His top-to-bottom overhaul included a ramp-up of Google’s salesforce and focused on core infrastructure, data analytics, cybersecurity and industry-tailored products and services.

Google Cloud is gaining influence in the enterprise space.

The Home Depot started working with Google Cloud in 2016, when it decided to migrate its on-premises ecommerce site to the cloud. It moved its legacy data warehouse into the cloud provider’s BigQuery two years later. During those years, it saw firsthand the “growing pains” of being an early Google Cloud adopter.

“Most notably, I remember their approach to terms and conditions, customer engagement practices,” said Daniel Grider, the chain’s vice president of Technology and head of Infrastructure and Operations. “They were just not adaptable to the enterprise customer like The Home Depot.”

Fast forward to 2022, and Grider cited a “drastic” change for the better after Thomas Kurian’s three and a half years as CEO of Google Cloud, which today remains the company’s preferred cloud provider as it continues migrating workloads from its “legacy debt” accumulated over decades to Google Cloud Platform (GCP).

When asked himself if Google Cloud is enterprise-ready today, Kurian told Protocol that customers such as The Home Depot — which extended its run with the cloud provider last July — are validating its arrival as an enterprise-worthy cloud contender.

“Given the number of very large customers — from stock exchanges to large telecommunications companies, to big banks, to hospital systems, manufacturing companies — that are running large systems and using our cloud to run the core parts of their business, I would say yes, the answer is yes,” Kurian said. “We've really, really transformed, and most of our largest customers have been super successful in adopting and using cloud through the work they've done with us.”

Count KeyBank among the Google Cloud customers that are convinced.

“We certainly view GCP as an enterprise-ready marketplace in cloud, or we would never be in the process of moving our workloads,” said Keith Silvestri, chief technology officer at KeyBank, which this year started a three-year migration from its on-premises data center to GCP. “From a maturity perspective, from production support, from the investments they make in security, through how they're organized, absolutely.”

Google Cloud’s annual revenue has jumped approximately 230% under CEO Thomas Kurian's tenure. Photo: Google

A former Oracle product development president, Kurian had an enterprise-oriented mandate from his start in January 2019, and took a three-pillar approach to reshaping Google Cloud as an open-source, hybrid and multicloud provider. That included sharpening its strategy by focusing on infrastructure, data analytics, cybersecurity, collaboration and communication, as well as industry-specific products and services; installing the people, systems and processes needed to execute the vision and support growth, including a tripling of its salesforce; and transforming its culture.

“All three had to come together in order to make us successful,” Kurian said. “There's always more to be done at all times, but clearly we've had a lot of success these last three years, and credit to our teams that did all the work.”

With new customers including Deutsche Bank, Ford Motor Company, Mayo Clinic, Univision and the U.S. Air Force, that success is showing up in the top line. Google Cloud’s annual revenue — which includes GCP and Google Workspace, its cloud-based productivity and collaboration tools — has jumped approximately 230% under Kurian to $19.2 billion in 2021, with GCP outpacing Google Cloud’s overall growth. In April, it reported first-quarter revenue of $5.8 billion, which was just about $17 million shy of what Google Cloud generated for the entirety of 2018 and puts it on track for a $23.3 billion annualized revenue run rate this year.

While Google Cloud continues to operate at a hefty loss — $931 million as of the end of the first quarter — parent company Alphabet has signaled it’s taking a longer-term view when it comes to the division's profitability, with plans to continue investing aggressively given the sizable cloud market that it sees. Though Google Cloud remains a distant third to AWS and Microsoft Azure in the cloud computing race, with a 10% share of the worldwide cloud infrastructure services market, according to Synergy Research, that’s up from 7% in 2019, and there’s plenty of room for further growth.

Wedbush Securities estimates that only approximately 44% of all enterprise workloads have moved to the cloud. Google Cloud also has a sizable revenue backlog: In April, Alphabet reported $50.5 billion in future customer contract commitments primarily related to the cloud business.

Kurian has put Google Cloud “truly on the map,” said Tom Galizia, global chief commercial officer of the Alphabet/Google practice at Deloitte Consulting, a global systems integrator and Google Cloud’s largest go-to-market partner.

“You don't go from $5 billion [in annual revenue] to $20 [billion] in three years and not get to claim that,” Galizia said. “He brought a rigor around enterprise and industry-based selling. He continued to shore up and build on the technical footprint that was already there. I also think he has taken a North American cloud company to the world. It is an enterprise global alternative that is formidable, and for the right clients in the right industries, it is absolutely the right answer.”

Prior to Kurian’s arrival, Google Cloud had been trailing or was on par with now fifth-place IBM when it came to cloud market share. It wasn’t competing aggressively enough to win the lift-and-shift core infrastructure business that was going to AWS and Microsoft Azure, and had a reputation as an organization that was more interested in convincing customers to do things Google’s way than learning what they really needed.

