In what was easily the biggest news of the past week,
Google reinvented itself as the modern-day tech conglomerate, announcing plans to create a new holding company called Alphabet that will sit above the search giant. By now you've digested all the takes and struggled to picture Larry Page as the new Warren Buffet, but amid all the hubbub we don't have a lot of insight into what this move means for Google's cloud computing strategy.
It appears that Urs' organization will (for now) remain underneath Google Inc., now headed by the very capable Sundar Pichai (
Structure veteran. Just sayin'.) But the question becomes one of focus: will anything change under a new leader? Will Google's cloud team still have the support and flexibility of the broader organization to go after this important future market?
Although Google, I mean, Alphabet (this is going to take a little while) has likely been planning this move for a long time, the cloud group probably wasn't on the list of initial priorities. And that makes sense: even though Google Cloud is facing a tough market competing against Amazon Web Services and Microsoft, it's growing, and shaking things up right now doesn't really make much sense.
At some point, however, Google's infrastructure group seems like
exactly the type of business that could emerge under Alphabet as a separate company. If Amazon one day spins off Amazon Web Services and Microsoft continues to invest in Azure as one of its crown jewels, a separate, focused Google Cloud group removed from Google Inc. might provide the best environment for it to grow and attack all kinds of as-a-service business models. And it would have quite a sales pitch to public cloud doubters: "Hey, Google runs 100 percent on us!"
This is not going to happen for a while: Google and its infrastructure are extremely intertwined, and Google probably doesn't want to break out its cloud revenue and profits as part of Alphabet, preferring to hide them within the overall Google pie as the group gets going. But such a company -- with amazing infrastructure at its disposal and a cash machine to fund investment -- could be a formidable cloud services competitor in the coming years.