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Google's Sundar Pichai Is the Most Powerful Man in Mobile


(An earlier version of this story ran online.)

(Corrects the price of the Chromecast hardware in second-to-last paragraph.)

Benjamin Rasmussen for Bloomberg BusinessweekAt the Consumer Electronics Show in Las Vegas in January, Samsung (005930:KS) introduced new software for its tablets, called the Magazine UX. This was a revamped interface that resembled the table of contents in a magazine, allowing users to click directly into videos and articles. Manufacturers often apply their own design flourishes to Android, and this one looked good—not groundbreaking, maybe—but slick, intuitive, and completely unobjectionable.

Behind the scenes, though, the announcement enraged executives at Google (GOOG), the company that owns and administers Android. Magazine UX hid Google services such as its Play apps store and required Android users and application developers to learn an entirely new set of behaviors for Samsung devices. The South Koreans were relegating Google to the background.

Defusing the situation fell to Sundar Pichai, the tactful, tactical new chief of Google’s Android division. Pichai set up a series of meetings with J.K. Shin, chief executive officer of Samsung Mobile Communications, at the Wynn (WYNN) hotel on the Vegas strip, at Google’s offices in Mountain View, Calif., and again in February at the Mobile World Congress convention in Barcelona. Pichai says they held “frank conversations” about the companies’ intertwined fates. A fragile peace was forged. Samsung agreed to scale back Magazine UX and, signaling a new era of cooperation, the two companies announced a broad patent cross-licensing arrangement. “We now work together more closely on user experience than we ever have before,” Pichai says.

Ten years ago, the Indian-born Pichai, 42, was a product manager at Google, and his domain consisted of the search bar in the upper right corner of Web browsers. He then persuaded his bosses to wade into the browser wars with Chrome, which in time became the most popular browser on the Internet and led to the Chrome operating system that runs on a line of cheap laptops called Chromebooks. Pichai took over Gmail and Google Docs in 2011. In 2013, CEO Larry Page put him in charge of Android, making him one of the most powerful technology executives in the world. Page says Pichai “has deep technical expertise, a great product eye, and tremendous entrepreneurial flair. This is a rare combination, which is what makes him a great leader.”

Google doesn’t discuss Android’s profitability, and analysts have had a notoriously difficult time making estimates. Yet the operating system is vital to Google, whose revenue was $60 billion in 2013. Android runs on 1.2 billion devices around the world. It drives users to the company’s hugely profitable search engine and the ads on its maps service. Google search and maps are available on phones made by Apple (AAPL) and Microsoft (MSFT), too, but Google pays those companies referral fees. The more people use Android, the more Google can keep that revenue to itself.

Managing Android might be the hardest job at the company. Every phone maker that joins the Android world has to balance its interests with those of Google. The software is open-source, so anyone can adapt the code for his or her own purposes. Google distributes the latest versions free under the agreement that device makers will highlight profitable Google services—especially search and maps—while their own brands and services take a back seat.

Samsung isn’t the only company whose relationship with Google is complicated. Companies such as Amazon.com (AMZN), which recently introduced its own phone, the Fire, and Nokia (NOK) have created custom variations of Android that use older versions of the software and leave out Google services entirely. HTC (2498:TT) and LG Electronics (066570:KS) have taken the deal but make little money from their Android devices and hold negligible shares of the smartphone market. Meanwhile, developers complain about the complexity of making applications for the varied world of Android phones and tablets, all with differently sized screens and processors, particularly compared with the relative ease of developing for Apple’s more orderly universe of iPhones and iPads.

“The openness and flexibility that Android created is a double-edged sword,” says Dave Feldman, co-founder of Emu, which makes a mobile messaging service. “Because carriers and manufacturers can modify Android, the task of creating and debugging an app can be far more time-consuming than for iOS. That is Android’s big challenge.”