Embarking on its new strategy, Google Cloud’s first step was on the product side, allowing its engineers to build, mature and differentiate core services, Kurian said. He also took on Google Cloud’s previously freewheeling internal culture.

“Google had a very strong engineering culture,” he said. “We needed to add to it this focus on the customer and make a lot of our innovation be customer-driven. We spent a lot of time talking through and helping each part of our organization understand how the technology that they're building, how the role they have — whether it's in data center operations or sales — eventually meets at the customer, and how [we are] making the customer successful.”

On the business side, Google Cloud had to pick countries where it would scale its sales and distribution organization and settle on how it would approach enterprises differently than younger, cloud-native technology companies.

“You need not just sales and technical engineers, but also professional services, customer support,” Kurian said. “And along with that was being very clear with our partners: how do we work with partners, because they're a big part of the ecosystem when you're working in enterprise.”

Kurian is referring to the company’s channel partners — the systems integrators such as Deloitte, resellers and managed service providers that sell Google Cloud and wrap their own products and services around it — along with independent software vendor partners. In early 2019, Google Cloud committed to having a partner involved in every one of its deals.

To help execute its new game plan, Google Cloud hired senior leaders such as nearly 27-year SAP veteran Robert Enslin, who joined in April 2019 as global sales president. Enslin, who left Google Cloud this year, helped build out its sales organization by geographic regions and industries with recruits from enterprise players including AWS, Microsoft, SAP and Oracle.

We had to build many functions that did not really exist before.

“We had to build many functions that did not really exist before,” Kurian said, “whether that's a commercial legal team to negotiate contracts … customer service, etc. To support them, we had to put in place many systems: contracting, ordering, forecasting, customer service systems, revenue recognition — all of the underpinnings that make these people productive.”

Core business processes had to be transformed, according to Kurian, from how customer support requests and premium support would be handled, to forecasting and how salespeople entered orders, to the system for helping partners drive deals with Google Cloud.

One of Kurian’s most impactful moves was establishing the Google Cloud Customer Advisory Board in early 2020 for 50 of its top customer CIOs and CTOs to provide feedback across its business and technology strategy, said Grider, who now sits on the board, which Kurian chairs.

“This has proven to be a successful mechanism to hear directly from strategic customers about their needs, their friction points and what's most important to them,” Grider said. “I appreciate the fact that Thomas personally attends every one and engages. Feedback is a gift, and providing that type of forum to solicit it is one that Google has shown a heavy interest in, and it's making a difference.”

Grider also appreciates Google Cloud’s willingness to develop products in conjunction with customers.

“It's not a typical situation where we say, 'Here's our pain point,' and then [they] come back with a solution,” he said. “We work directly with them. Thomas has impacted that ability from a product offering — that the customers have a front seat at what that looks like. And being in retail, we can appreciate that.”

Since Kurian came on board, the biggest change for Google Cloud’s Office of the CTO has been “making sure that we were involved not just with enterprises directly, but also fostering connectivity, architecture and approaches that were inclusive of the ecosystems and partners that those organizations already maintained,” Chief Technology Officer Will Grannis said.

The Office of the CTO also plays a larger role today in “emerging themes,” ensuring Google Cloud’s road map and investments are well-tuned over time so the cloud provider can meet customers where they want to be in the future.

“In the past, I would say about 60[%] to 70% of our function focused on deep technical advice to the world's top brands,” Grannis said. “That advice is still critical, but we kind of flipped to where now about 60% of our time is spent synthesizing the signals we get and making sure those signals are really strong for our internal engineering and product teams and for the cloud leadership team so that we might embark on more forward-looking endeavors that are multiyear and very strategic versus doing things just for one customer.”

Cloud computing today is about transforming almost every aspect of an enterprise organization and how it operates, Grannis said.

“The shift that you've seen from us in terms of [a] product road map that goes from core compute and storage to a more fully fledged analytics platform, to open architecture and multicloud platforms, to even just refinements in our Workspace products and rounding out our security portfolio — all of that is matching this wave,” Grannis said. “A full partnership requires a full set of capabilities.”

Infrastructure, data and analytics, and cybersecurity are typically the top three reasons why organizations choose Google Cloud, according to Kurian.

At the Google Cloud Next conference in April 2019, in his first major address to partners and customers, Kurian heralded Google Cloud’s embrace of multicloud with the launch of Anthos into general availability.

“You can build applications that can co-exist across clouds, you can do analytics that span data that sits across clouds, you can use our machine-learning tools to access information and get better insights from data and inference across clouds,” Kurian told Protocol. “That was not possible before then. It's become almost a norm now in large companies, where they want to use the best of the best from different cloud providers.”

Based on Google Kubernetes Engine, Anthos is a managed hybrid and multicloud platform that allows customers to build and manage applications across Google Cloud, in their own data centers and in third-party clouds, including those of rivals AWS and Microsoft Azure.

