Alphabet Chief Financial Officer Ruth-Polat
Tencent Technology News, according to foreign media reports, in 2018, the development of Google Cloud services business is mixed, but the company said on Monday that it invested a lot of money in 2018, and will continue to do so in 2019.
In its year-end earnings report released on Monday, Google disclosed that its capital expenditures doubled to $25.5 billion in 2018, up from $12.6 billion in 2017. The huge expenditures are used to build new office buildings to accommodate Google's growing workforce and to build infrastructure such as data centers and servers.
It's hard to say how much capital expenditure is dedicated to Google's cloud business, but the company has made it clear that investing in cloud services is a priority. Google said it established its 18th Google Cloud service area in the fourth quarter of last year and plans to continue expanding in the US and overseas.
In contrast, Amazon spent $11.3 billion on capital expenditures in 2018, including order fulfillment centers such as warehouses and AWS cloud services. Microsoft said it spent $16 billion.
Google is also madly recruiting talent for its cloud services division. In the last three months of last year, the department added more than 4,000 employees. Alphabet's chief financial officer, Ruth Porat, said in a earnings conference call: "The cloud services division has the largest increase in the number of employees, including technology and sales. ”
Borat pointed out that spending on talent and equipment will continue in 2019, but spending will slow down compared to 2018. She said that capital expenditures will be “significantly reduced”.
How to compare Google Cloud Service
Google is stepping up its efforts to develop cloud services to catch up with its competitors.
Google’s cloud services business is lagging behind Amazon’s AWS cloud services and Microsoft, although Google’s cloud services business could be worth billions of dollars.
However, this is hard to say because Google has not announced the revenue of its cloud services. It will be classified as "other” categories. Revenues in this category also include revenue from Google’s hardware devices such as its Play Store and Google Home Smart Speakers.
In the fourth quarter of 2018, Google’s “Other Revenues” category was $6.5 billion, up from less than $5 billion in the same period last year, a significant portion of which came from the Play Store.
Google said on Monday that on its cloud service platform, the number of transactions with a transaction volume of more than $1 million more than doubled in 2018. By the end of last year, its cloud office tools had more than 5 million paying users. But beyond that, it offers little new information to allow people to measure the scale of their cloud services business.
In contrast, AWS Cloud Services generated $7.43 billion in net revenue for Amazon in the fourth quarter of last year.
Microsoft has not disclosed the specific revenue data of its Azure cloud service, so it is even harder to make direct comparisons here.
The Microsoft Cloud Services division, which includes Azure, is known as the "Smart Cloud" department. The division generated $9.38 billion in revenue in the fourth quarter of last year.
However, although the department's name includes the word "cloud", the department also includes many classic software products, including Microsoft's popular database and Windows Server for the server's operating system.
Compared to Microsoft Azure, these are older, larger businesses, but not cloud services that anyone would think.
Most market experts believe that Amazon AWS cloud services are far ahead. A market research firm called Synergy believes that Amazon AWS has a 40% market share in cloud services.
Keep an eye out for the new boss of Google Cloud Services
Of course, for Google Cloud Services in 2018, the biggest news is the change of leadership.
At the end of 2018, Google board member Diane Greene left. Google hired Thomas Kurian to replace her.
Curry went from Oracle. During his ten years at work, he helped build Oracle into a database and application giant, and then led Oracle's cloud services business.
According to its internal indicators, Oracle's cloud services business is growing rapidly. It is working hard to shift its customers from buying their software to leasing their software in their cloud. But Oracle's cloud services have not surprised the technology industry. Therefore, the future performance of Google Cloud Services will be a major test for Curry and Google.
There is a lot of speculation about whether Curry will start a buying spree to help Google's cloud services catch up with competitors.
Google CEO Sundar Pichai remained silent when asked about any big deals or strategic changes on Google Cloud Services under Curryan on Monday. Pichay talked about the “continuity” of the business and stressed the need to focus on the business where the company can get a good return.
Although the investment situation and financial performance have not been disclosed, the cloud service industry is generally considered to be the competition between the three: Amazon leads, followed by Microsoft, Google ranks third. From Alibaba to IBM to Oracle, a variety of other companies are chasing these three companies.