Tim Cook, Apple’s CEO, used the stage at Apple’s Worldwide Developers Conference in June to call Android a “toxic hellstew” of security vulnerabilities and fragmentation, running on so many kinds of devices that it fails to offer the latest features to users. Pichai calmly mounts a defense of Android’s security features and its relationship with developers, but it concludes as less of a retort than a sigh of envy. “It must be liberating [for Apple] to wake up and think about your device, your software—and hey, ‘I can even call the chip-set guys and say what the chip should be,’” he says. “I have to think about building a platform and bringing as many people along on this journey and getting it right. I believe that ultimately, it’s a more powerful approach, but it’s a lot more stressful as well.”

Photograph by Benjamin Rasmussen for Bloomberg BusinessweekPichai’s colleagues talk up his affability and skills as a diplomat, how he bucks the contemporary image of technology executives as vainglorious, out-of-touch men-children. “I would challenge you to find anyone at Google who doesn’t like Sundar or who thinks Sundar is a jerk,” says Caesar Sengupta, a vice president who has worked with Pichai for eight years.

In person Pichai is soft-spoken and self-deprecating. He warns that without proper care, Android’s future might resemble a surfing lesson he recently took in Hawaii with his 11-year-old daughter: It seemed like a triumph when he got up for the first time, but then he fell badly. In a series of interviews in conference rooms at Google’s Mountain View, Calif., and San Francisco offices, he peppers his conversation with idiosyncratic tics, abusing the word “internalize,” and inserting “et cetera” at the end of many phrases. A recently grown, gray-flecked beard adds gravitas to his boyish face. He says not shaving saves time and “reflects the state of mind of having more responsibility.”
 
 
Pichai was born in Chennai, a city of 4 million in the southern Indian state of Tamil Nadu. His mother worked as a stenographer before she had children; his father was an electrical engineer for the British conglomerate GEC and managed a factory that made electrical components. “I used to come home and talk to him a lot about my work day and the challenges I faced,” recalls Regunatha Pichai. “Even at a young age, he was curious about my work. I think it really attracted to him to technology.”Pichai with his parents in California in 1997, when they came to visit him in the U.S. for the first timeCourtesy Sundar PichaiPichai with his parents in California in 1997, when they came to visit him in the U.S. for the first time

The family of four lived in a two-room apartment, with Sundar and his younger brother sleeping in the living room. During much of his childhood, the Pichais didn’t have a television or a car. For transportation, the choice was either one of the crowded, stifling city buses or the family’s blue Lambretta scooter. All four would pile on—Regunatha driving, Sundar standing at the front, and his younger brother perched on the back of the seat with their mother.

The Pichais got their first telephone, a rotary, when Sundar was 12. The phone revealed to him the magical conveniences of technology, as well as an unusual gift: He could remember every number he ever dialed. “My uncle would call up and say, ‘Hey, I lost this phone number, but you once helped me dial it,’ and I would be able to tell him,” Pichai says. “I wasn’t so sure that was useful.” (It is now: Google executives marvel at Pichai’s powers of numerical recall. Alan Eustace, vice president for engineering, says that during a recent meeting, Pichai produced a statistic related to the increase of voice-activated searches. “That’s my area,” Eustace says, “and he knew a number I did not know.”)

Pichai excelled at school and won a coveted spot at the Indian Institute of Technology in Kharagpur, where he studied engineering. After graduating, he won an additional scholarship to Stanford University to study materials science and semiconductor physics. Pichai’s father tried to take out a loan to cover the cost of the plane ticket and other expenses. When it didn’t come through in time, he withdrew $1,000 from the family’s savings—more than his annual salary. “My dad and mom did what a lot of parents did at the time,” Pichai says. “They sacrificed a lot of their life and used a lot of their disposable income to make sure their children were educated.”

