) and Microsoft that supports their point that a multi-vendor solution would make more sense.
The Department of Justice, which represents the US government in the complaint, declined to comment.
The DOD also indicated it wouldn’t comment on pending litigation, but in September spokesperson Heather Babb told TechCrunch that the contract RFP was not written to favor any vendor in advance. “The JEDI Cloud final RFP reflects the unique and critical needs of DOD, employing the best practices of competitive pricing and security. No vendors have been pre-selected,” she said at the time.
That hasn’t stopped Oracle from continually complaining about the process to whoever would listen. This time they have literally made a federal case out of it. The lawsuit is only the latest move by the company. It’s worth pointing out that the RFP process closed in October and a winner won’t be chosen until April. In other words, they appear to be assuming they will lose before the vendor selection process is even completed.
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