What is this question about?
As a product manager, one of your responsibilities is to grow your product’s revenue and market share. This product strategy interview question is testing whether you can think strategically about how to go about it.
What is the interviewer looking for?
The interviewer is evaluating you on the following:
- Are you knowledgeable about growth strategies?
- Can you think critically about what strategy could be the most fruitful given the business objective, the current product performance, the market, competition, and trends?
- Can you answer the question in a structured and organized way, or do you shoot from the hip and do so without taking a moment to think about the question?
- Do you have original ideas?
- Are you articulate or do you tend to ramble?
How to structure your answer?
- Talk about the product’s strengths and weaknesses relative to competitive products.
- Who are the market leaders in this market?
- What are the market and technology drivers?
- Given the competitive state and market drivers, suggest growth strategies that touch on these points. Examples of some growth strategies are: growth by offering additional products, growth by strengthening the product’s competitive position, and growth by expanding to related or new markets organically or via acquisitions.
- Summarize the opportunities for growth and your recommendations on how to exploit them.
A recommended book to learn more about product strategy is Product Strategy for High Technology Companies by Michael E. McGrath.
INTERVIEWEE: Okay, before brainstorming about possible ways to grow revenue and market share for Google Cloud, I would like to first talk about the competitive landscape and market trends. Understanding how competition plays will help in identifying possible vectors of differentiation that Google can leverage to spur growth. And, identifying market drivers will help in identifying opportunities of adjacent or new markets to enter.
Amazon AWS, Microsoft Azure and Google Cloud are the top players in the cloud computing market. As a first mover, Amazon has had the advantage of time; AWS market share is multiple times that of Azure and Google Cloud Platform, so that is a challenge.
Amazon has the richest and most extensive IaaS and PaaS capabilities of the three. Its strengths are in deep user management capabilities; an ecosystem of open source tools which has attracted thousands of ISV partners; a network of partners that provide application development, managed and professional services; and training and certification programs. Where AWS has weaknesses is in its complex pricing model, which is too granular, and expensive customer support.
Microsoft Azure, second in market share, has several strengths: seamless integration with enterprise on-premises infrastructure, development tools, open source technologies, competitive pricing, and a large number of existing customer relationships. But in addition to not having a complete cloud solution as AWS, Azure is not very strong in API enablement, and lacks partners in managed services and professional services that have enough experience with Azure.
Google’s strength lies in its expertise in developing and managing cloud-native applications, analytics and machine learning as well as fast virtual machine provisioning and simpler billing. Google has room for improvement in a few areas though, such as user management to provide organizations more granular and customizable access control; the need for a marketplace to license third party software and the need to increase its efforts in sales, marketing, globalization and partnerships.
Let’s talk about what is driving the cloud computing market growth.
IoT security needs will be on the rise and cloud computing solutions for this type of security will be in demand. Last year’s Dyn incident, where IoT devices were used to orchestrate a distributed denial of service (DDoS) attack on a Dyn DNS server that supported major commercial websites (Twitter, Pinterest, Reddit, Github, Spotify), shows that IoT device makers and service providers will have to increase their investment in IoT security solutions.
Data Mining and query services for vertical industries will be on the rise. Industries such as healthcare, government, finance, retail and weather forecast will look for ways to optimize customer service and operational efficiencies by adopting intelligent services that can uncover patterns, provide predictions, and answer complex questions that can only be done with advanced big data analytics technologies.
AR and VR applications will be on the rise not only for the Entertainment and Gaming market but also for the Education and Training market. These types of applications will demand vast cloud computing resources.
Advanced online collaboration tools and features will be on the rise as the number of people working in separate locations becomes the norm. This will drive the need for cloud solutions that enable deeper online collaboration. Google already has put a stake on the ground with Google Suite, and it should continue to innovate.
Ideas for Growth
Now that we have looked at the competitive landscape and market trends, I would like to brainstorm ideas for growth. I think Google Cloud should follow growth strategies based on competitiveness, acquisitions, and innovation.
Growth Based on Competitiveness
Growth could be achieved by playing on Google’s competitiveness along its key differentiating technologies. One such technology is its enterprise APIs. The acquisition of Apigee was a step in the right direction; it put Google ahead of AWS and MSFT in the API software integration space. Google should continue to expand features on these platform or acquire additional startups in this space.
Google could also use its differentiated technologies like Machine Learning, AI, and VR/AR to expand into related markets. For example, it could expand into the AR/VR Training and Education software market by leveraging its strong relationships with schools and universities.
Google is one of the few large technology companies that has the computing power to provide data mining and query services that vertical industries with huge Big Data needs can benefit from. In healthcare, Google is already partnering with schools such as Stanford Medicine to provide a genomics service mostly for research, but it should try to expand the service for commercial purposes. Microsoft just announced its Healthcare Next initiative to bring AI to doctors and hospitals, and Google should do the same.
Partnerships are one of the weak points of Google Cloud. Partnerships with application developers, managed services and professional services are key to growing the number of customers. More investment in these efforts is needed. Furthermore, to be able to increase the number of enterprise customers, it needs to have an application marketplace, just like AWS and Azure has.
And given that AWS and Azure are complex platforms to develop on and manage, Google could strive to provide ease of use and training programs to evangelize its platform to customers and developers.
Growth Based on Acquisitions
As IoT security becomes a critical issue for all enterprises, Google should start working towards becoming the leader in this space. Acquisitions in this space would make it faster to acquire the technology and skills in IoT security, which would also help promote Google IoT related businesses like Nest, Android Wearables and Google’s driverless technology.
Growth Based on Innovation
Advanced online collaboration is an interesting market too. Google dominates in the Education space with Google Suite, and the SMB space, and needs to grow its enterprise presence. The online collaboration market, however, is a more mature market and growing slower than other markets. I think growing this market through product innovation, customer relationships and partnerships, as opposed to acquisitions, would result in a better bang for your buck. Acquisitions are expensive and I don’t think this market is growing fast enough to offer a quick return.
In summary, I think Google Cloud can grow revenue and market share through strategies that include competitive differentiation, acquisitions, partnerships and innovation. In particular, Google could leverage its strengths in Big data analytics, machine learning and AR/VR, to expand into related markets like Education & Training, industry verticals such as Healthcare, Finance and Government. Acquiring selective startups in IoT security would strengthen Google’s leadership in this market, which is likely to grow rapidly. And, it should continue to innovate in the online collaboration space. Of course Google should continue to acquire technologies to catch up with Amazon’s offerings, but faster growth will come if Google leverages its differentiating technologies and skills to become number one in areas of cloud computing that its competitors can’t easily copy.