Google finally gains traction in cloud services

(Image: Stockfresh)

1 August 2017

Google has long run a distant third behind Amazon and Microsoft in the cloud services business, but it finally seems to be catching some momentum, if the most recent quarter is an indicator of future trajectory.

During an earnings call with Wall Street analysts, Google CEO Sundar Pichai said that Google Cloud Platform continues to experience “impressive growth across products, sectors and geographies and increasingly with large enterprise customers in regulated sectors.”

To be more specific, Pichai said Google closed three times as many $500,000+ (€423,000) deals in the most recent quarter as it did in the same time period last year. Of course, that is kind of pointless without knowing the exact number. And given Alphabet, Google’s parent company, reported overall revenue of $25.8 billion (€21.8 billion) for the quarter, it’s likely a few drops in the bucket.

Google puts cloud in its “Other Revenue” list alongside things such as the Google Play app store, which likely accounted for much more revenue. Revenue in that category was $3.1 billion (€2.62 billion), up 42% from this time last year.

Trustworthy platform
Pichai said Google Cloud Platform is doing more and more business with large enterprise customers “in regulated sectors.” That’s significant because the regulated sectors, like healthcare and finance, are the slowest to move to the cloud and are extremely picky about their provider. They must comply with all manner of complex regulation, and that’s not easy to do.

Landing customers in regulated sectors means Google Cloud Platform can be trusted to handle sensitive data for these industries. That’s a strong message for Amazon and Microsoft, which are also certified in areas such as healthcare.

Google said it invested $2.8 billion (€2.37 billion) in production equipment, facilities and data centre construction during the quarter.

Market research firm Canalys recently noted that Amazon Web Services (AWS) continues to be the most dominant of the cloud providers, but it is growing more slowly than its rivals. It put Amazon’s cloud business at around $3.5 billion (€2.96 billion) in Q1 of 2017 with 43% year-over-year growth, put Microsoft at $1.5 billion (€1.27 billion) with 93% growth, and put both Google and IBM well under $1 billion (€845 million), with 74% growth for Google and 38% for Big Blue.



IDG News Service

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