Google cloud boost helps drive Alphabet to 21% revenue growth
Google’s parent company Alphabet saw its revenue grow 21% in its second quarter earnings results, driven in part by a huge boost to its cloud business.
The internet giant posted overall revenue of $26 billion for the three months ending June 30, with its “other business” – sectors where revenue is not made through advertising – which includes cloud services contribute $3.1 billion of that. That is a 42% rise year-on-year.
Google does not break off its cloud results, although the firm has expressed ambitions to surpass market leader Amazon Web Services as the top hyper scale cloud provider within the next five years.
Google’s enterprise cloud customers include Nintendo, Home Depot, Coca-Cola, and Spotify. CEO Sundar Pichai told analysts on Monday that Google Cloud Platform has a “diverse set of use cases across sectors and industries and geographies and so, I would say the breadth of what we have seen, it's really surprised me.”
The success of Google Cloud included seeing the number of deals valued at over $500,000 triple from the same period in 2016, Pichai said. Google has made a number of major cloud announcements in the last year, expanding the reach of its Cloud Platform in November by adding new regions in the US and Japan. It has also announced agreements with the likes of Megaport, Tata Communications, and Level 3.
“Google Cloud Platform, GCP, continues to experience impressive growth across products, sectors and geographies and increasingly with large enterprise customers in regulated sectors,” Pichai added.
“Responding to the growth in existing and new customers around the world, we continue to invest in data centres to provide them the fastest most reliable service. We opened new Google Cloud regions in Northern Virginia, Singapore, Sydney and London.”
The cloud market is estimated to be worth around $10 billion, but AWS holds a market share of around 33%, Synergy Research said earlier this year, with revenue more than the next five providers combined. Microsoft is also competing with Google, through its Azure platform.