Why Google Cloud Will Fail

• In a recent email sent out to investors, Trip Chowdhry of Global Equities Research shared some comments on Alphabet Inc GOOG GOOGL’s Google Cloud.
• The expert looked into what Google should do to make Google Cloud a success.

In a recent report, Global Equities Research’s Trip Chowdhry explained why he believes it is impossible for Google Cloud to prosper.

“It is going to be another Google Plus... always in a perpetual catch-up mode,” he explained, adding that, he believes, Google should scale down on the initiative, focusing instead on other Alphabet portfolio companies, which may have “a better chance of creating industries.”

To understand why Chowdhry thinks Google Cloud will fail, he proposed to look at the reasons behind Google Plus’ failure -- while Facebook Inc FB continues to flourish.

A company cannot expect a business to succeed by just “throwing an Executive and Money at a problem and hope it fixes,” the expert expounded. Insights are fundamental.

Son, even having “a supposedly smart executive [Vic Gundotra], lots of money, lots of smart engineers, lots of innovation, lots of traffic - both from search and Gmail,” Google Plus failed due to a lack of insights. “One cannot succeed in these fast paced industries by imitation and playing a perpetual catchup...as the leader will always be miles ahead,” Chowdhry explicated, comparing the initiative with Facebook and Amazon.com, Inc. AMZN’s foray into the phone world – into which the companies had “zero insights.”

For this same reason –lack of insights, the expert believes Google Cloud will also fail. That’s why he thinks the company should instead scale down on the business, and stop trying to catch up with Amazon’s AWS and Microsoft Corporation MSFT’s Azure, focusing instead in other Alphabet companies with more potential.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.