Major League Baseball uses the open architecture enabled by Anthos to run applications on bare metal in ballparks as well as on clusters in the cloud. HSBC, one of the world's largest banks, is using Anthos across an infrastructure that includes thousands of applications and global regions in a highly regulated industry.

Infrastructure, data and analytics, and cybersecurity are typically the top three reasons why organizations choose Google Cloud, according to CEO Thomas Kurian.Photo: Google/Weinberg-Clark Photography

“Those pathfinding activities have been critical to the growth of Anthos and, in my opinion, the growth of multicloud as an architectural pattern that more and more people are embracing,” Grannis said.

BigQuery Omni is an example of how far Google Cloud is taking its multicloud approach, according to Grannis. The analytics tool, which allows users to access and securely analyze data across clouds, is built around BigQuery, the 11-year-old serverless data warehouse that’s the centerpiece of Google Cloud’s data and analytics suite. BigQuery Omni, which runs on Anthos clusters, became available for AWS and Microsoft Azure last October.

“We're the only cloud that I'm aware of that purposefully enables computation and analytics over other public clouds,” Grannis said. “That's a pretty big indicator of how committed we are to multicloud. We embed our values and principles in our engineering, and one of our values and principles is that people should be able to run any shape of compute the way that they want it.”

Google Cloud also strengthened its analytics and data warehouse capabilities with its $2.6 billion acquisition of Looker, a multicloud business intelligence software and big data analytics company, in early 2020. Looker has since introduced new integrations with the Google Cloud portfolio, including Connected Sheets and Data Studio in April, as well as with Salesforce’s Tableau, whose business analytics software helps users visualize and understand data.

Other acquisitions have helped fill holes in Google Cloud’s security portfolio amid more rampant cybersecurity attacks.

In January, Google Cloud disclosed its purchase of Israeli startup Siemplify, a security orchestration, automation and response provider, for a reported $500 million, and said it would integrate its capabilities into Chronicle, its security analytics platform.

Using Chronicle and GCP, payments company NCR — a point-of-sale digital banking customer — can look over two years’ worth of security-related data in a matter of minutes, according to Grannis.

“Being able to crunch that much data in just a few minutes was really a game-changer,” he said. “That's enabled not only by an intelligent security approach from Chronicle, but also the scale-out infrastructure nature and the integration of those two things.”

And then in March, Google Cloud announced a $5.4 billion deal to acquire Mandiant and its extended detection and response SaaS platform to help round out a “full-service” approach to security that, in addition to Chronicle, also includes Google Cloud Armor, its network security service that provides defenses against DDoS and application attacks, and BeyondCorp Enterprise, its zero-trust identity and security platform.

“Today, the challenge most organizations have is they don't have the capability to understand what occurred to cause a cyber breach, analyze which of your systems have been compromised, remediate that through workflow and then test whether you, in fact, are secure,” Kurian said. “We realized in the front, we needed really great threat detection and response capability. Mandiant brought us that.”

Developing industry-specific products and services tailored to customers in 10 areas — consumer packaged goods, financial services, gaming, health care and life sciences, manufacturing, media and entertainment, public sector, supply chain and logistics, retail and telecommunications — has been a big part of Google Cloud’s enterprise push under Kurian. They range from Lending DocAI, which is designed to reduce the time and cost of closing loans for the mortgage industry by automating mortgage document processing, to Supply Chain Twin, which allows companies to build a digital twin or virtual representation of their supply chain for better visibility.

Kurian has been pretty focused on repeatability: how Google Cloud can drive systemic change through an entire company or industry rather than one-off, bespoke, uniform-like programs, Galizia said.

When Carrie Tharp joined Google Cloud as vice president of Retail and Consumer in August 2019 from Neiman Marcus Group, “it was a little bit of what I call, from my industry experience, kind of the bright, shiny object syndrome of, ‘Hey, can Google do something cool for me in this space?’ and TBD if that was scalable or sustainable to do from a partnership perspective,” said Tharp, a former chief digital and marketing officer for the retailer. “We really evolved … to driving true large-scale, across-the-value chain transformation.”

Retail is one of Google Cloud’s largest and fastest-growing industries drawing in customers, many of whom eschew AWS because they view its parent company, Amazon, as a competitor.

Retail Search, which became generally available in March, gives retailers the ability to provide Google-quality search capabilities to customers using their websites and applications. It uses Google technologies that understand user intent and context to improve the shopping experience. When a customer searches for a red dress with lace, for example, red dresses with lace appear at the top of the search results.

These targeted, industry-specific products comprise one area where that work with customers pays dividends: The Home Depot helped Google Cloud build Retail Search.

“A reduction in our secondary queries has been drastic as a result of the retail search problem that we put in front of them to help us solve,” Grider said. “And we continue to refine that based off their team and our team of data scientists.”

Retail Search also is an example of Google Cloud’s progress in bringing the power of Alphabet to enterprise customers, capitalizing on assets such as Google’s search and digital advertising capabilities or Waymo’s autonomous vehicle work.

