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Google's new cloud chief has a culture clash ahead of him after 22 years at Oracle

Thomas Kurian

Upon leaving Oracle in September, after a 22-year career at the software giant, Thomas Kurian told friends and colleagues that he was going to take a step back and decide what to do next.

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One person he exchanged LinkedIn messages with was a former boss at Oracle, Gary Bloom, who has spent the past six years running database company MarkLogic. On Friday, Bloom, like the rest of us, learned that Kurian is headed toGoogle to run the internet company's high-profile but struggling cloud business.

Kurian will try to accomplish what his predecessor, VMware co-founder Diane Greene, couldn't, and turn one of the most successful and profitable consumer technology companies ever into a power player in enterprise. Bloom knows how hard that will be. MarkLogic sells database technology to large enterprises like Johnson & Johnson & J.P. Morgan Chase, and his customers, when they turn to the cloud, are almost exclusively using Google's top two competitors.

"They're predominantly looking at the Microsoft platform and the Amazon platform, and Google only comes up one out of 20 or one out of 30 times," said Bloom, who worked at Oracle for 14 years and was an executive vice president when he left in 2000.

"The comment I'm picking up from my customer base is that that it doesn't feel like Google is really serious about the enterprise. That could've been Diane, or Google management not listening to Diane."

Bloom praised Kurian as an "exceptional executive," but said he has no idea if it will work out at Google. While Oracle and Google are two of Silicon Valley's most notable stalwarts, separated by just 13 miles on Highway 101, they are universes apart from a cultural perspective.

One is a stodgy old software company known for selling million-dollar licenses and racking up maintenance fees. The other is where the hipster coders want to go to work on futuristic projects.

And they don't particularly like each other.

The two companies are embroiled in a nasty eight-year legal battle related to Google's use of the Java programming language, without a license, in developing its Android operating system for smartphones. Oracle owns the intellectual property behind Java, thanks to its 2009 acquisition of Sun Microsystems. In March, the Federal Circuit reversed a district court's ruling that had favored Google, sending the case back to the lower court to determine damages that it now must pay Oracle.

One former Google employee, who asked not to be named because of the sensitivity of the matter, is not optimistic that Kurian will be well received. The person said that despite the fact that he's focused on enterprise and not Android, he still has to figure out how to work with Googlers.

A Google spokesperson declined to comment beyond the company's blog post on Friday. A representative for Kurian didn't immediately respond to a request for comment.

Kurian's awkward departure

Greene, who took over the business three years ago when Google acquired her software company, Bebop, wrote a blog post on Friday announcing that Kurian would be joining the company this month and taking over the top spot in early 2019.

The announcement comes less than two months after Kurian's departure from Oracle, which was a bit awkward.

Kurian, who held the position of president of product development since 2015, told employees in an email on Sept. 5 that he was taking "extended time off from Oracle" and said he was "so very proud of all that we have accomplished" in moving the business forward, including to the cloud. The company said in a statement at the time that "we expect him to return soon."

But 23 days later, Oracle put out a filing saying that Kurian had resigned "to pursue other opportunities."

Kurian's former employer and new company have one big thing in common: Both have struggled to keep up with Amazon Web Services and Microsoft Azure in cloud infrastructure.

Google has been a persistent third or fourth place, unable to crack double-digit market share, despite adding more people than any other Google product group in 2016 and 2017, according to Greene. Oracle has had some success moving its traditional database customers to its own cloud, but according to industry researchers, its market share in public cloud is tiny.

Google touts itself as having the best technology for sophisticated machine learning and artificial intelligence workloads. The company also created the Kubernetes technology for virtual containers, which enables developers to easily move around code between machines and clouds.

But when it comes to the big storage and core computing contracts, numerous industry experts, venture capitalists and tech executives alike told CNBC that Google's sales team is ineffective, preferring to sell what it thinks is best rather than what customers say they need.

"You don't get paid to be right, you get paid to sell what the customer wants to buy," said Mackey Craven, a partner at venture firm OpenView Venture Partners in Boston who focuses on enterprise start-ups.

Bloom said that Kurian may have an advantage over Greene because his work at Oracle has spanned the technology stack, from the data center and hardware all the way up to application software. That's important at Google, because the company's cloud group includes cloud infrastructure as well as applications like email, word processing and spreadsheets. Greene, by contrast, spent her career in the "guts of the operating environment," Bloom said.

"Thomas is a really strong general manager and he understands all aspects of the business," Bloom said.

Still, Kurian has a major challenge ahead of him, not just getting Google's developer culture to come aboard, but also getting buyers comfortable and trusting of the Google brand.

While Google has long had a large roster of small and mid-size businesses using its apps, it's a whole different matter to attract chief information officers of large companies, particularly in tightly regulated industries. Kurian will need Alphabet's investment dollars to hire the right sales people and to pursue the big-spending accounts aggressively.

That's a tough sell at Google, whose investor base has come to expect high operating margins. A previous big-name enterprise executive, Diane Bryant was brought on as operating chief last November but lasted only seven months at the company.

Diane Bryant, Google Cloud COO.

"There are very few companies that serve the enterprise and low-end well," said Lew Cirne, CEO of software developer New Relic, which has been through its own struggles in that department. New Relic sold almost exclusively to smaller businesses when it went public in 2014, and now gets over half its revenue from enterprises, according to Cirne. "I underestimated how hard it can be," he said.

But Cirne is quick to point out that we're still in the early days of companies moving their core workloads and applications from their own facilities into the public cloud. Customers want multiple options for security purposes as well as to make sure they're getting the best deals available in each market where they operate.

In other words, it's not too late to make up ground.

"Thomas is a world-class executive and Google is showing a commitment to this," Cirne said. "We firmly believe it will be a multi-cloud world, and we're in the early innings."

— CNBC's Jordan Novet and Jillian D'Onfro contributed to this report.

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