Google finally gains traction in cloud services

Google finally gains traction in cloud services

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-plus 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 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, up 42 percent from this time last year.

Google Cloud Platform considered trustworthy

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 in production equipment, facilities and data center 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 in Q1 of 2017 with 43 percent year-over-year growth, put Microsoft at $1.5 billion with 93 percent growth, and put both Google and IBM well under $1 billion, with 74 percent growth for Google and 38 percent for Big Blue.