KeyBank worked with Google Cloud on Anthos, and eliminating all paper from banks and reducing fraud are two other challenges they’re considering working on together, according to Silvestri. A key part of why the relationship works, he said, is that as Google Cloud created its industry-specific services, it hired people who had worked in those industries — in this case, people with financial institution experience.

“You're talking to someone who actually understands banking, which is a heck of a big importance to me,” Silvestri said. “We've already got a basis and the foundation to work on.”

When Enslin left Google Cloud in May to become co-CEO of UiPath, Google Cloud decided to streamline its sales and customer success organizations to consolidate points of contact for customers. It unified sales, technical account management, professional services and customer success personnel under two teams: Kirsten Kliphouse leads the Americas team, and Adaire Fox-Martin heads the team covering Google Cloud’s other international territories. The move was prompted by feedback from customers and partners, according to Kurian.

“When we started in 2019, we were largely focused on acquiring customers,” he said. “As we have ramped [up] our business, increasingly the sales organization that's working with the customer to identify new opportunities in the account, and the customer success team that ensures the projects are going well and the team that works with partners like Accenture, Deloitte, etc. all need to come together. They all need to work in one coherent fashion, right at the point of client engagement.”

Google Cloud’s biggest challenge right now is expanding globally, according to Kurian. The cloud provider has announced 19 new cloud regions since he joined. It currently has 34 regions with 103 zones and 147 network edge locations, with availability in more than 200 countries and territories. Additional cloud regions are forthcoming in Berlin; Tel Aviv; Dammam, Saudi Arabia; Doha, Qatar; and Turin, Italy.

“Obviously, we have a certain size and scale,” Kurian said. “There's a lot of work going on to expand both our data center footprint around the world as well as our sales, distribution and service organizations. There's a lot more geographies that we want to go to, in addition to expanding in our core geos, whether that's the U.K., France, Germany, United States, Canada, etc.”

Deloitte’s Galizia believes that Google Cloud needs to make it easier for customers to buy and adopt its technology.

“A lot of Google technology is in modules, and you have to kind of assemble the modules together to get the business value out of it,” he said. “But enterprise clients want an ‘easy’ button to buy a solution, and so I think there's still room to work on that.”

There’s also the matter of Google Cloud’s operating loss, which stood at $4.3 billion when Kurian became CEO and ballooned to $5.6 billion two years later, primarily due to compensation expenses for newly hired engineers and product managers. That loss was cut to $3.1 billion by the end of 2021 thanks to 47% year-over-year Google Cloud revenue growth and Alphabet’s decision to extend the operational life of its servers and certain network equipment by a year.

Like many tech executives, Alphabet CEO Sundar Pichai and Chief Financial Officer Ruth Porat have said it’s early innings for the cloud, and the company remains committed to a longer-term path to profitability, with increased scale expected to erode the losses over time.

“It's a massive growth expansion opportunity for them,” Galizia said. “The key right now is how do you drive the $51 billion backlog to consumption in a thoughtful way that drives enterprise value for clients. And when they do that, I think you're going to see the profitability engine kick in pretty directly.”

“When I look at the innovation and the product pipeline and the overall demand we are seeing and how early our journey is, there's definitely a lot to look forward to,” Pichai told analysts during the first-quarter earnings call in April. “Overall, the execution has been great. We are scaling up, particularly in our go-to-market … and I think that will play out well.”

Galizia was more concerned about Alphabet giving up on Google Cloud five years ago than today, he said. He believes Alphabet now is committed because of the sheer amount of capital it’s invested.

“They're so deep at this point in the investment, I don't see them coming out of this one,” he said. “I think they're very excited about the success of the business that they've had … Think about this: Google Cloud is starting to rival even the size of YouTube. It's pretty amazing in a very short period of time.”

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Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Shopify is letting merchants use NFTs for their customers to unlock special products, perks and experiences.

The idea is that NFTs are a kind of loyalty card that a brand’s top fans can use to access exclusive items.

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

Despite the crypto crash, Shopify is betting that NFTs will change the way people shop online and in person. The ecommerce giant has a new service to enable customers to use NFTs to unlock special perks, products and real-world experiences with merchants.

Last year Shopify added the ability for merchants to sell NFTs using Shopify so customers don’t have to go to another site to buy them. With this new product, Shopify is taking that a step further through what’s known as “token-gated commerce.” The NFTs can come from anywhere the merchants want.

The idea is that NFTs are a kind of loyalty card — in the form of a cryptographic key — that a brand’s top fans can use to access exclusive items.

The current crash in the crypto markets has hit NFTs as well. But Alex Danco, head of blockchain at Shopify, says he is excited about the current market because it removes distraction and is good for focusing on actual ways NFTs can be used to help merchants and decreases the interest in pure speculation.

