Google and its rivals are using new weapons in the battle for market share in cloud computing. It’s a big investment in a company that agrees to sign on to the service.
Thomas Kurian has been CEO of Cloud since 2019
The unit is utilizing a $ 142 billion treasure chest to make it more attractive to its customers. Google has been Univision Communications Inc for the past year.or
CME Group Ltd,
Next, you’ll win a multi-year commitment to cloud services worth over $ 1 billion.
This deal makes Google one of the most aggressive of some big companies Trying to get the ground upon
Cloud market leader.
It has also invested in several startups as part of transactions involving the use of the cloud. Last year, Oracle sought to purchase a major stake in TikTok as part of a deal to make a Chinese-owned social media app use cloud services.And this month is the biggest deal ever Planned $ 28.3 billion acquisition Medical record company
Early strategies have helped Google gain market share in the huge and rapidly expanding industry that is key to growth. Google currently claims 6 percent of the cloud market, well below Amazon’s 41 percent share and Microsoft’s 20 percent, but up 1 percentage point from the previous year.
“No one wants this’buy’customer, but if you’re in 3rd or 4th place, you need to be creative,” said Constellation Research Inc, which focuses on enterprise technology. Holger Mueller, an analyst at.
This investment highlights how tech companies’ strong cash flow gives them a greater advantage over smaller competitors in selling cloud infrastructure services. These companies can build multi-billion dollar data centers and make the huge infrastructure investments needed to subsidize the cost of migrating clients to cloud systems. This helps explain why the three companies control two-thirds of the market.
A Google Cloud spokesman said the feature has earned a lot of customers, adding that investment is part of their strategy. “In some cases, Google seeks investments and partnerships in attractive growth areas, which is a common practice in many companies within the enterprise industry,” he said.
Alphabet investors see Google Cloud as the most promising growth area and the best opportunity to diversify beyond the online advertising business, which accounts for 80% of sales. The cloud unit, which began disclosing financial information in 2020, will generate more revenue than in 2020 in the first nine months of 2021 and is expected to increase by 50% to $ 19.26 billion for the full year. I am.
These profits result in high costs, and the company is actively spending on infrastructure development and expanding its sales team. During the January-September period, Google Cloud reduced its operating loss to $ 2.2 billion, half the previous year.
Google’s transactions target customers of all sizes and sectors. Over a year or so, we have invested $ 1 billion. Futures exchange Company CME Group; $ 450 Million to Home Security Providers
; When Unpublished total Univision, a Spanish media company, and Tempus Labs Inc., a health tech startup, all have long-term cloud computing agreements with Google.
According to former Google Cloud executives, Klean has played a central role in pioneering investment strategies. Prior to arriving from Oracle, Google prioritized the development of new technologies to attract customers over traditional sales. He revamped that approach, Addition of sales staff Sweetness performance bonus.
Microsoft Announces Investment and Cloud Contract with Food Delivery Startup
Grab Holdings Ltd
According to a former Google Cloud executive, Kurian came up with the idea of adopting a similar strategy to catch up with his rivals. This investment was designed to give companies another reason to choose Google over rivals and to convince them that Google is financially committed to developing technologies that will benefit their business. rice field.
Microsoft continues to build cloud partnerships by leveraging its investments in start-ups. One of its biggest bets Being a stakeholder
General Motors Ltd
Cruise, a self-driving car startup. Under the terms of the agreement, Cruise will use Microsoft’s Azure cloud computing platform to deploy self-driving car services.
As Microsoft progressed, Google subsequently took part in a $ 200 million round of investment in Chicago-based Tempus. It uses artificial intelligence to improve patient care. As part of its 2020 investment, Google offered a significant discount for Tempus to move from Amazon to the cloud, a person familiar with the transaction details said.
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Under the deal, Tempus agreed to spend at least $ 20 million on Google Cloud in the first year, he said. This means that Google’s revenue from this transaction could exceed its investment within a few years.
Tempus did not respond to the request for comment. Univision’s CEO said Google’s investment was a separate corporate negotiation from the cloud deal, but Google called it a true partner committed to evolving its business.
The search company has taken a broader approach in partnership with ADT. In 2018, ADT Chief Operating Officer Don Young said home security companies were considering migrating some of their on-premises data to the cloud. It eventually met with a Google representative who proposed a deal that went beyond cloud computing and included a partnership between ADT and Google’s Nest smart home business. $ 450 Million Investment in ADT..
Young said ADT would put some data on Google Cloud regardless of investment, but added that the company has been spending more on Google’s cloud services since then.
“Yes, I would have been trading in the cloud,” Young said. “But what exactly is the cloud transaction we made? I don’t know.”
During negotiations to move the trading system to Google Cloud, CME Group CEO Terry Duffy invested in a solid key to trading. “I wanted a partner, not just a cloud provider,” Duffy said in an interview.
At the time, Mr. Klean said, “Equity investment represents our commitment.” He said Google has ensured that it will allocate the best talent to support CME Group’s cloud efforts.
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—Alexander Osipovich contributed to this article.
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Google and Tech Rivals Leverage Cash Reserve to Realize Cloud Ambition
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