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Best known for his work on the Chrome browser/OS and Android, this young gun has become perhaps the most powerful Indian-born CEO

Sundar Pichai is the new CEO of Google Inc. (GOOG).  The maker of the world's most used consumer email webclient, the most used internet search engine, and the world's most used mobile operating system (Android) announced on Monday that CEO Larry Page would be changing roles (more on that later) after serving just four years in his second stint as CEO of Google.

I. Pichai's Path

Page and cofounder Sergey Brin colaunched the company's central search engine back in 1996 while at Stanford University.  After getting venture capital to venturize the search portal -- then called "BackRub" -- Page became CEO, serving until 2001.  Google's second CEO -- Eric Schmidt -- joined the company in 2001, after being lured away from the CEO spot at networking giant Novell.  While Schmidt was not a Stanford Univ. alum., he did teach graduate business courses at the Californian college.

Pichai, Google's third CEO, is 43 years old.  He was born in the city of Chennai, India, a metropolis that is home to over 4 million.  Chennai lies in the Tamil Naidu province of India, located on the eastern half of the nation's southern tip [source].  He grew up immersed in technology thanks to his father, who was an electrical engineer.  His mother worked as a stenographer.

Sundar Pichai
Sundar Pichai, new CEO of Google, was born in India's Tamil Nadu province (right).
[Image Source: Getty Images (left); LivesLinked.org]

Pichai graduated with honors from the Indian Institute of Technology in Kharagpur (IITKGP) where he studied metallurgy and industrial engineering.  Scraping together money, the family bought Sundar a plane ticket to Calif. to study in a masters program at Stanford Univ., where he had won a scholarship in 1993 [source].  At Stanford Pichai studied elctrical engineering, specializing in semiconductor design.  Soon Pichai would receive his M.S. from Stanford.

After graduation, he would spend part of the late 90s work at Applied Materials, Inc. (AMAT), a top Santa Clara, Calif.-based semiconductor hardware components designer.  In 2001 he left Applied Materials and the state of California and joined the ranks of McKinsey & Comp., Inc., a top global business consulting firm.  While working at McKinsey he earned an MBA from the Univ. of Pennsylvania's (UPenn) Wharton School of Business [source].

In 2004 he was given an exciting opportunity to join the ranks of Google, who at the time had just gone public.  For the next four years he worked efficiently and purposefully at the internet giant, rising through the management ranks.  Early on he was assigned to managing and promoting the toolbar and search widgets of Google that plugged into browsers.

According to BusinessInsider, it was Pichai who convinced Google's management to launch a browser.  At the time Eric Schmidt was rather opposed to the idea.  Nonetheless, Pichai's pitch convinced cofounders Brin and Page, who greenlighted the hiring of several top Mozilla developers between 2004 and 2008.  A demo was presented internally around late 2006, and Schmidt was reportedly impressed enough to approve the browser to march to market.  

Sundar Pichai
The Chrome browser was Pichai's first Google blockbuster product. [Image Source: Reuters]

Shipping in Sept. 2008the new browser grew steadily under the watchful management of Pichai.  Today it is the most used third party browser on the PC, and the world's leading browser in overall usage (inc. both PC and mobile).

II. Trial by Fire

In 2011, as told by Death and Taxes Magazine, Pichai faced a momentous decision, when Twitter, Inc. (TWTR) offered to make him their product chief.  Google offered Pichai somewhere in the neighborhood of $50M USD in stock options, prompting him to stay.

While hindsight, as they say, is 20-20, the move would ultimately prove a wise decision.  Today Google is the world's second most valuable company (by market cap), behind only mobile arch-rival Apple, Inc. (AAPL).  Twitter, meanwhile has struggled to maintain user activity and growth.  The gloomy Q2 2015 earnings report drove stock falling to all time lows, prompting the company's top brass to circle the wagons.  Suffice it to say while Twitter is a relevatively strong brand as well, being on top at Google is a better fate at present than being on top at Twitter.

