HEAD IN THE CLOUDS: Week 1


Man with clouds for a head and wearing a bowler hat

It is hard to stay on top of the latest news, events and rumblings tied to cloud computing and the cloud vendors responsible for it.  For many of us, our memories are not what they use to be, making it even harder to keep up.  Here are a few conversational topics that have come up recently, along with my thoughts, perspectives and observations:

Could Microsoft Acquire Slack?

I recently came across an article that mentioned how Slack launched a new update that effectively makes it easier to search for channels — an update that seemingly would provide added value to its users.  This got me thinking.  Specifically, it got me thinking about how Slack also recently announced it had confidentially filed to go public and an IPO is expected this year.  But could Slack also eventually get acquired?  And if so, by who?

I could totally see Microsoft swooping in and aggressively trying to acquire Slack.  Beyond acquiring extremely valuable market share as well as customers they may have previously lost, it would certainly help Microsoft further build out and enhance their very important collaboration offering, Microsoft Teams.

Currently, there are 500,000+ organizations using Microsoft Teams, including 91 of the Fortune 100.  Even though these massive numbers are largely tied to the fact that Microsoft bundles Teams with Office 365, this is still a very impressive accomplishment.  But there is a lot more opportunity to further grow adoption, and Microsoft knows it.  They know that they need to continue to enhance Microsoft Teams to increase the likelihood of adoption and grab the market share that is there for the taking.

They are also extremely focused on getting into more enterprises, especially those that have not yet adopted Office 365, using Microsoft Teams for Firstline Workers as a foot in the door.  Ultimately, Microsoft’s goal is to push these enterprises to adopt Office 365 F1 and then further down the line, migrate them to their “holy grail” cloud bundle for Firstline Workers, Microsoft 365 F1.  Microsoft also knows that Firstline Workers (shop floor workers, etc.) are the untapped base of users within existing enterprise customers that must be obtained before Google gets them.  Starting them down the path through Microsoft Teams for Firstline Worker’s adoption is their best bet.

Google Revenue Growth is Impressive, Need More Details

Needless to say, Google’s total revenue growth has been incredible over the last few years.  Here is a snapshot to illustrate the point:

2018: $136.2B

2017:  $109.7B

2016: $89.5B

2015: $74.5B

But it is important to remember that the revenue reported here is total Google revenue.  Google and its parent company, Alphabet, are still not breaking out Google Cloud revenue.  The reluctance to share has obviously led to speculation and concern as to why they wouldn’t just open up, especially if things were going well.  Now, to be fair, they did share this level of detail once before, about a year ago.  Unfortunately, it was the first and last time.  At the time, they indicated they had roughly $1B in revenue for the quarter that was tied to Google Cloud Platform and G Suite.

The increased level of attention and significant investment Google and Alphabet are making in Google Cloud to grab more enterprise customers and market share includes bringing in former Oracle executive, Thomas Kurian, to run the show.  It will certainly be interesting to see if they eventually start to report and break out Google Cloud revenue to show the market, investment community and competitors (e.g., Microsoft and Amazon) they are successfully executing to their plan and getting more Google Cloud wins and revenue growth.

It would be great to see the revenue tied to G Suite and Google Cloud Platform (GCP), specifically.  Given the level of success already obtained and the amount of enterprises that are seriously considering or have already made the decision to adopt G Suite or use GCP, I am willing to bet it won’t be long before deeper reporting into revenue and use occurs.

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