Is Google Cloud Growing?

Google cloud business has grown three-fold, according to Sundar Pichai, the CEO of Alphabet Inc.

In the second quarter results announced by the company, Pichai claims that Google cloud bagged three times more large deals than it did during he same period last year. Large deals here mean any deal that’s worth more than $500,000.

While this may sound impressive, the fact is we don’t know how many large deals that Google had in the second quarter of 2016. What if it had just one big deal, so three large deals this quarter is not really that huge.

This also brings up an important question – is Google’s cloud business growing as fast as the company claims?

If you look through the second quarter results, you don’t get the answer because Google doesn’t specify exactly how much revenue it has earned from its cloud business alone. Rather, what it does is it groups cloud revenue in the “other” category that constitutes all revenue from non-advertisements. So, this “other” category grew by 42 percent to $3.1 billion during the second quarter, which is definitely growing twice as much as its advertising revenue. Growth in the advertising revenue was just 18 percent that amounted to $22.7 billion.

If you thought we can gauge the growth of cloud business by the number of new people recruited for it. There too, we’re stumped. According to Ruth Porat, the CFO at Alphabet Inc, the company hired 1614 new people during this quarter, but doesn’t mention how much of it is for the cloud segment.

Overall, we get no clue whatsoever on how Google’s cloud business is growing and how it stands with respect to its competitors – Microsoft Azure and Amazon Web Services.

Maybe one segment that can throw some light in this regard is the expansion rate. Google has announced that it will be building new data centers to meet the demand for its cloud services, especially its machine learning segment that’s getting an excellent response from customers, according to Pichai.

Though this could mean that Google’s cloud has a wide customer base, yet again it’s hard to ascertain anything without concrete numbers.

It is baffling in a way as to why Google is not releasing such an important data. Is it because it doesn’t want the world to know the performance of Google cloud against Azure and AWS? Or is it because this business segment is not growing as much as it should, so it doesn’t want to damage its reputation in the market by releasing the numbers?

Either way, we don’t know if Google cloud is really growing and for now, we may just have to go with vague statistics like “three times more large deals” until Google decides to release the exact numbers. Or maybe, it’s faster if we have a secret genie that can go and find this out for us.

About The Author
Lavanya Rathnam is a professional writer of tech and financial blogs. Creative thinker, out of the boxer, content builder and tenacious researcher who specializes in explaining complex ideas to different audiences.
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