Alphabet likely won't absorb Google Cloud Platform, Compute Engine

Google's cloud business are unlikely to be spun out -- further evidence Google is less transformative and groundbreaking than it ought to be

Alphabet likely won't absorb Google Cloud Platform, Compute Engine

News of Google's massive restructuring has already gone past the "is it April Fools' again?" phase and well into the "what's this mean for me?" phase. Many of Google's more experimental subsidiaries are being spun off from the main company, but the "core" Google businesses remain under the umbrella of the Big G.

Does that mean Google Cloud Platform and Google Compute Engine are staying within the fold? By all accounts, yes --- and there's a good chance Google has a vested interest in standing pat.

Keep your cloud close and your enemies closer

Google's stated reason for breaking out its more experimental projects is to make them more transparent and accountable -- at least to the bean counters. Cloud Platform and Compute Engine are far from experimental; it's all but mandatory for a Google (or a Microsoft or an IBM) to have some kind of cloud offering. From that standpoint, it makes sense to keep Google's public cloud operations close to the chest.

Customers and investors, though, have good reason to want Google's cloud business to stand on its own two feet. Mainly, it would send a message that the business can (and ought to) be self-sustaining -- and doesn't need Google's firehose of ad-driven cash to be workable and can innovate entirely independent of its host.

We may never find out if that's the case. Aside from Google not yet breaking out financials about its cloud operations -- which Amazon has dared others to do -- the company's cloud strategy continues to center on undercutting competition on price. (Google's Moore's-law-driven pricing all but admits to that being the case.) If part of the game is to undercut the competition on price, it makes sense to keep the cloud business closer to Google's cash.

Winds of (little) change

If someone new were stepping up to run Google, perhaps the picture would be different for the cloud division. That doesn't look likely since Sundar Pichai has been newly installed as head of a post-re-org Google.

Pichai has been described as a get-things-done sort, but the focus of his work has been in Chrome, ChromeOS, and Android -- sides of the company completely opposite its work with cloud. In a recent interview with The Verge, Pichai barely mentioned enterprise offerings and focused instead on talking up the familiar, consumer-facing aspects of classic Google. Under his leadership, the cloud side of the business will likely be left to its own machinations and not be subjected to top-down prodding about its direction or growth.

Sure, Google's work with Kubernetes and its collaboration with OpenStack hint at intriguing possibilities, but for now, they're only possibilities and not the transformative offerings one might expect from a company of Google's stature and ambitions. As InfoWorld's Eric Knorr noted, for all it's done so far, the company still has yet to really deliver on providing its expertise in the form of advanced services for its customers.

With Pichai setting his attention on Google's plans to deliver and organize information to the masses, it's safe to assume that the cloud business will simply continue as-is -- a bulwark against competitors rather than a truly transfomative player. A major re-org of Google's larger interests might in time make such a shift possible, but any evidence of that is still scarce.