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Alphabet Inc (GOOGL) Is Betting BIG on Google Cloud in 2017

Next 2017 Conference keynote was all about Google cloud and the gains its made against Amazon and Microsoft

Cloud services are a big business that is only getting bigger. When you think of the cloud, the one company that tends to immediately come to mind is Amazon.com, Inc. (NASDAQ:AMZN) — if for no other reason than when its AWS cloud servers go down, half the internet seems to go with them. But Alphabet Inc (NASDAQ:GOOGL) is betting big on the cloud too, and at its Next 2017 event, the company had some big announcements.

Alphabet Inc (GOOGL) Announces Google Cloud Wins at Next 2017
Source: Google

Google cloud is celebrating some much-needed wins, including new partners, a significant steal for G Suite and recognition for topping cloud providers in 2016 for reliability.

Google Cloud Takes Aim at AWS, Azure

The public cloud is currently dominated by Amazon’s AWS, with over 30% of the market — triple the footprint of second-place Microsoft Corporation’s (NASDAQ:MSFT) Azure. Google cloud is in fourth place, trailing International Business Machines Corp. (NYSE:IBM).

The cloud is a huge market already and it’s expected to get far larger, quickly. Forrester recently pegged the expected value of the public cloud — services like AWS, Azure and Google Cloud — to reach $236 billion by 2020.

And Google wants a bigger piece of that pie.

At its Next 2017 conference keynote, the company made the case for choosing Google cloud over AWS or Azure. While noting that it has invested $30 billion in its cloud services, the company rattled off an impressive list of companies that have recently made the move to Google cloud. eBay Inc. (NASDAQ:EBAY) and Colgate-Palmolive Company (NYSE:CL) represent the large corporate side of Google cloud’s capabilities, while popular apps like Pokemon Go and Snap Inc.’s (NYSE:SNAP) Snapchat show off its suitability for hosting consumer apps.

Google cloud’s head Diane Greene, took the opportunity to fire a shot at Amazon’s AWS and the bad PR it’s received for large-scale outages. Chances are, you were affected by an AWS issue at the end of February that slowed or took down thousands of websites, apps and services for hours.

Greene noted that Google cloud has been recognized for topping all cloud service providers in availability for 2016. She puts that availability level at 99.999% reliability, which is very impressive.

It certainly makes a case for switching from AWS.

Big Wins for Google Cloud, and G Suite

Several big wins for Google cloud were also touted at Next 2017.

SAP SE (ADR) (NYSE:SAP) is the world leader in enterprise resource planning software, counting over 345,000 companies as customers. Many large corporations rely on SAP software and it’s big enough to be hosting its own cloud services. However, it has signed on for its SAP HANA database to be hosted on Google cloud, instead of at its own data centers.

As TechCrunch notes, Microsoft and Amazon already had deals signed with SAP. Beating AWS and Azure to host HANA has an even greater significance given that the competition already had an established relationship with SAP.

Also announced at Next 2017 was a big win for G Suite, Google’s cloud-hosted productivity apps. Verizon Communications Inc. (NYSE:VZ) announced it has dropped Microsoft Office for 150,000 employees, moving them instead to Google’s G Suite.

Look for Google to continue aggressively pushing Google cloud services in 2017. The company has been spending big on ramping up its infrastructure, its “Other” revenue (which includes cloud revenue) was up 62% in the last quarter and the majority of its 2,100 hires in Q4 went to cloud operations.

As Google cloud’s Diane Greene said onstage, “I think 2017 will be a good year, too.”

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/03/alphabet-inc-googl-is-betting-big-on-google-cloud-in-2017/.

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