New products are adopted slowly if they are adopted at all. The expectation that Google Cloud's AI offerings would generate a monsoon of new revenue, within the five year horizon Diane Greene referenced frequently, has proven to be incorrect.
Google Cloud Platform (GCP), under Diane's leadership, has attempted to leapfrog its cloud competition by selling the superiority of GCP's AI offerings. But Google are early and have dramatically overestimated the speed of AI adoption.
Product adoption can be measured. 3M corporation is one of the most innovate companies in the world and how they measure the success of that innovation is in how much revenue it returns to their business. This is a good measure of success for any technology company. In Transforming a Legacy Culture at 3M: Teaching an Elephant How to Dance, the New Product Vitality Index (NPVI) is shown as a 3M measure of sales generated from products introduced during the past five years.
At 3M's highest performing point, its NPVI has not exceeded 35%. Out of more than 50,000 products touching different parts of our lives, two thirds of their revenue comes from products that are more than five years old. For companies not as successfully innovative as 3M, an NPVI of 3%-5% of revenue is common.
New products are adopted slowly if they are adopted at all, and AI is being adopted slower than Google Cloud needs it to be.
While GCP's financials are opaque in Alphabet's earning reports there is no visibly increasing GCP/AI bounce in Google's revenue. Not in the way AWS and Azure have clearly contributed to their parent operations.
AWS and Azure built their leads selling infrastructure and platform as a service offerings making it understandable that Google would look for a point of differentiation. AI has been the wrong point of differentiation. While AI will diffuse throughout new products over time, being built in the way embedded databases were, this adoption time will be long.
Changing business leaders will not alter Google Cloud's market position because it does not change its point of differentiation. Finding a differentiator with an adoption timeline that works for Google, and works against its competitors, will be what will earn Thomas Kurian his compensation.
Or if he too gets it wrong, it'll earn Thomas a severance package..