As a result, merchants aren’t shying away from NFTs, Danco said. “If anything, it's the opposite, right? The fact that this is very clearly not about ‘double your money in the next week or whatever by NFTs.’ The fact that it's not that anymore is actually a great sign for real businesses and real brands.”

Some retailers are dubious, but Danco believes crypto wallets and NFTs will be a big benefit for merchants, once he persuades them to “wander into something that is so drowned out by noise of all of the speculative mania.”

The biggest benefit of crypto and NFTs is crypto wallets, he said. “Everybody sort of jokes about ‘This is a big bubble and it left behind no infrastructure.’ It left one very, very important piece of infrastructure: Everybody has a wallet now.”

The NFT can also be used in person. Shopify tried out the product with Doodles, a popular NFT project, at this year’s South by Southwest. Doodles NFT holders could buy exclusive merchandise or access a Doodles experience at the show. At the NFT.NYC conference this week, NFT project Cool Cats is using Shopify to offer access to special products for token holders.

One other use of NFTs is collaborations between brands, especially between Web3 and non-Web3 companies, Danco said. Superplastic, a toy company, partnered with Bored Ape Yacht Club to create toys for ape holders. Gucci also recently collaborated with Superplastic.

Danco sees this as akin to an old, famous band and a new, popular band playing a show together and sharing fans. NFTs enable that kind of experience, he argues. ”The funny thing is, it's very hard to authentically do these kinds of exclusive collabs online where people invite each other in. But what people are seeing as token gating is actually just perfect for this.”

He believes companies will move beyond simply using an NFT to buy a product, but that is the easiest way for companies to get started. Danco also sees app developers that build on Shopify adding many more uses for NFTs. “I have an inside view of what some of these app developers are doing in the pipeline, and it's gonna be nuts,” he said.

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

Internet for Growth, an initiative of the Interactive Advertising Bureau, supports the transformative role the advertising-supported internet plays in empowering America's small businesses, helping entrepreneurs bring their ideas to life. Supported by a diverse community of over 700 IAB members including marketers, agencies, publishers, platforms and ad tech providers, as well as hundreds of small businesses and creators, Internet for Growth highlights the benefits the internet delivers to local economies, expanding opportunities for innovators to reach markets far beyond their neighborhoods. Their work ensures people understand the limitless opportunity the internet provides for creativity and commerce, fair competition, and connecting with consumers on mutually shared values and interests, no matter the background or geography.

Smaller companies like ours are buckling under the weight of unprecedented price increases, supply chain shortages and rising labor prices. To increase our marketing reach on a slim budget, the internet is our best option. Internet marketing is critical to the survival of our business. It's one of the most affordable, effective forms of marketing at our disposal.

Limiting our options will only hurt us at a time when we need every opportunity possible to stay in business. Small companies like ours are competing with much larger competitors to reach the same customers in a busy, crowded space.

How many Valpaks, grocery store flyers and random postcards from local businesses have you discarded in the last month? We’re all overloaded with physical junk mail. Even if an offer catches our eye, there’s no instant online access or interactivity. Generational shifts have also impacted marketing. For younger generations, digital media is a part of everyday life. How they shop, date and travel: It’s all digital. For most of our customers, shopping online is the norm, and their payment choices are digital too, including at pop-up and live events. The digital economy is a way of life and here to stay. Congress needs to be careful tampering with digital advertising tools that Pot Pie Factory needs to stay in business.

Over 100 years in business, Virginia Diner has learned and shifted approaches to advertising through changing times and overcome inevitable hurdles.

The idea that politicians could restrict cost-effective online advertising and marketing is daunting. These laws could potentially cripple the way small companies like ours do business in this ever-evolving digital age.

The recent pandemic was devastating for many brick-and-mortar small businesses relying on in-person transactions, especially those in remote, rural areas like ours in Wakefield, Virginia. E-commerce was a lifeline. As consumers spend more time online, they also demand goods be delivered directly to their doorsteps, quickly. Targeted, tailored advertising has become a critical tool for Virginia Diner to identify and serve customers, maintain growth and stay viable in a rapidly changing marketplace.

Traditionally, our core business had been wholesale, with retailers selling our products in brick-and-mortar stores. But during the pandemic, direct-to-consumer sales (DTC) became our biggest revenue channel, generating enough volume for us to stay at full capacity and keep all our team members employed. Proposed restrictions on data-driven advertising would demolish DTC sales. Our ability to identify and advertise to customers inclined to do business with us is at risk. Speaking as a consumer, I enjoy learning about and purchasing unique brands that meet my tastes, which I might not discover without personalized ads. I hope legislation making it hard to use data responsibly and to personalize ads to serve more customers never gets enacted.

I founded my small business to help other small businesses grow. Whether they need help amplifying a brand, an artist or selling a product or service, our clients rely on S.S. Creative to connect with more customers, and much of that relies on consumer data.

The last few years have been tremendously difficult for small businesses, especially those I represent. For musicians and artists, live venues where they would typically connect with fans suddenly went dark, halting their ability to grow their brands and promote their work. For many, they could only connect with their audiences using social media and internet advertising.