Upon arriving at Stanford in 1993, he tried to buy a new backpack and “was in an absolute state of shock” to learn it cost $60. He later bought a used one on an online bulletin board. Pichai lived with a host family during his first year and spent much of the time miserably lamenting the absence of his girlfriend, Anjali, who later joined him in the U.S. and is now his wife.Pichai at the Stanford University dorms in 1994Courtesy Sundar PichaiPichai at the Stanford University dorms in 1994

Pichai planned to get a Ph.D. at Stanford and pursue an academic career, but he briefly panicked his parents by dropping out to work as an engineer and product manager at Applied Materials, a Silicon Valley semiconductor maker. After getting an MBA from the Wharton School of Business in 2002 and spending a stint as a consultant at McKinsey, Pichai arrived at the Googleplex on April 1, 2004. On the day of his job interview, Google launched Gmail, the free e-mail service. Pichai says he thought it was one of the company’s famous April Fools’ pranks.

Pichai joined the small team working on Google’s search toolbar. It gave users of Internet Explorer and Firefox, the dominant browsers at the time, easy access to Google search. He proposed that Google build its own browser and won the support of the company’s co-founders, though he faced an objection from then-CEO Eric Schmidt, who thought that joining the browser wars would be an expensive distraction. Chrome eventually proved fast and painless to use while ensuring that Web users had direct access to Google’s search engine and its immensely profitable advertising system. Chrome now holds 32 percent of the browser market on phones and desktop PCs, ahead of Internet Explorer, Firefox, and Apple’s Safari, according to Adobe. Pichai and his wife, Anjali, in New York in 2002Courtesy Sundar PichaiPichai and his wife, Anjali, in New York in 2002

Even Pichai’s effort to develop the Chrome operating system for laptops is showing promise amid an overall slump in PC sales. Chromebooks route users directly onto the Internet, where they store all their information, instead of on a hard drive. When Chrome OS was introduced in 2011, such a stripped-down system that kept data “in the cloud” seemed preposterous; now 21 percent of commercial laptops sold in the U.S. last year were Chromebooks, according to the NPD Group. Pulling that off was a managerial feat: Pichai assembled a large, well-funded group inside Google that was serious about building hardware and forging strong relationships with retailers such as Best Buy (BBY) and PC manufacturers such as Dell, Lenovo (0992:HK), and Samsung. Those skills would come in handy running Android.
 
 
The first Android device came out in 2008, more than a year after the first iPhone. The G1 smartphone, made by HTC, ran only on T-Mobile (TMUS) in the U.S. and had a sliding screen that revealed a physical, BlackBerry (BBRY)-like keyboard. It met with lukewarm reviews. Within three years, boosted by the proliferation of varied, inexpensive Android devices made by Samsung, HTC, and others, Android had become the most popular smartphone operating system in the world. IDC, a tracking firm, expects Android to run on 80 percent of the smartphones that will be sold this year, blowing away Apple’s 15 percent market share. Android now powers everything from Samsung’s new Galaxy S5 smartphone ($650 without a contract) and Motorola Mobility’s smaller Moto E phone ($130) to a universe of connected devices such as smart-watches, refrigerators, and a $3,000 treadmill from NordicTrack.

Andy Rubin deserves much of the credit for Android’s success. A charismatic technologist and repeat entrepreneur, Rubin founded a startup called Android in 2003 and sold it to Google in 2005. Then he guided the chief product—the mobile operating system—for the next eight years, building its huge ecosystem of device makers and developers while successfully preventing Apple from utterly dominating the next stage of computing with the iPhone. Rubin kept handset makers off balance by selectively sharing information and choosing a different company each year for early access to the newest version of the software. That approach fostered competition among phonemakers, which outdid each other with faster processors, higher resolution screens, and other improvements.

Click to compare iOS and Android screen sizesPhotograph by Brent Lewin/BloombergClick to compare iOS and Android screen sizes

Rubin’s style also grated. Hardware manufacturers, vying for special treatment, viewed him as Machiavellian and difficult to work with, according to many executives at these companies. As the operating system gained popularity, every division of Google wanted to plant its flag on Android smartphones. Rubin closed Android’s ranks, and Google employees were fond of saying that it was easier to work with rival Apple than Android. “Part of it was just the phase of the project,” says Brian Rakowski, an Android vice president. “The team really needed to just ignore everybody.” Rubin also fought to keep the platform neutral, giving outside developers as much of a chance on Google phones as internal services such as social network Google Plus. One person close to Google’s management team, who was not authorized to speak publicly, says Rubin’s reluctance to work openly with other parts of Google was responsible for the only shouting matches he’s witnessed in the upper ranks at the company.

