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    CIO Survey Holds Mixed News for Google Cloud Platform

    By
    Jaikumar Vijayan
    -
    January 8, 2015
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      A new report from investment bank and asset management firm Piper Jaffray holds mixed news for Google’s cloud services business.

      Piper Jaffray recently surveyed 112 Chief Information Officers on their IT priorities for 2015 and found that their enthusiasm for Google’s public cloud offering has waned a bit over the past year compared to offerings from other providers.

      Asked to choose their preferred public cloud provider for 2015, only about 7 percent of the respondents in the Piper Jaffray survey chose Google compared to 12 percent who said the same thing last year.

      At the same time, and somewhat paradoxically, Google was one of four cloud vendors in the survey from whom CIOs expect to buy more cloud services from this year. The others are Amazon, Microsoft and VMware.

      More than 50 percent of the CIOs surveyed said they would increase their spending with these companies, the Piper Jaffray report noted. Companies that are likely to spend less with include, Dell, Internap and Savvis, it added.

      Google’s apparent popularity decline among CIOs in the survey contrasted with modest gains by its major rivals. Amazon Web Services ranked first with 35 percent of the CIOs in the survey citing them as their preferred public cloud vendor, compared to 33 percent last year.

      About 21 percent pointed to Microsoft’s Azure as their preferred choice, while 16 percent gave the nod to Rackspace. The numbers for both, Microsoft and Rackspace were up marginally from the 20 percent and 15 percent recorded respectively last year.

      “For Microsoft, the results suggest to us that demand for Azure is likely to continue into 2015,” the Piper Jaffray report said pointing to a 121 percent year-over-year revenue increase for the cloud unit in the September 2014 quarter.

      The report does not offer any explanation as to why Google appears to have lost some favor among CIOs. Neither does it explain the reasons why CIOs say they still plan to increase their cloud spending with the company. And given the relatively small survey sample size of 112 CIOs it is hard know for sure whether the results are indicative of broad market sentiment.

      Piper Jaffray did not respond to requests for comment and neither did Google.

      However, In comments to the Wall Street Journal on Monday, Piper Jaffray analyst Gene Munster said Amazon’s early lead in the cloud computing market is helping it fend off competition from Google and others. “We attribute the Google losses to AWS winning the initial branding war over Google Cloud,” the Journal quoted Munster as saying. Amazon’s market leading position is helping it win more customers and in the process is attracting more developers to the AWS platform, Munster said.

      Dan Olds, an analyst with Gabriel Consulting Group said it’s too soon to say whether the results in the survey are an aberration or the signal of a trend.

      “However, it’s hard to deny that both Amazon and Microsoft cloud offerings have a large lead over Google in the minds of these CIOs,” he said in emailed comments. Given Google’s successful track record in most markets it enters, it is surprising the company hasn’t made more progress in the cloud services space he said.

      “The problem certainly isn’t name recognition–everyone knows the Google brand,” Olds said. “ I think Google’s problems lie with how they’re presenting their service. They don’t have a lot of differentiation from the other providers and seemed to mainly rely on price cuts to communicate their advantages over the competition.”

      What the survey shows is that fewer CIOs think of Google as their favorite cloud services provider. Even so, a majority of enterprises that are currently using Google’s cloud services plan on spending more with the company, he said.

      “However, a much higher percentage of AWS and MS Azure customers expect to spend more with those vendors,” he noted. “If these spending intentions hold true for 2015, then it doesn’t look like Google is going to catch up to Amazon or Microsoft anytime soon.”

      Google, a heavyweight in the consumer market has been making a concerted effort in recent months to attract more enterprise customers to its Google Cloud Platform.

      Last month the company announced increased support for Windows workloads on its Cloud Platform to help enterprises move their Windows environment to the cloud more easily. The company has also been working with developers and channel partners to help companies move enterprise workloads more easily to its cloud platform.

      Avatar
      Jaikumar Vijayan
      Vijayan is an award-winning independent journalist and tech content creation specialist covering data security and privacy, business intelligence, big data and data analytics.

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