Google poured billions into its cloud business in 2018, outspending both Amazon and Microsoft

Google's cloud computing efforts were a mixed bag in 2018 but the company on Monday said that it invested heavily in 2018, and will continue do so in 2019, albeit maybe not at the same pace.
During its year-end earnings report on Monday, Google revealed that it doubled its capital expenditures in 2018, to $25.5 billion, up from $12.6 billion in 2017. The hefty spending went towards everything from new office facilities to accommodate Google's growing workforce to bolstering its infrastructure such as datacenters and servers.
It's tough to say exactly who much of that capex went towards Google's cloud business specifically, but the company has made it clear that investing in the cloud is a priority. Google said it launched its 18th Google Cloud region in the fourth quarter and pointed to plans for continued expansion in the US and abroad.
In comparison, Amazon spent $11.3 billion cash on capex in 2018, split between fulfillment operations (like warehouses) and AWS, it said. And Microsoft said it spent $16 billion.
Google also hired madly for its cloud unit, with more than 4,000 new hires in the final three months of the year. "The most sizeable increases were in cloud, for both technical and sales roles," Alphabet CFO Ruth Porat said during the conference call.
Porat noted that spending on talent and equipment will continue in 2029, though the pace will cool off compared to 2018. Capex, she said, will "moderate quite significantly."
How does Google's cloud business compare?
Google is spending to catch up. Revenue from its cloud business lags Amazon Web Services and Microsoft, although Google does likely have a multibillion cloud business. It's a bit tough to tell because Google doesn't break out cloud revenue. It lumps it in its "other" category which also includes the revenue it makes from its Google play app store and its hardware devices like Google Home.
That "other revenue" category was $6.5 billion in the fourth quarter of 2018, up from just under $5 billion for the year-ago quarter and a sizeable portion of that is generated by its app store. Google noted on Monday that the number of Google Cloud Platform deals worth more than $1 million more than doubled in 2018 and that it ended the year with more than 5 million paying customers of its cloud productivity tools, but otherwise offered little new information by which to measure the size of its Cloud business.
For comparison, AWS generated $7.43 billion in net cloud sales for Amazon in the fourth quarter.
Microsoft also doesn't disclose specific revenue figures for its cloud, Azure, so a direct comparison here is even harder to noodle out. The unit that includes Azure is called "Intelligent Cloud" and it generated $9.38 billion in the same quarter. However, despite putting "cloud" in the unit's name, that unit includes a lot of classic software products, including Microsoft's popular database and Windows Server, its operating system for servers. Those are both older, massive businesses compared to Azure and are not what anyone would consider a cloud service.
Most market experts believe that AWS is way ahead. One researcher, Synergy, puts AWS at 40% market share in cloud.
Keep an eye on the new boss
Of course the big news for Google's cloud efforts in 2018 was its change of leadership. Near the end of 2018, Google board member Diane Greene left. Google hired Thomas Kurian to replace her. He left Oracle where he helped build Oracle into a database and applications giant during his decades there, and then lead Oracle's cloud efforts. Oracle's cloud is growing quickly by internal metrics as it moves its customers from buying its software to renting its software on its cloud. But Oracle's cloud is not exactly taking the tech industry's breath away, so his performance at Google Cloud will be a test for him and the company.
There's been a lot of speculation about whether Kurian will embark on an acquisition spree to help Google's Cloud catch up with the competition. Google CEO Sundar Pichai kept mum on Monday when asked about any potential big deals or changes in strategy under Kurian. Pichai spoke of "continuity" and focusing on the parts of the business where the company is seeing good returns.
Even with all the shrouding of investment and financial results, the cloud industry is often considered a three-player race, with Amazon in the lead, Microsoft on its heels, Google in third and a variety of players, from Alibaba to IBM to Oracle, in the chase pack.
source businessinsider
Industry: Cloud News

Latest Jobs
-
- CONTRACT- Security engineer AWS | SIEM. OUTSIDE IR35
- London
- Outside IR35
-
Security engineer AWS | SIEM. CONTRACT OUTSIDE IR35 Deep understanding of AWS Security (Security Hub, Guard duty, Firewall Manager etc) Extensive experience with the development, implementation, monitoring and optimisation of SIEM solutions. Experience working within a cloud migration environment. Additional key experience with Hardening, DevOps, PKI etc Financial Service experience preferred. London Outside IR 35
-
- Architect | Cyber Security | Public sector Permanent
- Cheltenham
- N/A
-
Architect | Cyber Security | Public sector Permanent Seeking a Security Architect with Public Sector / Cloud Security experience for a lead technical role. Public sector security architecture design experience essential. (MoD) Current project experience delivering HLD / assurance of computer networks / build evaluations. Active Security clearance required. If you are open to hear about a new / exclusive opportunity where you are interested to be more than a number in a company reach out to team today. Chris.holt@dclsearch.com 07884666351
-
- CIAM Architect Azure B2C
- N/A
- N/A
-
We are seeking a highly skilled and experienced Azure B2C CIAM Architect for a contract starting on Jan 2024. As an Azure B2C CIAM Architect, you will be responsible for designing, implementing, and deploying an new Azure B2C Solution . Responsibilities: Design and implement an Azure B2C-based CIAM solution that meets the needs of our clients organization. Maintain and support the Azure B2C-based CIAM solution. Provide training and support to our employees on the use of the CIAM solution. Background designing, implementing, and maintaining CIAM solutions. Experience with cloud-based identity and access management (IAM) solutions. Experience with OAuth, OpenID Connect,and SAML. Excellent written and verbal communication skills
-
- Senior IAM Consultant
- Germany
- Upto €110,000 depending on level of position
-
Senior IAM Consultant is needed to help lead and deploy IAM Projects for this expand IAM Consultancy The ideal candidate will have a deep understanding of IAM concepts and technologies, as well as experience in deploying and managing complex IAM solutions. Responsibilities Lead the deployment of IAM solutions for our clients Work with clients to understand their IAM requirements and design solutions that meet their needs Configure and implement IAM solutions using best practices Integrate IAM solutions with other enterprise systems Provide training and support to clients on the use of IAM solutions Stay up-to-date on the latest IAM technologies and trends We are looking for an experieneced IAM Consutlatn with: Strong understanding of IAM concepts and technologies,including identity lifecycle management,access control,and authentication Experience in deploying and managing complex IAM solutions Experience with IAM products and solutions,such as SailPoint,One Identity Manager,and Azure Active Directory Excellent communication and interpersonal skills Ability to work independently and as part of a team Fluent in German Candidates witll need to live and have the right to work within Germany to be considered.