Personal blog of Yzmir Ramirez

Google has shared its cloud revenue exactly once over the last several years. Silence tends to lead to speculation to fill the information vacuum. Luckily there are some analyst firms who try to fill the void, and it looks like Google’s cloud business is actually trending in the right direction, even if they aren’t willing to tell us an exact number.

When Google last reported its cloud revenue, last year about this time, they indicated they had earned $1 billion in revenue for the quarter, which included Google Cloud Platform and G Suite combined. Diane Greene, who was head of Google Cloud at the time, called it an “elite business.” but in reality it was pretty small potatoes compared to Microsoft’s and Amazon’s cloud numbers, which were pulling in $4-$5 billion a quarter between them at the time. Google was looking at a $4 billion run rate for the entire year.

Google apparently didn’t like the reaction it got from that disclosure so it stopped talking about cloud revenue. Yesterday when Google’s parent company, Alphabet, issued its quarterly earnings report, to nobody’s surprise, it failed to report cloud revenue yet again, at least not directly.

Google CEO Sundar Pichai gave some hints, but never revealed an exact number. Instead he talked in vague terms calling Google Cloud “a fast-growing multibillion-dollar business.” The only time he came close to talking about actual revenue was when he said, “Last year, we more than doubled both the number of Google Cloud Platform deals over $1 million as well as the number of multiyear contracts signed. We also ended the year with another milestone, passing 5 million paying customers for our cloud collaboration and productivity solution, G Suite.”

OK, it’s not an actual dollar figure, but it’s a sense that the company is actually moving the needle in the cloud business. A bit later in the call, CFO Ruth Porat threw in this cloud revenue nugget. “We are also seeing a really nice uptick in the number of deals that are greater than $100 million and really pleased with the success and penetration there. At this point, not updating further.” She is not updating further. Got it.

That brings us to a company that guessed for us, Canalys. While the firm didn’t share its methodology, it did come up with a figure of $2.2 billion for the quarter. Given that the company is closing larger deals and was at a billion last year, this figure feels like it’s probably in the right ballpark, but of course it’s not from the horse’s mouth, so we can’t know for certain. It’s worth noting that Canalys told TechCrunch that this is for GCP revenue only, and does not include G Suite, so that would suggest that it could be gaining some momentum.

Frankly, I’m a little baffled why Alphabet’s shareholders actually let the company get away with this complete lack of transparency. It seems like people would want to know exactly what they are making on that crucial part of the business, wouldn’t you? As a cloud market watcher, I know I would, and if the company is truly beginning to pick up steam, as Canalys data suggests, the lack of openness is even more surprising. Maybe next quarter.

With its latest $34 billion acquisition of Red Hat, IBM may have found something more elementary than “Watson” to save its flagging business.

Though the acquisition of Red Hat  is by no means a guaranteed victory for the Armonk, N.Y.-based computing company that has had more downs than ups over the five years, it seems to be a better bet for “Big Blue” than an artificial intelligence program that was always more hype than reality.

Indeed, commentators are already noting that this may be a case where IBM finally hangs up the Watson hat and returns to the enterprise software and services business that has always been its core competency (albeit one that has been weighted far more heavily on consulting services — to the detriment of the company’s business).

Watson, the business division focused on artificial intelligence whose public claims were always more marketing than actually market-driven, has not performed as well as IBM had hoped and investors were losing their patience.

Critics — including analysts at the investment bank Jefferies (as early as one year ago) — were skeptical of Watson’s ability to deliver IBM from its business woes.

As we wrote at the time:

Jefferies pulls from an audit of a partnership between IBM Watson and MD Anderson as a case study for IBM’s broader problems scaling Watson. MD Anderson cut its ties with IBM after wasting $60 million on a Watson project that was ultimately deemed, “not ready for human investigational or clinical use.”

The MD Anderson nightmare doesn’t stand on its own. I regularly hear from startup founders in the AI space that their own financial services and biotech clients have had similar experiences working with IBM.

The narrative isn’t the product of any single malfunction, but rather the result of overhyped marketing, deficiencies in operating with deep learning and GPUs and intensive data preparation demands.

That’s not the only trouble IBM has had with Watson’s healthcare results. Earlier this year, the online medical journal Stat reported that Watson was giving clinicians recommendations for cancer treatments that were “unsafe and incorrect” — based on the training data it had received from the company’s own engineers and doctors at Sloan-Kettering who were working with the technology.

All of these woes were reflected in the company’s latest earnings call where it reported falling revenues primarily from the Cognitive Solutions business, which includes Watson’s artificial intelligence and supercomputing services. Though IBM chief financial officer pointed to “mid-to-high” single digit growth from Watson’s health business in the quarter, transaction processing software business fell by 8% and the company’s suite of hosted software services is basically an afterthought for business gravitating to Microsoft, Alphabet, and Amazon for cloud services.

