Secret sauce: Inside Google's API decision

Google's decision to open up more of its APIs to the channel has prompted a radical shift in the business model of its longest-standing UK partner. Doug Woodburn reports

As one of the original ‘born-in-the-cloud' providers, Ancoris' move a decade ago to dump its traditional reseller business and embrace the fluffy form of IT turned out to be a prescient one.

Ancoris became Google's first-ever UK test partner in 2007 after the financial crisis prompted it to re-engineer its business towards cloud.

But a decade later, the firm is in the midst of undergoing a second business model overhaul after concluding that its future lies increasingly in developing applications using Google's APIs, rather than reselling Google's core services.

The backdrop for Ancoris' latest transformation, its CEO David McLeman told CRN, is Google's decision to make more of the "secret sauce" that underpins its consumer technology available to the channel.

Ancoris currently has 37 staff, but this month moved into new offices that will support its goal of doubling headcount by 2019, he explained.

Ancoris' early cloud engagements focused on moving utility services such as email to the cloud, he said. In about 2012, the focus switched to widespread adoption of collaboration services, but by 2014 wider acceptance of the cloud meant customers were starting to experiment with how they could use public cloud to gain extra insight from their data, McLeman explained.

That prompted Ancoris to acquire a small firm that was using Google's App Engine platform-as-a-service offering to develop applications. This threw it into contact with Google's APIs.

"Over the last three years, Google has opened up more and more of its own infrastructure, in terms of the ability to migrate existing workloads - in similar ways to Amazon - but they've also opened up more and more of that secret sauce that allows Google to be so special," McLeman said.

"A lot of the APIs that Google has, and a lot of the machine learning and intelligence that underpins its core consumer products, is being opened up in a way that allows us to provide business services to customers, and help them rethink how they can get extra value from their data."

Ancoris is now doing a roaring trade with the APIs Google makes available around Google Maps, McLeman said. This could enable it to, for instance, help insurance companies improve how claims are handled by giving them greater insight into where the assets being insured are located, he explained.

"Google is also opening up APIs to look at media and images, which allows you to start getting insight into people's media archives," McLeman added. "They now allow us to do searches for things like a ‘happy man', or a ‘blue car', and to search through media archives to pull out insights just by analysing images. They can do that just because of the machines they've trained through things such as Google Photos.

"So for us as a business, in the last two years in particular, we have seen a colossal increase in the number of new business applications that we are building for clients."

Aspire to inspire

Business consultancy is another growth area, McLeman added.

"We are now helping to inspire people in the art of the possible, by adoption of public cloud," he said. "If you look at that in terms of the ability to adopt some of these machine-learning technologies coming through, it can be really dramatic. One area where we are seeing a lot of uptake is the adoption of chatbots, and the ability to use a cloud-based chatbot that will take standard feeds from things such as Facebook Messenger to offload your helpdesk. And that becomes very, very powerful, and you can only do it with a public cloud platform."

Ancoris now draws half of its gross margin from application development and application managed services, while 30 per cent of its staff are application developers, according to McLeman. Its traditional deployment activities have dropped to a half of revenues.

Starting life as a Microsoft information and security management consultancy in 2003, Ancoris made the decision to abandon its reseller roots in 2007 after the financial meltdown led to a spending crunch among its core clients, which included three of the largest four UK banks.

At that time, it already drew 15 per cent of its revenues from Postini, and Ancoris made the decision to throw its weight behind Google after Google acquired the email security specialist in that year.

McLeman said Ancoris is therefore strictly speaking a ‘reborn-in-the-cloud' provider.

"We were the first pilot partner for Google's partner programme in the UK; it was very, very early days [for cloud] at that point - companies like Amazon didn't really have a channel model at all, so we were definitely one of the early pioneers," he said.

Experience counts

Ancoris no longer has the market to itself since a raft of SIs and resellers, including Computacenter, got skilled up on AWS and other public cloud technologies, but McLeman maintained that the firm has remained one step ahead of the game.

"When people look at the breadth of experience we've got, it isn't just on infrastructure," he said. "Just migrating infrastructure will become a relatively commoditised process, and we see a few of the big players, like Rackspace and Claranet, getting into that. But the piece about really taking advantage of the cloud and transforming business processes is a step higher up the stack.

"The real benefit [of cloud] to a business comes when you take advantage of some of the other services that are becoming available. Things like machine learning; some of these public APIs that expose ways of enriching your business data: those are the areas where I don't feel there are a lot of skill sets in the market, and where we certainly feel we are differentiated."

A decade on, Ancoris remains fiercely loyal to Google, and McLeman still sits on the search giant's partner advisory board.

"Google have tended to work with a relatively tight group of specialist partners in each of the areas they work," he said. "They don't believe the route to success is having hundreds or thousands of partners out there; they want to have partners that are experts and in that relationship they treat partners as an extension of their company and professional services capability."

Google further hoisted the bar on what it expects from its partners a couple of years ago, but McLeman backed the move.

"Their expectations of us are pretty high, but on the flip side, that does mean if you are a customer working with a top-tier Premier partner, you are guaranteed that the partner knows their stuff and is an expert in their technology," he said.

"More significant is the arrival of [Google Cloud boss and former VMware CEO Diane Green] two years ago. Her arrival has really helped, and the investments that are being made in addressing the enterprise market are accelerating at a colossal rate. I think most people realise only the ‘big three' public cloud providers - AWS, Azure and Google -have the scale to compete, and Diane's arrival showed an acceleration on the investment Google is making."