Reference no: EM133373852
Case Study: Managing In The Digital World: From Google to Alphabet
Nearly everyone in the entire world knows a few global brands such as Apple, Coca-Cola, Samsung, and Toyota. Another powerful brand, Google, has become known around the world for its ubiquitous search engine (Figure 3.1). But Google is much more than a search engine. Google has very diverse interests, from driverless cars and other technologies to life sciences, investment capital, and space exploration through investments in SpaceX. Given this diversity, many things that Google was exploring didn't fall neatly under a search engine company, not to mention spending billions of dollars on many "blue ocean" R&D projects that were not always viewed favorably by investors. To make the point that Google is interested in far more than search engines and to help sharpen the focus of the various Google-owned companies, a holding company called Alphabet was created. This giant restructuring of the Google empire has placed 13 companies under the Alphabet umbrella (in early 2020) and allows Alphabet to have different types of companies, allowing investors the choice of investing in Alphabet or in one of the subsidiary companies that are publicly traded.
With this move to Alphabet, it has become much easier for investors to understand the Google business model and how each of the various companies (often referred to as "Other Bets") are contributing to (or harming) Alphabet's bottom line. For example, Alphabet owns the artificial intelligence business DeepMind, life sciences company Verily, and autonomous driving company Waymo. With the restructuring, financial reporting shows where revenue is generated and where investments in new ideas are made. Investors are thrilled with this new transparency, and many feel that Alphabet will be more disciplined about where it will place investment bets as successes and failures will be more visible and tightly associated with a particular company.
Alphabet is now one of the biggest companies in the world. For most of us who use Gmail and Google Docs or watch countless YouTube videos, the shift to Alphabet won't even be noticeable. However, for those in the business and technology world, they better take notice! Google's founders Sergey Brin and Larry Page don't want to relax as simply the giants of online search; they have "always strived to do more, and to do important and meaningful things with the resources [they] have" (Page, 2015) Alphabet is not intended to be a big consumer brand; the intention is for the various Alphabet companies to be independent and develop their own brands and innovations. This way, the likelihood of finding the next new idea that can change the world is much higher.
Brin and Page believe that large companies get comfortable with their success and business model. Both want to continue to innovate and create inventions that can transform the world. For now, Google's search engine is bringing in most of the revenue and is highly profitable. But these tech pioneers are looking toward the future, aiming to take a long-term view and "improving the lives of as many people as [they] can" (Google, n.d.).
Clearly, Alphabet is about more than search engines, and its founders are about more than resting on prior accomplishments.
Questions: Answer the following questions
- How does Google benefit from a well-functioning infrastructure?
- What are the major components of Google's infrastructure?
- What are the factors organizations should consider when building on infrastructure provided by Google?