Program & Batch

PGDM 2014-16

Term:

VI

Course Name:

IT Strategy

Name of the faculty:

Dr Surinder Batra

Topic/ Title :

Decoding Googles IT Strategy for 2020

Original
or Revised Write-up:

Original

Group Number:

Contact No. and email of

Group Coordinator:

[email protected]

Group Members:

Sl
.
1
2
3
4
5
6
7
8

Roll No.
140101023
140101044
140103027
140103065
140103072
140103122
140103181
140201081

Name
Ankit Kaushik
Chandan Anand
Anushka Gulati
Gaurav Prakash
Himanshu Pathrana
Pooja Peswani
Vedant Arora
Mohit Nautiyal

Introduction
Google Inc. is an American multinational innovation organization spend significant time in Internetrelated administrations and items. These include online advertising technologies, search, cloud computing
and software. The vast majority of its benefits are gotten from AdWords, an internet promoting
administration that places publicizing close to the rundown of query items.
Google was established by Larry Page and Sergey Brin while they were Ph.D. understudies at Stanford
University. Together they claim around 14 percent of its shares however control 56 percent of the
stockholder voting force through supervoting stock. They joined Google as a secretly held organization
on September 4, 1998. A first sale of stock took after on August 19, 2004. Its statement of purpose from
the beginning was "to organize the world's information and make it universally accessible and useful,"
and its informal trademark was "Don't be evil". In 2004, Google moved to its new central command in
Mountain View, California, nicknamed the Googleplex. In August 2015, Google reported arrangements to
rearrange its hobbies as a holding organization called Alphabet Inc. At the point when this rebuilding
occurred on October 2, 2015, Google turned into Alphabet's driving backup, and additionally the guardian
for Google's Internet interests.
Rapid growth occurrence since the incorporation of the company, has triggered a chain of products,
acquisitions and partnerships beyond Google's core search engine. It offers online productivity software
including email (Gmail), a cloud storage service (Google Drive), an office suite (Google Docs) and a
social networking service (Google+). Desktop products include applications for web browsing (Google
Chrome), organizing and editing photos, and instant messaging. The company leads the development of
the Android mobile operating system and the browser-only Chrome OS for a class of netbooks known as
Chromebooks. Google has moved increasingly into communications hardware: it partners with major
electronics manufacturers in the production of its "high-quality low-cost" Nexus devices and acquired
Motorola Mobility in May 2012. In 2012, a fiber-optic infrastructure was installed in Kansas City to
facilitate a Google Fiber broadband service.
The world's online population will double to five billion by 2020 presenting "huge" business
opportunities for tech start-ups on the cutting edge of the unprecedented expansion, the head of Google
Europe said on Thursday. This is a transformational period producing a huge opportunity in front of
google.
"Five years where we'll go from a minority to a majority of the people on the planet being connected.
That's why the moment is now for start-ups to look up and out and think about that market of five billion

people that you can connect with in the next five years."
Google chose a renovated vodka distillery in a poorer area of the Polish capital for its first "campus" for
IT business start-ups in eastern Europe. The facility is one of five tech hubs the global IT giant has
created worldwide, with a sixth planned to open in Sao Paulo, Brazil, in the first half of 2016.Google,
which got its start in a garage, provides tech start-ups with low cost or free-of-charge spaces to meet and
work at the campuses, along with business mentoring.
Although Google is a search engine, it has also become a growth engine for entrepreneurs and for the
economy.
"Today we see millions of companies who are growing and exporting by accessing tools, talent,
technology, sales and distribution around the world. We call them the 'micro-multinationals'. Every startup can be global from its birth."

