Google Challenges Amazon and Microsoft with 28% Cloud Growth
By Jim Lundy
Google Challenges Amazon and Microsoft with 28% Cloud Growth
Google had a record quarter where its Google Cloud revenues were up 28% for a total of $8 billion. This puts them on track to challenge Amazon’s AWS and Microsoft’s Azure.
This blog discusses some of the reasons for the growth.
Why Did Google Cloud Revenues Grow?
The answer is simple. The Google Cloud team executed well over the last year. Operating profit for this quarter was $395 million, compared to a $595 million loss in the same quarter last year. This is a huge leap, which helps their parent company, Alphabet.
The continued investment in AI and in reshaping the Google Cloud team to be more focused on customers is paying off. Many of the announcements in 2022, along with a significant customer push have helped. It starts with leadership from the GCP’s President Thomas Kurian.
Thomas Kurian Leads Google Cloud Platform to the Next Level
For anyone who’s been in the tech industry for a significant amount of time, they knew that when Thomas Kurian left Oracle and joined Google big things were going to happen. However, change takes time and it was clear that Thomas had a lot of work to do to make the company more customer-focused. That said the relationships that Thomas had with thousands of enterprise brands certainly have helped.
Thomas had a reputation for delivery at Oracle and it is clear that he is making Google deliver what customers want. What they are getting is next-generation AI capabilities that are easier to understand and easier to buy than ever before.
One of the things that Thomas said privately to several industry analysts at their customer event in June 2023 was that any tools that the company uses will be made available to customers to use. That is a pretty big statement and one of the upcoming tools that we think will be a game-changer is something called Generative AI App Builder.
Thomas has been the catalyst at GCP and he has nudged GCP into the growth and profitability side of the Cloud Wars.
Challenging Amazon and Microsoft in Cloud AI
One of the things that Aragon Research is suggesting has changed in cloud computing is the complete shift to AI-based cloud computing. While Amazon, Google, IBM, Microsoft, and Oracle all offer AI cloud computing, Google has been quietly working very hard on AI innovation. It shows its organic engineering capabilities when it launched PaLM, a large language model, last year and the PaLM II LLM this year.
Microsoft, on the other hand, bought a large 50% interest in OpenAI, that gives them their own LLM. Amazon is in the LLM Game with Bedrock and its Jurassic-2 LLMs that were developed by the Amazon Lab121 team in Silicon Valley.
Bottom Line
The key thing is access and Google and Microsoft are not standing still. The Microsoft Azure GPT Service is available now and so is Google Vertex AI, which enables custom model building.
One of Google’s advantages is the sheer number of Generative AI and Content AI algorithms that it is making available. Enterprises should ask all of these providers for their roadmap of what is available now and what is coming. There are some significant differences in who has what.
Google is now more customer-focused than ever with flagship AI offerings that are helping to power the growth and profitability of the Google Cloud Unit. We see great competition looming between them, Amazon, Microsoft, and Oracle. Everyone has their favorites but it’s clear that people are looking over their shoulder at Google and saying what just happened?
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