To be sure, Watson is only one of the segments that IBM had been hoping to tap for its future growth; and while it was a huge investment area for the company, the company always had its eyes partly fixed on the cloud computing environment as it looked for areas of growth.

It’s this area of cloud computing where IBM hopes that Red Hat can help it gain ground.

“The acquisition of Red Hat is a game-changer. It changes everything about the cloud market,” said Ginni Rometty, IBM Chairman, President and Chief Executive Officer, in a statement announcing the acquisition. “IBM will become the world’s number-one hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”

The acquisition also puts an incredible amount of marketing power behind Red Hat’s various open source services business — giving all of those IBM project managers and consultants new projects to pitch and maybe juicing open source software adoption a bit more aggressively in the enterprise.

As Red Hat chief executive Jim Whitehurst told TheStreet in September, “The big secular driver of Linux is that big data workloads run on Linux. AI workloads run on Linux. DevOps and those platforms, almost exclusively Linux,” he said. “So much of the net new workloads that are being built have an affinity for Linux.”

VirusTotal, the virus and malware scanning service own by Alphabet’s Chronicle, launched an enterprise-grade version of its service today. VirusTotal Enterprise offers significantly faster and more customizable malware search, as well as a new feature called Private Graph, which allows enterprises to create their own private visualizations of their infrastructure and malware that affects their machines.

The Private Graph makes it easier for enterprises to create an inventory of their internal infrastructure and users to help security teams investigate incidents (and where they started). In the process of building this graph, VirtusTotal also looks are commonalities between different nodes to be able to detect changes that could signal potential issues.

The company stresses that these graphs are obviously kept private. That’s worth noting because VirusTotal already offered a similar tool for its premium users — the VirusTotal Graph. All of the information there, however, was public.

As for the faster and more advanced search tools, VirusTotal notes that its service benefits from Alphabet’s massive infrastructure and search expertise. This allows VirusTotal Enterprise to offers a 100x speed increase, as well as better search accuracy. Using the advanced search, the company notes, a security team could now extract the icon from a fake application, for example, and then return all malware samples that share the same file.

VirusTotal says that it plans to “continue to leverage the power of Google infrastructure” and expand this enterprise service over time.

Google acquired VirusTotal back in 2012. For the longest time, the service didn’t see too many changes, but earlier this year, Google’s parent company Alphabet moved VirusTotal under the Chronicle brand and the development pace seems to have picked up since.

 When Google released a new enterprise version of Glass on Tuesday, a bevy of headlines suggested Glass was back. But it never really left. Even though the Explorer program aimed at consumers ended in January, 2015, Google has continued to sell Glass to businesses. In that context, yesterday’s release wasn’t a comeback so much as a continuation of an enterprise strategy for Glass. Read More

 Google announced that an entirely overhauled version of App Engine was generally available as of today. It made the announcement at Google Cloud Next being held this week in San Francisco.
App Engine is Google’s platform-as-a-service for building application backends without having to worry about maintaining a complex infrastructure.
The big news is that App Engine now supports any… Read More

 David Drummond, who joined Uber’s board of directors in August 2013, stepped down several weeks ago, Uber has confirmed to TechCrunch. The Wall Street Journal first reported the news. At first blush: no surprise whatsoever. Earlier this month, Uber CEO Travis Kalanick said the company’s first fleet of self-driving cars would begin running in Pittsburgh soon (as soon as this… Read More

 A new SEC filing posted Friday gives more clarity about what led up to Microsoft acquiring LinkedIn for over $26 billion. And they prove that Microsoft wasn’t the only prospective buyer. It shows that the talks between LinkedIn CEO Jeff Weiner and Microsoft CEO Satya Nadella began on February 16 of this year, just 12 days after the earnings debacle where LinkedIn shares plummeted. And… Read More

 When Google bought bebop Technologies last fall for $348 million, it got more than a stealthy startup. It also landed Diane Greene as executive vice president of Google Cloud Enterprise — and that perhaps was the bigger prize. Greene brought with her years of industry experience, having co-founded and been CEO at VMware for a decade, building it into a virtualization powerhouse. In… Read More

 Google just announced a big restructuring of the company, sending shares up about 6 percent in extended trading. After the announcement, shares of Google rose 5 percent, but have since risen even further. As part of the restructuring, Larry page is now the new CEO of a parent company called Alphabet, while Sundar Pichai will be CEO of Google. According to a regulatory filing,… Read More