Google Cloud Revenue Up 53% in Q4 on Strength of Large Deals

Google grew its cloud business in Q4 and fiscal 2019, as the number of deals over $50 million more than doubled during the year.

Sean Michael Kerner, Contributor

February 4, 2020

2 Min Read
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Google's parent company Alphabet reported its fourth-quarter fiscal 2019 financial results on Feb. 3, with cloud making a very strong showing.

For the quarter, Alphabet reported Google Cloud revenue at $2.6 billion for a 53% year-over-year gain. For the full year, Google Cloud revenue came in at $8.9 billion, up from $5.8 billion in fiscal 2018. Of note, Alphabet includes both Google Cloud Platform (GCP) and its G Suite of cloud-based productivity applications in its revenue figure for Google Cloud.

"We are really pleased with the momentum we are seeing in cloud," Alphabet CEO Sundar Pichai said during his company's earnings call.

Google Cloud Platform's growth was led by Google's cloud infrastructure offerings and its data and analytics platform, according to Ruth Porat, chief financial officer at Alphabet. Google has seen strong uptake of the multicloud Anthos offering, she added. Announced at the Google Next event in 2019, Anthos uses the Kubernetes container orchestration system to enable applications to run across both public cloud and on-premises deployments.

A key part of Google's cloud growth is coming from larger deals. Pichai commented that year-over-year, the number of deals over $50 million more than doubled in fiscal 2019. Among the Google Cloud customers that Pichai highlighted during the earnings call are retailers Wayfair and Lowes. He also mentioned that the U.S. Postal Service has chosen Google Cloud AI to improve business processes and customer experience. Travel giant Sabre is another recent Google Cloud win, with a 10-year agreement designed to improve operations and develop new airline hospitality services.

In many cases, the cloud deals touch on other areas of Google's business, according to Pichai. For example, he said, an automotive company can be talking to Google across Cloud, Android Auto, Waymo and, in some cases, the advertising side.

"Overall, every time we are in one of these larger deals, they are effectively looking for a technology partner," Pichai said. "So, differentiation is not just what we bring to the table in terms of Cloud, where we have differentiated capabilities, but in many cases, it's what we bring as Google."

While Google is growing its cloud business, it still trails rivals in the public cloud market. According to fourth-quarter data from Synergy Research Group, Amazon leads the market with a 33%. Amazon reported its fourth-quarter revenues on Jan. 30, with cloud revenues for the quarter reported at $9.95 billion. Microsoft comes in second with an 18% share, while Google is third at 8%.

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About the Author

Sean Michael Kerner

Contributor

Sean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He consults to industry and media organizations on technology issues.

https://www.linkedin.com/in/seanmkerner/

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