Consumer data and digital marketing aren’t just nice tools to have: They’ve been essential to my clients’ survival. They range from recording studios and musicians to hair salons and lawyers, and the one thing they all have in common is that during the last two years, every one of them has had to move his or her business online to forge a path to success. The only reason my clients’ businesses are still surviving today is because they can connect with their customers digitally.

Baby Chick is a digital media company covering everything from pregnancy and birth to postpartum and parenthood, helping parents make the best decisions for their families. My wife Nina and I started the company on Mother’s Day in 2015. Since then, Baby Chick has influenced over 26 million (primarily) women over the past seven years and gained over 81 million pageviews. If we didn’t have internet advertising, it would be challenging for us to continue operating the company.

Internet advertising has enabled us to grow our business to what it is today, but proposed regulations limiting advertisers’ ability to reach target audiences would hurt media publishers like us. With less precise information, advertisers would likely reallocate budgets from programmatic ad-buying or bid less money on digital ads, which would negatively impact Baby Chick’s revenue and our family’s income. The readership experience would suffer if site visitors weren’t seeing ads relevant to their interests and Baby Chick’s unique content. If Congress enacts restrictions on using data for advertising, it would be extremely difficult to deliver the content our customers enjoy and to pay our staff.

New markets are constantly emerging on the internet. That's why we see the IBM and AOL of one era replaced by the Google and Spotify of the next. That’s why today direct-to-consumer brands like Madison Reed in hair care are winning market share from giants of the industry, and brands like Allbirds are finding entirely new markets. This pace of innovation is only possible because companies are leveraging data about consumer behavior to create truly customer-centric products, services and media.

When television was the main way brands built their businesses, 200 advertisers were responsible for about 88% of network television revenue in the U.S. TV advertising was the only way to reach most households in a visual medium. It was costly, requiring relationships with big ad agencies and minimum campaign spends.

High barriers made it hard for small firms and startups to advertise at all. By contrast, millions of small businesses today are finding customers on Amazon, Facebook, Google and niche platforms like Marriott and Uber Eats with the help of data-driving advertising. There’s also “earned media.” In the open environment of the internet, millions of times a day social media users are promoting their favorite brands on Instagram and TikTok.

Used responsibly and transparently, data does not harm competition and innovation. It fosters it, as my research for the Interactive Advertising Bureau shows. A healthy economic future depends on fair and creative use of data.

Internet for Growth, an initiative of the Interactive Advertising Bureau, supports the transformative role the advertising-supported internet plays in empowering America's small businesses, helping entrepreneurs bring their ideas to life. Supported by a diverse community of over 700 IAB members including marketers, agencies, publishers, platforms and ad tech providers, as well as hundreds of small businesses and creators, Internet for Growth highlights the benefits the internet delivers to local economies, expanding opportunities for innovators to reach markets far beyond their neighborhoods. Their work ensures people understand the limitless opportunity the internet provides for creativity and commerce, fair competition, and connecting with consumers on mutually shared values and interests, no matter the background or geography.

The revamped huddles will be available to all Slack customers in fall 2022.

Slack huddles are about to offer a whole lot more.

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.

Slack’s huddles are about to get a Zoom-like upgrade, with the ability to turn on video, screen-share and threaded chat.

It’s been a year since Slack first launched the “huddle,” an audio-only chat space you can turn on or off in channels and direct messages. Huddles became the fastest-adopted feature in Slack’s history, according to the company. “Our customers have loved the ease of use and simplicity of huddles,” said Katie Steigman, a director of Product Management. “It was really cool to see even a few months in that the median length of a huddle is about 10 minutes.”

Huddles were meant to enable casual, ad hoc conversations, riding the wave of audio chat made popular by Discord and Clubhouse in 2021. Steigman emphasized that the spontaneous nature of huddles is still at the heart of the feature. They’ll be audio-only by default, so users can keep using huddles the way they always do.

The new huddles are not meant to replace videoconferencing, Steigman clarified: They’re not meant for formal, planned meetings. “This will build on what people already use huddles for: impromptu coworking sessions,” Steigman said. “You’ll just be able to use video when you want to.” People will also be able to share screens in one huddle at the same time, and start a message thread if someone wants to share a link or tag a co-worker to join the huddle. You have Slack’s full selection of emojis at your disposal for reactions.

Steigman’s favorite new feature is the ability to add a topic. If you’re huddling in a public channel, you can name the huddle “Beyoncé’s new single” so your co-workers — and fellow Beyoncé fans — know to join.

The revamped huddles will be available to all Slack customers in fall 2022. Slack is also officially launching GovSlack, a more secure version of the app for government agencies and the private companies they work with, in July. Slack first announced GovSlack back in September 2021, laying out some of the compliance requirements it needed to fulfill. It’s still pursuing FedRAMP High and DoD IL4 certification.

