Poor old Google. Its cloud division only brought in $8.9bn last year. So it's chucking a few billion at US offices and data centres

It's Amazon how much some people are making off cloud... about Jeffin' $40bn

The new Google data center  being built near Delfzijl in the province of Groningen. - pic taken october 2019
Over land and sea: A new Google data centre being built near Delfzijl, in Groningen, in the Netherlands.

Google will pump more than $10bn into offices and data centres across the US this year as it gears up for a fight with rival clouds Amazon Web Service and Microsoft Azure.

The Chocolate Factory's new investment will focus on 11 states: Colorado, Georgia, Massachusetts, Nebraska, New York, Oklahoma, Ohio, Pennsylvania, Texas, Washington and California.

"These investments will create thousands of jobs – including roles within Google, construction jobs in data centers and renewable energy facilities, and opportunities in local businesses in surrounding towns and communities," said Sundar Pichai, CEO at Google and its parent Alphabet.

The new investment comes as Google races to catch up with its hyperscaler rivals, Azure and AWS. Last week, the company's newly appointed cloud division chief, Thomas Kurian, said he would restructure the business to "improve how we market, partner and engage with customers". As part of the changes, up to 50 staffers were cut.

The former Oracle exec – and twin brother of NetApp supremo George Kurian – has pushed a greater emphasis on sales and improving support for legacy tech. As part of that, Google recently released a set of new support and response options to woo enterprises to its cloud services.

Last night, the company's cloud division entered into a deal with Los Angeles-based service provider SADA to resell $500m in Google cloud services over the next three years. The deal covers installation and consulting of call centres, hybrid cloud and analytics applications.

Data, data everywhere

Bit barns are not the only investment Google is making to push its cloud biz: earlier this month, the search-'n'-ad giant completed the $2.6bn purchase of Looker, which provides pretty graphs for sales and web analytics. Separately, it also dropped $2.1bn to munch Fitbit, the second largest company in the wearables market, last year. Many observers said it was not hardware that was the most attractive part of the deal, but Fitbit's data on more than 25 million users.

Google Cloud's market share almost doubled last year to 5.8 per cent, according to Canalys. But that figure is still well behind AWS and Azure, which take up 32.3 per cent and 16.9 per cent market share respectively.

Hyperscalers increasingly dominate the global data centre market. A recent Synergy Research report said hyperscalers accounted for more than one-third of all spending on data centre hardware and software in the first three quarters of 2019, more than double what they spent in 2014.

The US accounts for 13 of Google's 21 data centres globally. The company's investment in other regions of the world has been comparatively small. In Europe, it runs data centres in the Netherlands, Ireland, Belgium, Finland with a €600m site in Frederica, Denmark, expected to be completed in 2021 – bringing its total spend in the region to €2bn since 2009. It also has data centres in Singapore, Taiwan and Chile.

Google's umbrella company, Alphabet, recently reported (PDF) that its costs and expenditures for 2019 had jumped 14 per cent for the year to $127.7bn. Revenues rose 19 per cent year-on-year to $162bn. Nonetheless, the company's cloud division brought in $8.9bn – a paltry sum compared to AWS, which generated $40bn in 2019. Microsoft does not break its Azure revenue out from its Intelligent Cloud segment, which sold $38.9bn in services in its fiscal 2019. ®

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