Insight Bite: Google Cloud sets sight on big acquisition

Chatter of an upcoming major leagues deal from Google has caught our eye in the past week, as the tech giant is apparently looking to make a significant acquisition to boost its cloud offerings.

Diane Greene, CEO of Google Cloud, has been busy since joining the company in 2015, with the remit of pulling together the company’s uncoordinated cloud efforts and make it into a more focused and serious business operation. That task has now been completed, Greene said in an interview with CNBC. That means there’s nothing stopping Google from selling cloud services into the biggest corporations – they’re especially keen on making inroads into health care, energy, financial services, and government.  

What Greene wants now is for Google to compete with Amazon Web Services and Microsoft on cloud services, and in all likelihood that means making a big acquisition. “We’re constantly on the lookout for a major acquisition,” Greene said.

Google Cloud has already made some smaller acquisitions, as well as the bigger spend on Apigee which set the company back $625 million in 2016.

Potentially on Google’s radar is Red Hat, the North Carolina cloud company known for working with open source software, or ServiceNow, a cloud player from Santa Clara. Neither would be cheap – Red Hat’s share price has doubled in the past year and would likely go for no less than $30 billion, or more if there’s a bidding war. But it’s exactly the kind of deal Greene may be thinking of, as she indicated she’s not interested in companies that make business tools that mimic consumer applications. That is mostly what Google is currently offering in terms of cloud, with its G Suite software for word processing and spreadsheets.

What is clear is that Google Cloud is trying to become more competitive: “We have so much innovation to do in the areas of our data analytics, in the areas of our machine learning, in the areas of our agile development environment, and then the underlying infrastructure,” said Greene. “We see that that’s our role and that’s what we’re really good at.” Whatever Google ends up buying to further its agenda, we expect it will make a splash.

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