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Google Taps VMware Founder to Chase Amazon in the Cloud

Google board member Diane Greene is now a Googler.

Aleksandr Kurganov/Shutterstock

With its cloud business, Google finds itself in a rare position: Behind. The search giant has toyed with different enterprise products for years, with limited success, and now faces fierce competition from Microsoft and Amazon.

But Google is signaling that it is serious about building an enterprise business. And here is its biggest sign: Alphabet has tapped Diane Greene, a founder and former CEO of the software company VMware, to run it.

Sundar Pichai, Google’s CEO, announced the move in a blog post. Therein he said Greene, who has been a Google board member since 2012, will take over “all our cloud businesses, including Google for Work, Cloud Platform and Google Apps.”

The move includes an acquisition of Greene’s new company, Bebop. Pichai describes it as a “new development platform that makes it easy to build and maintain enterprise applications.” Google isn’t sharing a price on the deal.

Google SVP Diane Greene
Diane Greene, Google’s newest SVP

Greene is joining at a moment when Google’s cloud efforts, both on the application and the infrastructure side, seem to be spinning. Three years ago, the narrative about Google Apps was how it was so often displacing Microsoft Office with its word processing and spreadsheet apps that run in a browser.

Now that Microsoft Office has gotten the cloud religion with Office 365, which runs both as an on-premise version and in the cloud, the narrative around Google Apps has shifted in the last year or so: It’s now described generally as “doing well with small businesses,” even though Google itself still touts the fact that 60 percent of the Fortune 500 use it.

Still, the cloud world has just gotten a lot more competitive. On Tuesday, Microsoft announced Office Graph, a set of unified APIs that will let third-party developers build add-ons and apps that enhance how Microsoft Office works. This hiring seems a partial response to that.

Google has been more vocal about its plans to rev up the cloud business. Pichai touted it on the latest earnings call, and Urs Hölzle, the longtime SVP, said at a conference that its revenue could outpace search in five years (a bold claim). Hölzle will now report to Greene.

Greene had been one of the founders of VMware, the company that more or less introduced the world to the concept of virtualization. It’s a key enabling technology of cloud computing and allows one computer to subdivide its resources — CPU, storage and memory — in such a way that it can act like many computers at once.

She started the company with her husband Mendel Rosenblum and was its CEO for about 10 years, which included about four years after its acquisition by EMC, and saw it through the IPO of the 19 percent stake that trades on the New York Stock Exchange. EMC owns a controlling 81 percent share.

According to stories at the time, Greene’s relationship with EMC’s CEO Joe Tucci had cooled by 2008. Minutes after Greene finished a presentation to the VMware board of directors, she was unceremoniously pulled aside by Tucci and fired. VMware shares fell by more than 20 percent the following day and several Greene loyalists, including her husband, left the company soon after.

Her biggest concern at Google will be chasing Amazon. The e-commerce titan has built a formidable Web services operation that continues to grow swiftly. Last quarter it reported revenue of $2.1 billion, a 78 percent annual growth. People in the industry say that Google has been more aggressive going after new clients, but that Amazon has a key network advantage and continues to dominate.

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