The company also acquires enterprise app developer Bebop as part of effort to bolster its business cloud offerings.
Google has combined its Google for Work, Cloud Platform, Google Apps and other enterprise cloud businesses into an integrated unit headed by Diane Greene, founder and former CEO of VMware.
The company has also acquired Bebop, an enterprise software development firm founded by Greene that was operating in stealth mode prior to Google's purchase.
Google CEO Sundar Pichai described the moves as an effort to better position the company in the market for enterprise cloud services. "This new business will bring together product, engineering, marketing and sales and allow us to operate in a much more integrated, coordinated fashion," Pichai said in a blog.
Pichai said the Bebop purchase will give Google access to a new development platform for building and maintaining enterprise cloud applications. Google will leverage Bebop's capabilities to deliver integrated cloud products for everything from end-user products such as Android and Chromebooks to products for running infrastructure and services in Google Cloud Platform and for developer frameworks for enterprise and mobile users.
"We think this will help many more businesses find great applications, and reap the benefits of cloud computing," Pichai said. According to him, more than 60 percent of Fortune 500 firms already use at least one paid Google for Work product, but there is still plenty of opportunity for growth. "This is an important and fast-growing area for Google and we're investing for the future."
Greene has been a member on Google's board of directors for the past three years and will remain one in her new role.
She is the second senior executive with extensive enterprise experience that Google has hired in recent months. Earlier this year, the company snagged Aiaz Kazi, former senior vice president of product and innovation platform strategy and innovation at SAP. Kazi is currently
part of a team tasked with increasing developer adoption of the Google for Work platform and apps.
Charles King, principal analyst at Pund-IT, said Google's decision to create an organization with a comprehensive suite of solutions and services for enterprise customers is a wise one.
"[It] indicates a reasonable shift in strategy to account for competitors' activities, especially Microsoft's success with Office 365," he said. "Simply going head to head with Microsoft in productivity is looking considerably less viable today for Google than it might have a year or two ago."
By choosing Greene to head the new group, Google has tapped an executive with considerable experience dealing with large enterprise customers, King said.
"During Greene's tenure at VMware, the company was almost entirely focused on enterprise-class solutions and customers, so Green likely knows and has worked with many of the businesses that Google would like to engage," he said. "Overall, this looks like a viable and potentially valuable effort for Google to pursue."
R "Ray" Wang, principal analyst at founder of Constellation Research, said that Greene brings the enterprise software cred that Google has been lacking. "Google has done a great job with the youth market and education, but the revenue growth has to come from the enterprise," he said. Google's choice of executives like Kazi and Greene shows the company is willing to invest in the right changes, Wang noted.