If his decision to stay and the success of Chrome browser made Pichai one to watch at Google, it was Chrome OS that truly made him a star.  First unveiled in 2009, the highly customized consumer Linux distribution for internet-connected consumer budget PCs generated substantial buzz.  Finally rolled out in test form in Dec. 2010, most were rather cynical about its market prospects.

Acer Chromebook
Acer's Chromebook 11 (2015)

Indeed, sales of the first wave of Chrome OS notebooks -- launched in Mar. 2011 -- were lackluster.  By 2012 the OS looked all but dead, sales wise.  But in mid-2013 I was one of the first to note a surprise turnaround.  Boosted by a refreshed lineup and by consumer apathy towards Microsoft Corp.'s (MSFT) rival budget offering, Windows 8, budget Chromebooks (Chrome OS laptops) began to rise to the top of sales rankings at online retailers.

Today the market is home to a plethora of Chromebooks and the platform continues to pick up sales steam.  As many as 1 in 4 budget laptops sold in the U.S. market are today Chromebooks, a solid, if not unanimous scucess.

Arguably turning around Chrome OS greatly increased Pichai's reputation, as history tells us it's common to capitalize on a great idea, but far harder to revitalize a failed one.

In 2013 Pichai's successes were rewarded with a pivotal promotion.  As the new senior vice president (SVP) of Android, Chrome & Apps, Pichai inherited the world's most used mobile operating system, a unit which had previous been managed by the cofounder of Android, Andy Rubin (Rubin went on to serve a brief stint as Google's head roboticist before departing for good).
Android and Google products


The last two years have been good ones for Android and with it, Pichai.  While he was widely considered a top candidate to eventually become CEO, most didn't expect it to happen quite so soon.  

III. Alphabet Soup: G is for Google

The more compelling question, it previously seemed, was whether Google could hang on to the hot tech star.  While he never publicly interviewed for the job, Pichai was rumored to be in the running for Microsoft's CEO spot.  Ultimately that position that would eventually go to Pichai's fellow countryman, Satya Nadella.

But Pichai was clearly too important to Google to let go, so it acted aggressively to give him a coveted role amidst a major reorganization.  Pichai -- a married family man with a young son and daughter -- received a largely honorary promotion to "Product Chief" in Oct. 2014.  But the best was yet to come -- CEO of Google.

While Pichai will become CEO of what is, for all intents and purposes, most of the customer face of the "old Google", the picture is made a bit more complex by the creation of Alphabet, Inc. (http://abc.xyz).  Alphabet's domain was amongs the crop of *.xyz domains that were allocated in 2014.

Alphabet website
 
As a business entity, Alphabet is a holding company.  Each share of Google has been converted automatically to an equivalent Alphabet share.  The ticker symbol, however, will remaining unchanged.  Alphabet shares carry the same rights as Google's shares.

While analysts will surely devote much time to divining its true intent in months to come, the ostensible purpose is to relieve the growing stress from Google's ever-growing stable of at-times tenuously related acquisitions and investments.

Google is the crown jewel of Alphabet.

Google light
[Image Source: Reuters]

Larry Page is Alphabet's new CEO (Brin in President of Alphabet).  So in a way you could say Pichai is CEO of Google and Page is Supreme-CEO of Google and its sister companies.  The whole thing feels sort of like a bad DragonBall Z script, but it clearly will allow the collective of companies to operate more efficiently (and may offer cetain tax advantages as well -- another possible play).  

Larry Page
As CEO of Alphabet Larry Page will be supreme CEO of Google and its sister companies.
[Image Source: Getty Images]

TechCrunch suggests the unusual gambit may help Google retain talent by giving more opportunity for advancement.  The shift may also help to free Google's sister companies from antitrust scrutiny that's plagued Google of late.  The same goes for lawsuits against Google by consumers or rival companies.