In 2012, Google announced a version of Pichai’s Chrome browser for Android, which would replace the mobile browser Rubin had developed within his own group. It seemed a perfect model for friendly collaboration within Google. Yet the relationship between the divisions was so strained that they wouldn’t work together without a term sheet, a contract normally required between two companies that stipulated the responsibility of each side.

“There was nothing ever personal,” Pichai says, when asked whether he got along with Rubin. “We had a good sense of friendship, though we weren’t particularly close, but we never had any major disagreements. We had passionate debates about certain courses.” He allows that their styles differed. “Andy kept a lot about how he thought about things to himself. My sense is that at a base level, that is how he functioned. Andy had a plan and a strategy, but it was inside his own head.” Google declined to make Rubin available for comment, and Pichai says he doesn’t consult with him.

By 2013, Android was winning the smartphone war but lagging in newer markets. Apple’s iPad dominated tablets, while Google-led efforts were struggling. An early attempt to develop Android-based software for TV set-top boxes, called Google TV, also failed.

At the beginning of 2013, CEO Page told Rubin he had to integrate Android with the rest of Google. Rubin agreed at first, then changed his mind and decided he couldn’t do it. He resigned his position, though he remains at Google, working on a skunk works robotics project. A person close to Google’s management says that forcing Rubin’s hand was the most difficult decision Page has made since reclaiming the CEO spot at Google three years ago. Page then handed responsibility for Android over to Pichai.
 
 
Benjamin Rasmussen for Bloomberg BusinessweekPichai says his first task was to do no harm. “I was worried about disruption,” he says. “This was a small team executing well.” Others at Google say he quickly started opening doors between Android and other product groups. He pushed Google Now, the Android feature that sends users customized, intuited information such as driving times and the sports scores of favorite teams. Rubin had introduced it, but Pichai created an interdisciplinary team with the search group, which had voice search technology and algorithms that could discern what information might be most important to users. “Sundar helped me to formalize a relationship,” says Johanna Wright, the product manager who runs Google Now. “Because search and Android sit in two different buildings, we ended up doing a people swap.” It was a kind of Google glasnost that would have been unlikely to happen under Rubin.

Pichai threw extra resources at a project called Svelte, a slimmed-down Android intended to run well on cheap, low-powered devices. It means developers don’t have to create multiple versions of their apps to compensate for old operating systems run by budget phones. And Pichai killed a project to develop a version of Android for touchscreen laptops—it overlapped with Chromebooks—shifting attention toward tablets and new categories such as smart TVs and wearable computers. Deciding that the coming age of connected home appliances needed a separate focus, he helped orchestrate the $3.2 billion acquisition of smart thermostat maker Nest in January. Then he shuttered several smart-home projects inside Android and handed responsibility for connected appliances to Nest because, he says, “I felt it was far enough out and different enough from what we were doing.” Nest has drawn good reviews for its original product, a connected thermostat, but had to temporarily take its newer smoke detector off the market to correct a safety glitch. Nest recently acquired Dropcam, a maker of wireless security cameras, for $555 million and announced it would allow outside developers to link into its devices. (The smoke detector went back on sale on June 17.)

Pichai has tried to improve relations with other companies as well. In April 2013, he took Page and Chief Business Officer Nikesh Arora on a trip to South Korea to visit Samsung executives and tour a factory. He says the intent of the trip was to convey respect. “I felt there was more distance than I would like in a partnership,” he says. “I wanted a closer, more direct line of communication.” Page also shook hands with South Korean President Park Geun-hye without causing an international stir by keeping one hand in his pocket, as Bill Gates had done the previous week.