Industry overview
While Google is best known not for the free administrations it gives, for example, its web index, email
records, map application, Web program and new online networking projects, the organization's
gainfulness depends on Web promoting incomes. Those little promotions you see at the edge of your
indexed lists or Gmail record are a piece of a beneficial showcasing business for a great many clients of
Google items. The organization additionally has concurrences with substance makers, for example, daily
papers and bloggers to show Google-created promoting on outsider locales, with Google accepting a rate
of the income.
As Internet use increments all through the world, the Internet advertising space develops with it, with an
expanding number of organizations needing to achieve the blasting number of Internet clients. Google's
prevailing position in the business sector gives the organization favorable position. As indicated by
comScore, an advanced promoting insight examiner, Google's piece of the overall industry in the United
States among internet searcher suppliers developed in 2011 to more than 65 percent. So also, utilization of
different projects like the Google Chrome Web program and Gmail has extended following the
presentation of the administrations, getting to be vital players in their individual fields. Google's
promoting incomes rely on upon this vast and growing client base.
From its namesake web search tool, Google, Inc., has extended to incorporate various Internet properties.
A portion of this extension has been driven by Google's own particular engineers, who took off

applications, for example, SketchUp and Google+. Yet the organization has additionally been forceful in
getting rivals in media and promoting fields, for example, YouTube and the publicizing firm DoubleClick.
These new applications have reinforced Google's position as a noteworthy supplier of Internet substance,
growing Google's free administration offerings to a steadily expanding base of clients and publicizing
buyers.
Since its founding as search engine, the company has branched out to provide Web portal services such as
Webmail (Gmail), blogging (Blogger), photo sharing (Picasa), interactive maps (Google Maps), and Web
browsing (Google Chrome). In addition, its Android operating system is a platform for mobile and tablet
products; Google has also released an Android smart phone. The company sells digital content such as
apps, music, and movies through Google Play Store (formerly called Android Market).
Outfitted with its huge heap of money, Google continues becoming through the utilization of particular
acquisitions. In 2014 it got start-up Titan Aerospace, a producer of high-elevation rambles that can go five
years without landing or refuel. The organization will join Google's Project Loon, which is attempting to
convey Internet signs to parts of the world as of now logged off through high-height inflatables.
In 2014 Google acquired Nest Labs, an organization that spends significant time in rehashing gadgets in
the home, for example, indoor regulators and smoke alerts. Google additionally in 2014 grabbed Skybox
Imaging, a satellite imaging organization, for $478 million in real money. The organization gets ready for
that exchange to supplement Google Maps' exactness. Furthermore, Google in 2013 paid somewhat more
than $1 billion for mapping administration Waze. The arrangement kept Waze out of the hands of
Google's adversaries and gave it innovation that enhanced its route frameworks.
The organization finished its greatest securing to date in 2012 when it purchased telephone equipment
creator Motorola Mobility for $12.5 billion. The arrangement was a noteworthy marker that the
organization was moving its technique past its center Internet operations to expand its infiltration in the
quickly developing versatile business sector. The buy permitted it to better rival cell phone rival Apple by
supporting the appropriation of its Android portable programming. Be that as it may, in under two years
Google chose to leave the cash losing cell phone business. In mid-2014 it consented to offer Motorola
Mobility to Lenovo for $2.9 billion. The Chinese PC creator will possess the Motorola brand and its items
(the Moto X, Moto G, and the DROID Ultra arrangement), while Google will proceed to claim Motorola's
innovation licenses.

Googles Business Model

Google is a tech giant of this century, it is popular because of free internet search services which helps
users to get useful results as a response to their queries. Google keeps a vast index of websites and help
users search different types of content such as text, images, audio, video and maps. Googles respond to
the queries within milliseconds this is possible because of data centers. Google is estimated to have over
1 million servers in data centers around the world that process nearly 1 billion search requests every day.
Google has invested heavily in these data centers and managing their operations continue to be a key cost
element.
Google has expanded its portfolio through Gmail for free email services, Social Media services through
Google+ product. Google has developed an open source mobile software solution known as Android,
currently most of the phones in the world have Android as their operating system. Android can be used by
handset Manufacturer to install on their devices and by developers to create applications. Google has also
launched Chrome OS, and serves the enterprise market through hosted web based applications called
Google Apps. Google Apps include Gmail, Google Docs, Google Calendar, and Google Sites. People
need a browser and an Internet connection to use the Google Apps.
Google provides internet search services for free to its users and it makes revenues from advertisers who
are interested in communicating to its online users. Google helps advertisers create text based Ads
through its service called Google Adwords. These ads appear next to the search results. Most advertisers
pay Google on a Cost per Click (CPC) basis, which means advertisers pay when users click their Ads.
Google helps advertisers extend their Ad campaigns to the Google Network members websites through
its Adsense program. Google network members get revenues in return.