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.

Chip startup Cerebras has developed a foot-wide piece of silicon, compared to average chips measured in millimeters, that makes training AI cheap and easy.

At the core of Cerebras’ pitch is a chip that is roughly the size of a dinner plate.

Max A. Cherney is a senior reporter at Protocol covering the semiconductor industry. He has worked for Barron's magazine as a Technology Reporter, and its sister site MarketWatch. He is based in San Francisco.

Inside a conference room at a Silicon Valley data center last week, chip startup Cerebras Systems founder and CEO Andrew Feldman demonstrated how the company’s technology allows people to shift between deploying different versions of an AI natural language model in a matter of moments, a task that usually takes hours or days.

“So we’ve made it 15 keystrokes to move among these largest models that have ever been described on a single machine,” Feldman said.

This, to Feldman and Cerebras, represents a triumph worth noting. Cerebras claims the system that achieved this feat has also accomplished a world first: It can train an entire 20-billion-parameter model on a single nearly foot-wide superchip. Without its technology, the company said scaling an AI model from 1 billion parameters to 20 billion parameters might require users to add more server hardware and reconfigure racks inside of a data center.

Training a natural language AI model on one chip makes it considerably cheaper and delivers a performance boost that is an order of magnitude superior to Nvidia’s flagship graphics processor-based systems, Feldman said. The idea is to give researchers and organizations with tiny budgets — in the tens of thousands of dollars range — access to AI training tools that were previously only available to much larger organizations with lots of money.

“Models have grown really fast in this area. Language processing, and the challenges of delivering compute for these models, is enormous,” Feldman said. “We sort of have made this class of model practical, useful to a whole slice of the economy that couldn’t previously do interesting work.”

The AI models that Feldman is talking about are simply methods of organizing mathematical calculations by breaking them up into steps and then regulating the communication between the steps. The point is to train a model to begin to make accurate predictions, whether that’s the next piece of code that should be written, what constitutes spam and so on.

AI models are typically large to begin with, but those built around language tend to be even larger. For language models, context — as in more text, such as adding an author’s entire body of work to a model that began with a single book — is crucial, but that context can make them far, far more complex to operate. Market-leader Nvidia estimates that AI tasks have spurred a 25-fold increase in the need for processing power every two years.

This exponential increase has led companies like Cerebras and others to chase AI as a potential market. For years, hardware investments were seen as bad bets among venture capitalists who were only willing to fund a few promising ideas. But as it became clear that AI as a class of computation would open the door for fresh ideas beyond the general purpose processors made by the likes of Intel and Nvidia, a new class of startups was born.

Cerebras, which is Latin for “mind,” is one of those startups. Founded in 2015, Feldman and his team, which includes a number of AMD veterans in key technology roles, have raised roughly $735 million — including funding from the CIA venture arm In-Q-Tel, the CEO said — at a $4.1 billion valuation.

At the core of Cerebras’ pitch is a chip that is roughly the size of a dinner plate, or an entire foot-wide silicon wafer, called the Wafer Scale Engine.

The idea of a wafer-size chip like the one that powers Cerebras’ systems isn’t a novel concept; similar ideas have been floating around for decades. A failed bid by Trilogy Systems in the early 1980s that raised roughly $750 million in today’s dollars is one notable attempt at a superchip, and IBM and others have studied the idea but never produced a product.

But together with TSMC, Cerebras has settled on a design that could be fabricated into a functioning wafer-size chip. In some ways, Cerebras is almost two startups stuck together: It’s interested in tackling the growing challenge of AI compute, but it has also achieved the technological feat of producing a useful chip the size of a wafer.

A Cerebras CS-2 system running inside a data center.Photo: Max A. Cherney/Protocol

The current generation of what Cerebras calls the WSE-2 can offer considerable performance improvements over stringing together multiple graphics chips to achieve the computational horsepower to train some of the largest AI models, according to Feldman.

“So it's unusual for a startup to have deep fab expertise, [but] we have profound expertise,” Feldman said. “And we had an idea of how they could, within their permitted flexibility in their flow, fit our innovation.”

The advantage of building a chip of that size is that it allows Cerebras to duplicate the performance of dozens of other server chips — roughly 80 graphics processors, for some large AI models — and squishes them onto a single piece of silicon. Doing so makes them considerably faster, because, in part, data can move faster across a single chip than across a network of dozens of chips.

"[Our] machine is built for one type of work,” Feldman said. “If you want to take the kids to soccer practice, no matter how shitty they are to drive, the minivan is the perfect car. But if you've got your minivan and you try and move two-by-fours and 50-pound sacks of concrete, you realize what a terrible machine it is for that job. [Our chip] is a machine for AI.”

This story was updated to correct the amount of money raised by Trilogy Systems.

Max A. Cherney is a senior reporter at Protocol covering the semiconductor industry. He has worked for Barron's magazine as a Technology Reporter, and its sister site MarketWatch. He is based in San Francisco.