Pichai is still walking a tightrope with Samsung, balancing the needs of the Android superpower while keeping rival manufacturers in the fold. Samsung still touts its own rival Linux-based mobile operating system called Tizen, suggesting it may be planning for a day when it decides to reduce its dependence on Android. Pichai shrugs off that possibility. “I view Tizen as a choice which people can have,” he says. “We need to make sure Android is the better choice.”

For now, Samsung uses Tizen primarily to run its Galaxy Gear smartwatch and a new phone, the Samsung Z, which is being introduced later this year in Russia. Gene Munster, an analyst at Piper Jaffray, believes Pichai has quelled the threat. “The relationship is never going to be perfect, but I think it’s in good shape,” he says. “They both need each other is the bottom line.”
 
 
On June 25 and 26, 6,000 developers and members of the media descended on San Francisco for Google’s high-profile annual conference, called I/O. Really, though, it was the Sundar Show. (Page and Google co-founder Sergey Brin were not in attendance.) Pichai served as master of ceremonies, pitching Android’s suitability for the workplace and for the coming age of connected televisions, automobiles, and wristwatches.

Pichai had been preparing for I/O since early June, which isn’t a lot of time as major Silicon Valley events go. Google typically plans these things at the last minute—a week before the conference, Pichai had yet to make several big decisions about whether certain projects were ready to be unveiled. No doubt there was a lot of pacing during the prep meetings: Colleagues say Pichai likes to walk when deep in thought and will occasionally wander away during a meeting, only to reappear with an answer to a problem.

When the day arrived, Pichai made a change that seemed small and technical but is actually a huge deal. In the past, Google often waited until the fall to announce the next annual version of the operating system, each named for a different sweet beginning with the next letter of the alphabet (in the last three years, Ice Cream Sandwich, Jellybean, and KitKat). Android hardware makers hated that, complaining that the announcement came too late for them to get ready for the holidays. It also put them at a disadvantage to the one company selected each year to develop a phone in conjunction with Google.

This year, Pichai previewed the next release for the first time at I/O rather than waiting until the fall. The updated Android—as yet unnamed—includes a design that adds more depth and richer animations to the screen and allows people to more easily unlock their phones based on the proximity of devices such as a smartwatch. Introducing the new Android early in the year is a significant shift toward greater transparency. “I want the world to understand what we are doing sooner,” Pichai says.

Android executives also talked about Android Wear, a version of the operating system for fitness trackers and wearable computers, and announced new smartwatches from Samsung, LG, and Motorola. The watches serve up notices about pending appointments and health data such as the wearer’s heart rate. They also run a range of their own applications, so users can order takeout and call taxis from their wrists and not have to pull out their phones.

Google is racing against Apple, which will introduce its iWatch in the fall. Pichai says it’s “crazy” that people visit their doctors once a year at most to have their heart rate and blood pressure measured. “You obviously need to be able to measure these things so many more times and then apply more intelligence to it,” he says.

Television was also on the agenda. Google has struggled when it comes to the living room, with the failed Google TV effort in 2010. It’s had more success with a $35 piece of hardware called the Chromecast that allows users to run video and apps from phones or tablets on their HDTVs. Seeking to avoid the inconsistent approaches of the past, Pichai has brought everyone at Google working on TV software into one group within Android. The new software lets gamemakers and other developers easily transfer their apps over to televisions. Owners of Google TV devices, which are coming later this year, will be able to use their voices to search for shows and films and use their phone or watch as a remote control.

Pichai explained that Android TV is meant to give “TV the same level of attention that phones and tablets have enjoyed.” Samsung, LG, Sharp, and others make smart TVs that run their own proprietary software; presumably none of them want to cede control over their customers to Google, as they already have in smartphones and tablets. Pichai’s job will be to persuade them to bet on Android all over again.

Stone_190
Stone is a senior writer for Bloomberg Businessweek in San Francisco. He is the author of The Everything Store: Jeff Bezos and the Age of Amazon (Little, Brown; October 2013). Follow him on Twitter @BradStone.

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