Google acquired DoubleClick, which provides display advertising solutions to help grow its Ads revenue.
Display advertising provides video, text and other interactive ads. These ads appear on Youtube, Google
Finance and Google Network member websites.

Consistently for several years Googles advertisement revenue has accounted for 96% of the total revenue
with its recent offerings like Android, Chrome OS it is trying to balance its revenue generation.

Googles Competitors

Google has many competitors based on the business. Googles core business is advertising and Facebook
has intruded the advertising business and it has grown exponentially. Facebook being a social media
website knows much more about the users ranging from birthdays, their likes, interests etc. which is
something Google is missing. Thus Facebook has the potential to create more customized ads and define
target groups for companies. Google knows your location and what you are searching for - a very
powerful knowledge set. However, Facebook knows your name, location, friends, family, relationship
status, birthday, and tons of your interests. The potential to place ads on other websites that target both
the nature of the site.

Facebook is also ripe to create a search engine that pioneers the concept of Social Search. The fact
that they have been unwilling to share their social data with Google points to their ambitions to create
a social search engine. Google recognizes that it needs Facebook's social data if it is to evolve
towards Social Search. If Google loses the Social Search battle, they will become a place to do
research and look up objective facts, whereas Facebook will be the search engine of choice for social
recommendations, including entertainment, health, dating, beauty, etc. Losing search engine market
share will have a heavy impact on advertising revenue. 1

In mobile business it competes with majorly with Apple. Apple was enjoying the monopoly in
smartphone market up until Google launched Android. Google through Playstore provided free apps to its
users while on Apples Appstore the apps are majorly to be bought. Also Apples iTunes took a major hit
when Google acquired YouTube, through YouTube users can browse through the digital content as many
times they want free of cost.

Emerging IT applications in the industry

1. Cloud Computing: Cloud computing offers 3 types of broad services mainly Infrastructure
as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).
Cloud computing has the following benefits

It reduces the cost of IT infrastructure cost to the company

Cloud computing makes maintenance of software and hardware easier as installation

is not required on each end users computer.

1 https://www.quora.com/Whos-Googles-main-competitor

2. Mobile Application: Mobile Application provides users strong power in the palms of the
user. A user can book a cab, order food and even buy a house through an application. This can
attributed to the growth of economical smartphones. Mobile application has potential to reach
people in every corner of the world.

3. Analytics: The field of analytics has grown many folds in recent years. Analytics is a
process which helps in discovering the informational patterns with data. The field of analytics
is a combination of statistics, computer programming and operations research.
The field of analytics has shown growth in the field of data analytics, predictive analytics and social
analytics.
Data analytics is tool used to support decision-making process. It converts raw data into meaningful
information.
Predictive analytics is tool used to predict future events based on current and historical information.
Social media analytics is tool used by companies to understand and accommodate customer needs.

Risk Evaluation and Updating I.T Strategy

Google generates 97% of its revenue by selling ads. It increases its reach by expanding its visibility to
users by providing services, creating more opportunities to show ads. It mines the user data which helps
in getting better consumer insights and have more targeted ads.

Risks Evaluation for Google Digital Strategy

I.

Forked Variants of Android Open Source Projects (AOSP)

Android is available in 2 forms-

Google endorsed android

Android Open Source Project
AOSP is a far freer version. In simple terms, it enables device makers to rip out Google services and
customizing the handset to run other software and services. Risk here for Google is that AOSP handsets
dont emphasize Google services. Since Google is not a hardware company, having its services center
around Android is an important way to get engagement and insights from mobile phone users which will
actually be driving the internet usage too in the future as desktops and personal computers take a back
seat now.
AOSP is not a threat to Google, but a cost of dominating mobile landscape. Only when AOSP can be
forked and combined it becomes a threat to Google. Forking android may be beneficial to companies like
Amazon or Microsoft.

a. Slowing Internet
Population Growth
Googles revenue are closely related to global
internet population. Today, as times evolve
and mobile browsing is able to reach more
masses, it is unpredictable how Google
business model will respond to this change in
the pattern. Google has not strategized any
monetization strategies for mobile focused services like Google Now. Googles revenue growth will slow
or decline if it does not switch to Apple like revenue model based on integrated hardware.

