Google Cloud has posted revenues of $3.83 billion (£2.8bn) for its most recent quarter – but lost more than $5bn for the year as the company met its promise of giving more details.
The figures for Google Cloud represent 6.7% of overall Alphabet revenues, which can be compared with AWS comprising almost a tenth of total Amazon revenues. Revenues saw an uptick of 46.6% year over year, and up 11% on the previous three months.
Yet Google Cloud is nowhere near a profitable business – for now, at least. As this publication reported on Q3 in October, Alphabet disclosed that it would break out Google Cloud figures as a separate reporting segment, having first reported revenues this time last year. CEO Sundar Pichai said the company was ‘making an opportunity for Google Cloud in this growing global market.’
The result: the company posted a loss of $5.61bn for the fiscal year of 2020, and a $1.24bn loss for the most recent quarter.
While investment continues to be pumped in, Pichai noted green shoots with regard to expanding customers. Deals pegged at more than $250 million have tripled year over year, as well as ‘several’ billion-dollar deals signed. Pichai said Google Cloud’s products were ‘mature and highly differentiated in many segments.’
Ruth Porat, Alphabet CFO, added the company was ‘on track’ to meet its near-term goal of tripling the size of its cloud direct sales team.
Of more interest to industry watchers exploring the long-term trends is how Alphabet will encompass its various lines of business for big-ticket customers – with Google Cloud as its centrepiece. Pichai cited Ford, a customer win announced earlier this week, as an example: using Google Cloud, Android, as well as other apps and services, for digital transformation.
Fielding an analyst question, Pichai noted this was a long-term game. “On cloud, we see how early customers are in the shift,” he said. “We see the large [total addressable market] ahead, and the market dynamics. And our momentum, in the context of the market, is the framework… we are thinking about, the scale of investments and the pace of investments.
“Obviously it’s an area in which the longer you are in, the cohorts add up and so contributes more, and the ecomomies of scale start working as well,” Pichai added. “But we are definitely investing ahead to making sure we are able to serve the customers globally across all the offerings they are interested in, and that’s how we are thinking about it.”
Google Cloud had various updates in the most recent quarter. From a customer side, there was more detail shared on the major contract signed with Deutsche Bank, as well as an extension of a partnership with Nokia for cloud-native 5G services in January. The company also signed an agreement with OVHcloud in January to help European organisations with cloud data security.
The company also received something of an accolade last month. The annual Cloud Report from Cockroach Labs declared Google Cloud Platform (GCP) to be the best hyperscale performer across all areas of throughput.
You can read the full Alphabet earnings release here.
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