In the Cloud Business and Services market, the companies that provide the main solutions and are among the biggest drivers of this expansion are Amazon and Microsoft. Google, although one of the most chief vp sales marketing officers email lists powerful brands in the world, has precisely this weakness: in recent years, the company headquartered in Mountain View (California, USA) has seen its main competitors distance themselves even further in this dispute.
“Google is far behind, practically out of the Cloud Service market. It loses mainly to Amazon and Microsoft, two strong competitors in several other services also offered by Google”, analyzes Dino Bastos , CEO of Partners Comunicação Pro Business .
To give you a deeper understanding of the competitive landscape in the Cloud Business and Services market, see the data below:
Amazon's Amazon Web Services (AWS) captures nearly 47% of the industry's market share;
Microsoft's Azure has a 16% share;
Google 's Google Cloud embraces a mere 4% presence.
In this context, the subsidiary of Alphabet Inc decided to move to increase its presence and compete more strongly in a market largely dominated by its competitors.
The strategy
A possible purchase of Salesforce;
An increase in technology and services offered;
An aggressive goal of taking second place;
A pre-determined period of 3 years, that is, until 2023.
Salesforce is an American on-demand software company that offers special solutions in artificial intelligence, customer service, marketing, community management, application creation and the one for which it is famous: Sales Cloud, one of the most praised CRM systems in the world.
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“It’s a very strong combat strategy: buy Salesforce, improve the technology and automatically become the second-placed company in terms of market share,” emphasizes Dino Bastos. “It’s a method of inhibiting the growth of competition and protecting the market.”
But Partners' CEO is not alone in this view. According to a market analysis by RBC Capital Markets , Google may follow this path due to its difficulties in growing and establishing itself as a major force in the global Cloud Service market share. With the acquisition of Salesforce, the leap to occupying second place in market dominance would be practically instantaneous. After all, there is already a common movement of companies that are giving up AWS and migrating to Azure.
By following the movement of these companies, Google intends to take advantage of this migration and position itself as the second dominant company when it comes to Cloud Business.
“It is not necessarily a profitable measure. Many companies accept the consequences of this type of move. In some cases, they end up breaking even, in others they even end up losing money. However, they manage to inhibit the growth or new flights of competing companies,” explains Dino Bastos.
According to RBC, the transaction is expected to reach $250 billion. In terms of valuation, this would already position Google Cloud Services in second place in the market.
In addition, a new division within the company is likely to be created. A new service and even a new brand focused on cloud services may also be created, with the aim of enabling Salesforce, its community and its entire customer base to remain true to the brand’s values and culture.
This move to separate the Google and Salesforce brands would happen for two reasons:
The hiring of Thomas Kurian, an executive already experienced in the market, including on Wall Street, who arrives with 20 years of experience as president of products at another giant, Oracle.
A new brand not associated with Google would mitigate the criticism and attacks on its antitrust policies that Google has faced over the years. A new “face” could make people “forget” about these issues almost unconsciously.
Why would Google buy Salesforce?
Even though Salesforce is primarily recognized for the excellence of its Sales Cloud, a cloud-integrated Customer Relationship Manager (CRM), and not for Cloud Business and Service in the general sense, market analysts cannot help but notice that the company has consistently grown in the number of customers acquired, new features and products for businesses, and its community of users and brand promoters.
Its cloud infrastructure, despite not being the most extensive, added to all the points and values mentioned above, should boost Google and its entire technological ecosystem to second place in the global Cloud Business and Service market, leaving it only behind Amazon.
“By acquiring Salesforce, Google also acquires a very strong database – within Sales Cloud – which contains the entire customer journey, from the first attraction marketing strategies, all the way to the sale,” says Dino Bastos.
The fight is for the acquisition of the most valuable asset of the moment, a source of interest for Amazon, Apple, Microsoft, Facebook, Google and all the major corporations in this market: data. The companies' data and ours too.
