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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.

Google Cloud partner program setting a frenetic pace for partner intimacy and enablement

Setting the Pace

Amazon AWS lets a thousand flowers bloom, Microsoft Azure has curb appeal, Google Cloud is the new gold rush. Google Cloud reported Q3 revenues of US$4.99B, an increase of 45% year over year. During the same period, Google Cloud's operating loss has narrowed from US$1.2B to US$644M. Partners are optimistic. Although Google's partner program may be nascent, it is evolving rapidly, setting a frenetic pace and speeding down the right track. The partner management team within a vendor organization is responsible for the quality of partner relationships, a critical responsibility. Ramping up new partners is expensive and time-consuming. Partner portfolios deliver the most significant returns when vendors achieve high buy-in levels and mind share within their partner communities. Partner management isn't defined solely by relationship quality, though. The effectiveness of individual relationships and partner programs and activities can be measured in terms of sales impact – and sales impact itself is generally driven, at least in immediate terms, by the quality of sales enablement and support

Kevin Ichhpurani, Vice President, Global Partner Ecosystem & Business Development at Google, is creating a partner differentiation strategy. The strategy includes a no-services friction partner first approach, developer training, selling to line of business buyers, incentives alignment, and driving marketplace revenue. Carolee Gearhart, Vice President, Global Channel Sales & SMB Sales at Google, takes the strategy further by clearly defining fundamental tenets of partner advantage – simple, collaborative, innovative, and built for growth. Google never built Google Cloud as a channel business. To begin with, Google Cloud is enabling partner transparency, increasing visibility of information, and simplifying lead registration.

Google Cloud has two main product lines: Google Workspace, a subscription SaaS solution, and Google Cloud Platform, a cloud consumption solution. Since they are different products, they have different buyers, buying economics, and competitors. To have an efficient partner program, Google is building a program that meets where the customer is buying rather than changing the sales motion. Instead of creating a partner program for different partner types, Google is developing a program based on engagement models. Early on, Google realized that it does not have an installed base to which partners can sell renewals. Partners, therefore, have to visualize compelling economics to invest in Google Cloud Platform and Google Workspace. Hence, Google has invested in activity-based incentives in the pre-sale stage. Incentives that drive customer demand and lead to sales. Partners have differentiated motivations that drive new customer acquisition, upgrades, and multi-year contracts for Google. It has attractive deployment incentives and recently introduced adoption and consumption incentives, giving partners incremental profitability and incentivizing them to grow their book of business.

Partners are listening

Partners are listening and increasing their resource investments in GCP. Techaisle data shows that 58% of partners are building in-house expertise in Google Cloud. And 62% of SMB-focused partners are either currently offering or planning to offer Google Workspace solutions. We have spoken with many AWS, Azure, and Google Cloud partners in the last six weeks. As one partner put it most eloquently, "…but the reason we are standardizing on GCP is that it offers some of the best incentives that are out there. We used to work with AWS as well. And previously, my last organization worked heavily with AWS and Azure. We knew that Google had one of the best hosted Kubernetes offerings that are out there. Once we started working with Google, we found out that not only were we right, but Google also can manage Kubernetes clusters across all the clouds. And we also wanted to get into a little bit more data analysis and, in some ways, machine learning. Google has its Cloud Vision API, its natural language processing engines, Big Query, and just a mighty engine for any data analysis services. Microsoft, Amazon likes to say that they offer a better ecosystem, but we wouldn't necessarily consider that ecosystem a mature one just yet. There are not as many integrations as they are marketing. And Google has so far stayed true to its word on what they were able to promise as far as just raw processing power."

Thoughtful incentives enabling partner engagement

A key enabler for partner intimacy is the alignment of incentives for the entire customer lifecycle – from demand generation to customer adoption and cloud consumption. Google's attention to detail for both pre-and post-transaction is a vital partner empowerment lever. It naturally has a tremendous revenue flywheel effect for the partner. Google's deep focus on pre-sales incentives for partners has the partners excited. When PoCs make or break customer relationships, pre-sales funding is essential. As another Google partner told us, "Our incentives primarily come in the form of PSF and leads that Google funnels our way. So, during the SOW process, a significant portion of the SOW is paid for by Google. We do a lot of proof of concepts and pilots and just set them in secure landing zones. And I'd say probably say the large majority of PSF probably goes towards those types of engagements."

Sales incentives are one of the areas of highest vendor channel investment. Techaisle's partner research shows that fees and activity-based incentives, solution development funds, and deal registration are necessary enablement incentives for 40% to 50% of partners. Over 60% of partners prefer Sell To/Sell With sales models, indicating the need for co-sell, co-marketing, and IP-led solutions. Data shows that 29% of partner revenue is coming from IP-led solutions. The steady rise in demand for solution development funds and the decline of market development funds shows that partner IP-led solutions are becoming front and center. Recognizing the trend, Google has devised incentive programs to engage with different partner business models and partners selling Google Workspace and Google Cloud solutions.
techaisle google cloud blog graphics 01

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Google Anthos - a big deal for the midmarket - if a partner strategy emerges

Today, at Cloud Next 2019 in San Francisco, Google’s annual industry conference, Google announced its Cloud Services Platform, Anthos, for managing hybrid clouds that span on-premise and cloud data centers, and across multi-cloud environments. It is a big deal. It uses Kubernetes to enable migration across environments, is hardware agnostic, supports Amazon AWS and Microsoft Azure, and is subscription-based with a starting list price of $10,000/month per 100 vCPU block.

