Google Boss: Bank in cloud is a breakthrough


15-12-2017

"The cloud is still in its infancy. So it helps when a heavily secured and regulated institution, migrates to the cloud"

Analysts expect Google’s parent company Alphabet to get half of its revenue from the cloud by 2020. The 300% annual growth required for this is an ambitious goal. André Hoekzema, the Dutchman in charge of Google Cloud in the Benelux, is hopeful: “Things are moving so fast.”

Hoekzema managed to win Spotify as a customer earlier. He had prepared an agenda for one of the first conversations with the Swedish music service: first discuss which features were coming up, then look at the revenue model. But he was interrupted by the people at Spotify. Hoekzema: “They corrected me. The future features are the revenue model, they said.”

At first, he did not understand. “But they thought: if we can jump on Google’s roadmap, we will no longer have to build all kinds of features ourselves. If we can free up the people working on those features, they’ll be able to focus on building the best music service.”

In order to save its customers’ work, Google is actually trying to expand its team globally, including in the Netherlands. This will also make the company less dependent on its advertising revenues. In 2016, no less than 88% of Alphabet’s turnover came from advertising. Android Play Store and hardware revenues are accounted for in the remaining $10 billion. If the company manages to earn half of its revenue from the cloud by 2020, then it should be generating $45 billion – even if sales do not rise. Market leader Amazon earned only $ 12.2 billion from the cloud last year.

Despite this ambitious goal, Hoekzema is not spiteful towards his competitors. He mentions the Dutch company Ohpen, the first bank in the world to operate in the cloud, as “a fantastic success.” Oddly enough Ohpen is a customer of Google Cloud’s main competitor, Amazon Web Services.

Doesn’t that sting? Hoekzema: “That’s not how I am. We still have to convince people that it’s completely safe to store your files with a cloud provider. The cloud is still in its infancy. So it helps when a heavily secured and regulated institution, such as a bank, migrates to the cloud – even if it’s not our cloud.”

Not everyone is positive Google’s cloud ambitions. Wouldn’t growth in that area only add to the enormous amount of information the company has already collected about its users, which is, in turn, used to sell more ads?

According to Hoekzema, this was not a problem for a customer like Spotify. “Google was born in the cloud, we understand that not all employees require access to all kinds code, for instance. Customers are impressed by the fact that a Google search result appears on their screen within 24 milliseconds. Surely we must be doing something right.”

And what of the financial world, which is traditionally cautious? The sector already has a player which operates fully in the cloud. “Things are moving very fast. We’re almost ready to have a standard contract for financial institutions,” Hoekzema says.

Written by Rob Goossens, originally published in Dutch, in De Telegraaf on 13-12-2017.