The financial agreements have had a reputation for misleading consumers. But entrepreneurs say technology can make them more transparent, flexible and efficient.

The decades-old business model is reemerging as a possible solution for customers who are feeling less flush.

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

With rising interest rates testing “buy now, pay later,” there’s an alternative way to break up a purchase into manageable payments: lease-to-own or rent-to-own agreements. As the fintech industry refocuses on customers who are feeling less flush, the decades-old business model is reemerging as a possible solution. It carries with it a somewhat unsavory history and potentially higher costs for consumers, making it a tricky business for fintech entrepreneurs and a complex investment for VCs to consider.

Lease-to-own or lease-purchase agreements are payment plans with additional fees, not loans. Under a lease-to-own agreement, a customer pays for a product in monthly lease payments, with some portion of the payment going toward owning the product. After a period of time, customers have the option to purchase in full or continue with their monthly payments until the end of the lease term. Profit is made through the fees customers pay: With many lease-to-own agreements, a customer who sticks with monthly payments through the full term will spend twice the cost of the product than if purchased outright.

Investors know that consumers like the idea of paying for purchases over time. According to a May study from PYMNTS, 10.2% of Millennials use “buy now, pay later” on a monthly basis. Data from LendingTree also published in May suggests that the market is growing, with one in three American consumers considering using a pay-later service.

But the “buy now, pay later” sector is facing headwinds, potentially opening up opportunities for a different approach. Consumers have less money to spend on big-ticket items, and rising interest rates are hiking the lending companies’ borrowing costs. That adds up to rising delinquencies, higher costs of operation and slimmer profit margins. According to The Wall Street Journal, 3.7% of Affirm customers were at least 30 days overdue on a payment in March this year, compared with 1.4% in March 2021. Yields on the company’s securitized offerings have risen sharply from a year ago.

Lease-to-own has some downsides. Retailers like Rent-A-Center and Aaron’s developed a poor reputation for selling low-quality products at high markups. Predatory rent-to-own agreements in the housing sector targeted low-income people of color. States have stepped in to regulate lease-to-own agreements, and four states outlaw them all together: Minnesota, New Jersey, North Carolina and Wisconsin.

But the business model’s advocates say the agreements enable subprime borrowers to make purchases they might not otherwise be able to afford. And fintech entrepreneurs say that technology can disrupt the model to make it more efficient, transparent and flexible so consumers don’t overspend or get left in the dark. “Programs like ours which give customers flexibility and benefits are going to become more prevalent,” says Neal Desai, CEO and co-founder of lease-to-own startup Kafene.

Most of the lease-to-own innovation in recent years has been in the area of home ownership, with companies targeting subprime borrowers who may not otherwise qualify for a mortgage. Divvy Homes, ZeroDown and Verbhouse are just a few. Adena Hefets, CEO and co-founder of Divvy Homes, told Money in April that about half of its customers are able to buy back their properties. The company declined to say how many customers become delinquent on their payments.

Kafene targets customers who would not qualify for “buy now, pay later” loans with their payment plans. Like the pay-later companies, Kafene partners with retailers, but makes money off of markups on the products rather than merchant fees. Customers can buy themselves out of a product’s lease early if they have the funds, saving money on an additional markup.

Retailers benefit from increased customer purchasing power, Kafene says — a pitch similar to that of “buy now, pay later” companies. Delinquency is uncommon under the lease-to-own model, Desai says, because customers who find themselves unable to continue with payments can return the item at no cost. And customers build credit as they make payments — a feature particularly beneficial to young consumers who are the prime market for payment plans, but are often averse to other credit-building products.

Ohad Samet, CEO and co-founder of debt collection startup TrueAccord, argues that lease-to-own operations are not delinquency-proof. His company performs collections for several, he says, though the company declined to name them. He also argues that “buy now, pay later” companies are not under major threat, pointing out that Klarna, a company where he was previously chief risk officer, was founded 17 years ago and is not new to economic changes. Lease-to-own serves a “small sliver of the market,” he says, and should be seen as “another avenue to acquire consumers and underwrite them.”

Many in the industry emphasize the importance of regulatory compliance. Lease-to-own agreements are regulated in slightly different ways in each of the 46 states where they’re permitted, which will require companies to tweak contracts depending on the jurisdiction. Transparency, like with all financial products, is also key for legal compliance: The FTC brought charges against rent-to-own company Progressive in 2020, for example, for deceptive marketing. The company was required to pay $175 million to settle. “Deceiving people about cost strikes at the heart of the FTC Act,” an FTC analysis of the settlement reads.

Still, the appeal of a recession-proof business model is likely to draw entrepreneurs. Though some are still bullish on “buy now, pay later” in a recession, it’s unclear how rising rates will pressure the business. According to Fitch Ratings, the credit quality of pay-later loans is “yet to be tested.” Competition from lease-to-own startups may provide another test.

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

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