II.

Closed App Data

As we know, the digital world is evolving from web to mobile, with web browser forming only 20% of
the smart phone usage. On smartphones, Google has access to browsing data and location data of user, but
not to the activities that user does on apps. As more companies like Myntra are going for app only model
doing away with their websites based system in order to reduce there over dependence on Google

adwords insights. Thus it is a risk to Google that it does not have access to apps data and activities that a
user does on these apps.
Today, apps data is available to the followingApp publishers
Facebook which has an integration with upto 20,000 apps collects data from news feed integration
As more users move to smartphones from desktop, this could threaten Googles revenue model. Current
initiative from Google like Google Play Games syncs games data across devices. This initiative gives
google an insight into currently closed user data.
Google also has attempted to crawl in-app content and deep linking search results.

Till now, Google has relied on individual developers to examine app content. However, lack of scalability
to index app content could have a major impact and risk on the current business model.

Conclusion
From acquiring companies like smart thermostat maker Nest Labs to building its own robotic army, we
can say that Google is focusing its capital on four major verticals: wearables, the connected home,
automotive (connected cars), and robotics. Google is off to the right start in seeing the horizontal
opportunity, but focusing on vertical applications.
The implication here is that Google is building out its IoT product and service offerings before connecting
the dots between them. Wearables, connected home, and auto all stand alone now, but in the next few
years we will see more cross-pollination as the tech takes shape.
Gartner pegs the IoT services market at $230 billion by 2020, Velosa said, and Google has the resources
to potentially dominate in that market. The opportunity for Google is huge. According to Velosa, the
opportunity for Google in IoT is two-fold. New data will drive better advertising and drive new
businesses.
Better advertising will come from the data collected by connected things. Now that Google can tell not
only what products you own, but how you are using them, ads can be better tailored to your specific
situation. New businesses will spring from services offered, such as maintenance reminders, of connected
things.

Some of the pressing issues and questions which Google needs to answer are "How valuable is the data?
How do they reimburse enterprises when they get some of that data? Or, alternatively, will the enterprises
not let them get that data because it's more valuable to the enterprise to sell it itself?"
Google has always been forced to innovate on every front so that its software and services can thrive. By
2020, we shall witness some major innovations in both hardware and software fronts so that newer
business opportunities are created.

Proposed Digital Business Strategy of Google for 2020

From Gartners estimate, there will be 26 billion connected devices by 2020. As every product, service
and process becomes digitalized, the product cloud may become more valuable than the product itself.
The following are the six transitions which will shape the future landscape:
1. From Global to Personal
Digital makes the world a smaller place. We can access information about whats happening nearly
anywhere. Small companies can project a global image or customers can become manufacturers with 3D
printing. Robots, which are currently used as large machinery, will downsize. While it will take time for
small, personalized robots to run around our houses, smaller robots in peer-to-peer swarms may appear
in scenarios such as farming, where they can move through crops without harming the field.
2. From Hierarchies to Meshes
The rise of peer-to-peer everything means that we move from rigid relationships to fluid markets.
Architecture, organization, and information flatten, giving us more choices.
3. From Fixed Assets to Fungible (replaceable) Assets
People care less about a specific product or service (taxi or new car) because they have so many other
choices (ride share). In this environment, trust and reputation can be replaced with social
recommendations and standing.
4. From Devices to Connected Humans (and things)

