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Google could match Amazon and Microsoft with the virtual desktop tool, but only keeps it for employees

Thomas Kurian, CEO of Cloud Services at Google LLC, speaks during the Google Cloud Next ’19 event in San Francisco, California, United States, on Tuesday, April 9, 2019. The conference brings together industry experts to discuss the future of the cloud to discuss computing.

Michael Short | Bloomberg | Getty Images

Google maintains software, Cloudtop, which employees can use to access internal programs. This could be helpful for companies looking to keep their employees productive when they work from home while they seek shelter to prevent the coronavirus from spreading further.

However, when Google’s cloud customers ask for a virtual desktop solution, Google instead refers them to third-party solutions, according to two people familiar with the company’s cloud business who have asked for anonymity when discussing internal business matters.

Google’s approach is in sharp contrast to the market leaders Amazon and Microsoft. Both have their own virtual desktop services and both have seen usage spikes during the pandemic. For many companies that are first time navigating large-scale remotely, it is easier to rely on cloud providers to manage infrastructure than it is to keep administrators on-site to manage servers – or PCs on new ones To send employees.

For example, after Zoom saw a surge in new customers during the pandemic, the video calling software company signed up for more than 1,000 Amazon WorkSpaces virtual desktops for its help desk workers, Amazon announced in November. In May, AWS announced that oil and gas pipeline operator TC Energy has signed up for Amazon WorkSpaces so employees can work securely from home.

The boom was so important to Microsoft that CEO Satya Nadella mentioned it in the company’s quarterly earnings statement with analysts last April. “Windows Virtual Desktop usage tripled this quarter as organizations deploy virtual desktops and apps on Azure for secure remote work,” said Nadella.

No plans to make Cloudtop available to customers

Google first made its Cloudtop service available to employees in 2017. Its purpose is to help them create software, interact with internal systems, and communicate using Internet relay chat or IRC. The service offers desktops with Linux and Windows operating systems that can be useful for testing the source code.

Over the past several years, Google has impressed the information technology industry by making software it relies on for its core Internet business available to outsiders. She published the databases Cloud Bigtable and Cloud Spanner after describing the architecture of the underlying software in scientific papers, for example.

Google published an article about its virtual desktop software in 2018. Over 25% of Google employees use virtual desktops. Google migrated the software from its corporate infrastructure to the public cloud to improve the user experience and lower the total cost of ownership on paper.

But that didn’t result in an outsider product.

A Google spokesman said the company recognizes the increased demand for virtual desktops as employees work remotely. However, there are currently no plans to offer Cloudtop as a cloud service. Instead, the company is prioritizing its third-party offerings in the virtual desktop market. Telus uses a privately owned Itopia product in the Google cloud, while Equifax uses, for example, Citrix software in the Google cloud. Other customers use a privately owned Workspot product.

By promoting partner products, customers can extend the technologies used in their data centers to the public cloud, and customers are not locked into a proprietary service, the spokesman said.

These products have gained momentum since the coronavirus emerged. In 2020, revenue growth in Citrix’s Workspace segment, which also includes virtual desktop software, accelerated year-on-year to around 13% compared to 5% in the previous year. Revenue is also profitable: According to FactSet, Citrix achieved a gross margin of almost 85%, more than 97% of the companies in the S&P 500 index.

This growth is benefiting Google to some extent: the company is cutting the fees that third-party customers charge by 20%.

However, neither of the third-party options is a huge hit, according to the two people familiar with the company’s cloud business.

“It was a bit of a surprise that Google was no longer present in this market,” said Michael Silver, an analyst at the technology research company Gartner, who covered this category. “I don’t know why it wasn’t.”

CLOCK: Thomas Kurian from Google Cloud on the future of cloud computing

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Steven Gregory