There is a thought that Anthos is a shot across the bows of AWS and Azure – and certainly, an approach that abstracts functionality from underlying cloud architecture will impinge on the ‘data gravity’ customer retention approach being used by these vendors. But IBM is at risk with Anthos as well, as the positive reception of its recent Red Hat acquisition is rooted in the promise of a single-vendor approach to providing hybrid and multi-cloud management and orchestration capabilities.

Clearly, Anthos has been developed with large enterprises as the target segment; some enterprise accounts are already early beta customers. To ease the addition of cloud as a core infrastructure platform in these accounts (by simplifying migration across in-premise and cloud environments) Google introduced Anthos Migrate, a service which will auto-migrate VMs from on-premise or other clouds into containers in the Google Kubernetes Engine.

It’s important to note, though, that hybrid cloud management is not only a point of pain within enterprise customers – it is a challenge (and arguably, a more acute issue) within midmarket (100-999 employees) firms. Consider these stats from Techaisle study of 510 US midmarket firms:

  • 52% of midmarket firms are using multi-cloud
  • 45% of midmarket firms have hybrid cloud environments
  • 38% of midmarket firms are using multiple public cloud providers for IaaS and PaaS
  • 27% of midmarket firms are planning to adopt G-Suite
  • 25% of midmarket firms are challenged by how to migrate from one cloud platform to another
  • 18% of midmarket cloud workloads are on hybrid clouds

Data for Europe and Asia/Pacific also very interesting current and planned adoption percentages for hybrid/multi-cloud.

The multi-cloud, hybrid-cloud journey began within midmarket firms much before it became fashionable within enterprises.

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New Research – Enterprise Cloud Adoption Trends

The rigor in data collection, the depth in data analysis and the accuracy in forward looking insights that Techaisle brings in its small business & midmarket research has extended to enterprise. Techaisle’s US Enterprise Cloud Adoption Trends provides an in-depth and definitive look into the state of cloud adoption within large businesses.

  1. Only 18% of US enterprises have mature cloud adoption and are optimizing usages; 36% have a cautious approach to cloud. Smaller size large enterprises have reached maturity stage whereas larger sized enterprises have ad hoc approach to cloud
  2. In 92% of US enterprises, IT has a voice on the Board and helps drive the direction of the business rather than business deciding IT needs
  3. Top IT challenge is implementing new strategic IT applications to improve organization’s competitiveness; 74% believe that investments in cloud increases their competitiveness
  4. Greatest benefit of cloud is the ability to launch new products and services
  5. 61% want seamless integration with on-premise systems
  6. For 65% of US enterprises, security and regulatory compliance is the biggest challenge in developing strategies for cloud adoption
  7. In 60% of enterprises data sovereignty and privacy are preventing acceleration of cloud
  8. 75% of US enterprises have adopted Hybrid cloud but the largest penetration growth is expected in the use of public cloud
  9. 74% are using Amazon AWS but Microsoft Azure is not far behind at 65%
  10. 20% of US enterprises use all three types of cloud deployment – private, public and hybrid but the future looks very different

The research deliverable covers several topics including:

  • Top 10 Enterprise IT challenges & business issues
  • Enterprise Cloud adoption maturity – ad hoc to mature
  • Greatest benefits of using Cloud
  • Factors driving cloud adoption strategy
  • Key attributes of a good cloud solution
  • Challenges in developing strategies for cloud adoption
  • Factors preventing Enterprises from accelerating cloud adoption
  • Current & Planned adoption of services, type of deployment & workloads
  • Current & planned cloud applications
  • Enterprise cloud best practices - hybrid cloud, hybrid IT
  • Enterprise cloud security best practices
  • Use of public cloud within enterprises
  • Benefits of Public Cloud adoption
  • Top drivers of Public Cloud adoption
  • Key challenges in implementing public cloud
  • Workloads being transferred to Public Cloud
  • Key Industry segments using Public Cloud services to derive its benefits
  • Types and brands of public Cloud platform being used - Amazon AWS, Microsoft Azure, Google Cloud, IBM SoftLayer
  • Comparative analysis of AWS, Azure, Google, SoftLayer
  • Influencing the Cloud buyer, mapping the buyer’s journey
  • Influencing the C-Suite

The Techaisle research contains a wealth of data that marketers can use to understand cloud adoption within the US enterprises and build IT buyer-centric marketing initiatives.

 

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