Today we live in a device world. However, we will rely more on the connectivity in any form, including
embedded into humans themselves. It should be noted that only a portion of people will want to take it
this far. For the most part, we will look to personal assistants who understand us better and can provide
contextually sensitive information.
While some question whether we will fully trust machines to carry out many of our tasks, Mr. Prentice
noted, You trust GPS to guide your car, even though it may take you the wrong way down a one-way
street at times.
5. From Big Data to Algorithmic Business.
With billions of connected devices and things, the analytics of the vast amount of information becomes
more important. Organizations and people will question who has access to the data and how they use it.
This is especially the case as we move to sensor networks, quantified self and advanced analytics.
6. From Resources to Smart Materials
Well build new materials using smart fabrics, memory materials, graphene, polymers, and nano
composites. Here, material science becomes increasingly important.
Keeping in mind these developments over the next few decades, Google has focused its strategy on three
different areas, Cloud, IoT and Apps.

Googles Cloud Strategy

While Googles ability to scale promises to steal away some market share from public cloud leader
Amazon.com, scaling alone doesnt offer a clear differentiator. After all, Amazon as well as cloud leaders
Microsoft, IBM, and others also understand this fundamental cloud principle.
Amazon, however, does have an enterprise weak spot: its digital strategy. While Amazon doubles down
on its technical capabilities, Google is also deepening its tech credentials while simultaneously moving
toward improving the user experience at the heart of digital initiatives.
In fact, in many cases marketing is responsible for enterprise digital efforts, as marketing has historically
been responsible for interactions with the customer. As a result, targeting the priorities of the digital
marketing professional is an important enterprise differentiator for Google.

Other cloud providers have various big-data-as-a-service offerings as well, but Google has excelled at
tying the value of this platform to the customer-centric goal of the digital marketer providing a solid
entry point for the enterprise customer as well as an important leading use case for the BigQuery
platform.
Google is reinventing enterprise technology for the cloud-enabled digital era. Today, the nature of work
itself has transformed. Shifting technology choices reflect this transformation, and Google has the
foresight to lead the enterprise rank and file to this new vision of work at web scale.

Googles IoT Strategy

The opportunity for Google in IoT is two-fold. New data will drive better advertising and drive new
businesses. Better advertising will come from the data collected by connected things. Now that Google
can tell not only what products you own, but how you are using them, ads can be better tailored to your
specific situation. New businesses will spring from services offered, such as maintenance reminders, of
connected things.
Another big opportunity for Google is the capturing of the global IoT market. While there are a ton of
players in IoT, the majority of them aren't equipped to roll out new products and services globally and
scale their businesses accordingly. Google, however, is equipped to do so and could capitalize on that
advantage.
Google does face its share of challenges in implementing an IoT play. The first of those challenges is in
the monetization of the data created and collected by devices in an IoT ecosystem.
Data, at least, is Google's sweet spot. Hardware, however, is far from it. And that presents another
challenge. Hardware is a limiting factor and Google will need to invest in it, at least in the interim, to
make sure their services work well in the future. The company has been forced to innovate on that front
so that its software and services can thrive.
Even if Google can take advantage of the opportunities and quell the issues of data value and hardware,
there is still the question of when IoT will come into its own. As it stands, IoT is still a concept that has
yet to become a reality, but that doesn't mean it won't become a major profit center for Google in the
future.

Googles Apps Strategy

This digital story begins with mobile application development. They arent only mobile, theyre social,
theyre real-time, theyre connected, and theyre incredibly difficult to create and manage.
By easing the creation and management of such digital apps, therefore, Google is hoping to gain traction
with both the enterprise digital professional as well as the enterprise developer. Google realizes, however,
that theres more on the digital professionals wish list than mobile apps.
Mobile apps or app development in general are important to digital marketers, of course, but for
Google, the digital marketing entry point is Google Analytics, the free widget that tracks web traffic on
hundreds of millions of web sites around the world.
Google Analytics, however, is simply the tip of the iceberg. Under the water line sits BigQuery, Googles
massive big data platform they deliver as a cloud service. Combine BigQuery with Google Analytics and
you get Google Analytics Premium, an enterprise-class digital analytics tool that sits at the center of the
digital transformation storm.