The following are the toher letters of the Alphabet family that we know of: Alphabet's webpage is a bit barebones, but carries an open letter from Page explaining the gist of the new organization scheme.  Page writes:

Our company is operating well today, but we think we can make it cleaner and more accountable. So we are creating a new company, called Alphabet.  I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President.

What is Alphabet? Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead.

...

For Sergey and me this is a very exciting new chapter in the life of Google—the birth of Alphabet. We liked the name Alphabet because it means a collection of letters that represent language, one of humanity's most important innovations, and is the core of how we index with Google search! We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for! I should add that we are not intending for this to be a big consumer brand with related products—the whole point is that Alphabet companies should have independence and develop their own brands.

It is unclear whether Google Fiber and Google's pending MVNO project will be spun off into the Alphabet family or be kept in house at the core Google.  I would guess for now they're staying, although that could be proven wrong.

IV. Indian CEOs in Silicon Valley are Shining Bright

While Pichai's CEO position answers to Page and hence has some unusual strings attached, he is, for all intents and purposes, Google's new chief.  Each Alphabet subsidary will operate as its own semi-autonomous fiefdom.  Page will offer broad direction and possibly work with other high level management to interconnect efforts (when possible between the companies).  But day to day final authority at Google is now Pichai's.

Google, at close, had a market cap of just over $445B USD.  It reported its quarterly results last month.  In the last year it has posted $35B USD in revenue (roughly two-thirds of a million dollars per employee) and $6.9B USD in profit.

The fate of Google's modest cash pile -- which at last count stood at $18.453B USD (plus $51.3B USD in marketable securities) -- remains to be seen.  It's unclear whether Alphabet or Google will retain that sum (given that Google is the primary revenue driver of Alphabet.  Most likely it will go to Alphabet, but Pichai will surely be able to tap it as necessary.

Sundar Pichai
Sundar Pichai stands next to a statue celebrating his company's star product -- Android.
[Image Source: Bloomberg]

All of Google's star products -- its advertising network, Chrome OS, Android OS, the Chrome browser, and its Play media offerings, among others -- will be directed by Pichai.  

One could argue that Pichai is now the world's most powerful Indian-born CEO (as Google's market cap eclipses Microsoft's).  Of course, one could make the counter argument that Nadella is more powerful as he enjoys ultimate control at Microsoft, answering only to the board, where as Pichai will answer to the Alphabet board, to Brin, and to Page.  But however you slice it, it's clear that two of the world's three biggest software companies now have Indian CEOs.

Satya Nadella
Microsoft's CEO, Satya Nadella, is also an Indian national. [Image Source: ScottGu's Blog]

That's a boon for India, who has suffered over the years from accusations of over-reliance on imitating the technological efforts of the west and has lagged behind economic rival China.  But ultimately India -- home to 1.2 billion people as the world's second-most populous nation behind China -- may yet prove the next dominant power of the developing world.  China controls greater manufacturing, has a stronger banking network, and a nearly five times larger GDP ($11.2T USD; $8,154 USD per capita -- India's is $2.308T USD; $1,108 USD per capita).

Still, India is winning the war when it comes to gaining positions of leadership in global firms, particularly those in the U.S.  China's success remains brighter, but largely insular, which could spell trouble for the nation's long term battle with India for dominance.

And thus far India's Silicon Valley heroes are gaining a reputation for being strong, but personable leaders.  Pichai, according to a Fortune report from last fall, is widely known among Google employees and venture capital circles as a "nice guy" with a "warm, easygoing rapport".  Nadella, while occasionally stumbling over his words early on, has generally appeared more easy going than the mercurial Ballmer (Microsoft's prior CEO).

It's safe to say that this stop won't be Pichai's last.  In time he seems likely to replace Page as CEO of Alphabet.  But for now, he's content with his long await position at the head of the Google table.

Sources: Google [blog], [Investor press release], Alphabet {new homepage]





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