Google Cloud CEO On Huge Investments, AI And Challenges In 2024

CEO Thomas Kurian dives into Google Cloud’s biggest market opportunity, investments, partner strategy and toughest challenges facing the company in 2024.

Google Cloud CEO Thomas Kurian has some bold investment plans in store for the $37 billion cloud company this year around cybersecurity, collaboration and generative AI, with Google partners being the tip of the spear.

“The biggest market opportunity we see [in 2024] is moving customers from AI pilots and proofs of concept toward larger implementations that solve real business problems,” Thomas Kurian told CRN as part of its 2024 CEO Outlook project.

“Our partners will be critical as this pivot takes place in 2024 because our partner-led approach to services delivery means that the majority of customers implementing Google Cloud AI will do so with the support of a partner,” he said.

Mountain View, Calif.-based Google Cloud recently generated over $9.1 billion in revenue during its fourth-quarter 2023, an increase of 26 percent year over year.

The cloud computing company now accounts for nearly 11 percent of parent company Google’s total $86 billion revenue as of fourth-quarter 2023.

Thomas Kurian: Generative AI Is An ‘Unmatched Opportunity’

Not only is Google Cloud on a record $37 billion annual run rate, but the company is more profitable than ever thanks to Kurian’s leadership over the past six years.

Google Cloud captured operating income of $864 million in fourth-quarter 2023, up significantly from an operating loss of $186 million year over year. This means the company increased its operating income by over $1 billion from fourth-quarter 2022 to fourth-quarter 2023. For all of 2023, Google Cloud achieved a 5.2 percent operating margin, marking the company’s first year with a positive operating margin.

Kurian said he’s bullish about Google Cloud’s growth, channel partner strategy and investment vision in 2024, specifically around GenAI.

“We lead cloud service providers with strong differentiation in each category, and we look forward to continuing to expand these capabilities to better serve our customers [in 2024],” said Kurian. “All of these investments offer our partners and customers an unmatched opportunity with the emergence of generative AI. Our vision for generative AI has been to create a platform that allows people to build and use agents that can understand, reason and act on information in a similar way that humans do.”

As part of CRN’s 2024 CEO Outlook project, Kurian takes a deep dive into Google Cloud’s biggest market opportunity, tech investments, partner strategy and toughest challenges facing the company in 2024. Here is what every Google Cloud partner should know about the company’s channel and AI strategy this year.

What key tech investments do you plan to make in 2024?

We’ll continue to invest in new infrastructure, data analytics, cybersecurity, collaboration and AI technologies to meet customers’ needs.

Today, we lead cloud service providers with strong differentiation in each category, and we look forward to continuing to expand these capabilities to better serve our customers.

All of these investments offer our partners and customers an unmatched opportunity with the emergence of generative AI. Our vision for generative AI has been to create a platform that allows people to build and use agents that can understand, reason and act on information in a similar way that humans do.

For example, with Gemini, we offer a powerful multimodal large language model that includes advanced reasoning skills and cost efficiency; with Vertex AI, we provide a comprehensive set of tools, models and resources to build generative AI applications; and with Duet AI, we are embedding AI across products like Workspace and Google Cloud Platform to help customers and developers streamline tasks like content creation, code generation, note-taking and much more.

What are the toughest challenges facing customers in 2024?

Customers are looking at how best to drive their business transformations with AI.

In my conversations with customers, they’ve shared a few challenges they face in the year ahead: first, an urgent need to get their data estates in order so they can deploy AI tools.

Second, ensuring they have the right AI skills in place to tune and ground models.

Third, training and upskilling employees who will be using these tools more often.

Finally, they want to ensure they are adopting AI in a safe and responsible manner, reducing possible risks like hallucinations.

What impact do you expect AI to have on the business you and your partners do together in 2024?

This will be a huge inflection point for the industry. We are already seeing a shift where customers are seeking highly specialized partners who bring very deep product expertise to the table.

Google Cloud partners are now seeing AI infused into virtually every customer engagement. We’re committed to providing our partners with the right resources, tools, support and incentives to meet this opportunity and build their own thriving AI businesses.

To support partners, we are growing our overall rewards for them moving forward.

For instance, we are substantially increasing our incentives for partners across both Google Workspace and GCP, and increasing rewards for partners who drive more workload adoption and accelerate adoption of key products like AI.

What’s the biggest market opportunity you and partners will tackle in 2024?

The biggest market opportunity we see is moving customers from AI pilots and proofs of concept toward larger implementations that solve real business problems.

Our partners will be critical as this pivot takes place in 2024 because our partner-led approach to services delivery means that the majority of customers implementing Google Cloud AI will do so with the support of a partner.

To address this opportunity, it’s important for partners to continue to develop deep product expertise and grow their AI services capacities. We’ve worked closely with our ecosystem for several years to equip them with the tools and programs they need to build their delivery and managed services expertise in critical areas like AI, data and security.

In fact, we’ve increased our number of certified partners by 15X since 2018.

Last year, our largest consulting and systems integrator partners committed to train more than 150,000 people to deliver Google Cloud AI to customers.

Our partners have always played an incredibly important role in the growth of Google Cloud and in customer success, and we’re committed to helping them address this significant opportunity with AI, as well as continually expanding opportunities in areas like cloud migrations, cybersecurity and data management.

What is the key to success for your partners in 2024?

Customers are looking for deeply skilled partners to implement solutions, execute cloud migrations, build new AI applications and more.

Channel partners are becoming “next-generation MSPs for the AI era,” who will focus not only on infrastructure, but also on the critical areas of AI, data and security.

The AI opportunity in particular demands deep domain knowledge. For example, MSPs now need to not only help customers train a model, but continue to retrain and refresh it, and manage complex issues like model drift on a customer’s behalf.

We’ve been working on AI for years at Google Cloud. Our partners who had invested in building deep AI product expertise were able to very quickly address the spike in customer demand for AI over the past year.

This opportunity is only going to grow, and the partners who build deep AI expertise today will be best positioned to address this market.