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Home » Google Cloud: ‘March to Profitability’
Cloud Wars Minute

Google Cloud: ‘March to Profitability’

Bob EvansBy Bob EvansFebruary 9, 2023Updated:February 9, 20233 Mins Read
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Acceleration Economy Cloud Wars

Welcome to the Cloud Wars Minute — your daily news and commentary show, hosted by Cloud Wars Founder Bob Evans. Each episode provides insights and perspectives around the “reimagination machine” that is the Cloud.

This episode is sponsored by Acceleration Economy’s Digital CIO Summit, taking place April 4-6. Register for the free event here. Tune in to the event to hear from CIO practitioners discuss their modernization and growth strategies.

In this Cloud Wars Minute, Bob Evans reviews Google Cloud‘s latest earnings results and defines how the company has set out on its “march to profitability.”

Highlights

00:31 — Given that Cloud Wars is the greatest growth market the world has ever known, it cannot be expected to follow the “norms and routines of regular business.” Bob says this is not happening, but ultimately, any business that wants to be successful has to make money.

00:56 — For Alphabet and its Google Cloud unit, there is a new level of intensity on the march to profitability, given the recent layoffs across Alphabet and the impression that “times are tight.”

01:22 — Ruth Porat, the CFO of Google Cloud parent company Alphabet, had some interesting things to say on last week’s earnings call about Google Cloud, referencing its “march to profitability.”

01:40 — For the quarter that ended Dec. 31, Google Cloud’s revenue was $7.3 billion, and its loss was $480 million, which equates to 6.6% of total revenue. Going back a year, to Dec. 31 of 2021, Google Cloud’s revenue was $5.5 billion, and its loss was $890 million, which equates to 16% of total revenue. In a year’s time, Google Cloud has greatly narrowed the scope of its loss relative to revenue.

02:25 — On the company’s earnings call, Porat said the company has been “investing ahead of the opportunity” because the growth possibility is so big. Google Cloud will continue to invest alongside the “parallel track of profitability,” which Porat noted the company is heavily focused on. Despite Google Cloud’s path to profitability, it will continue to ensure, “first and foremost, great experiences and outcomes for customers.”

03:33 — It has only been a few years that Google Cloud’s enterprise business has been a complete, end-to-end player, noted Thomas Kurian in his CEO Outlook interview with Bob. Even at this early stage of development, Google Cloud is faced with having to do three things at once:

  • Continue a rapid rate of growth that can fund the infrastructure the company needs
  • Demonstrate how it can grow and spend where necessary to build out the infrastructure around the world while turning a profit
  • Continue to dazzle customers while taking care of the “internal dynamics”

04:13 — Google Cloud is the third fastest-growing of the Cloud Wars Top 10 companies. Bob notes that “we will see how quickly Google Cloud completes this march to profitability.”


WATCH MORE CLOUD WARS MINUTES HERE.

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Bob Evans

Founder, Cloud Wars
Co-Founder, Acceleration Economy

Areas of Expertise
  • Cloud
  • Digital Business
  • LinkedIn

Founder of Cloud Wars and Co-Founder of the Acceleration Economy, Bob leads the strategic direction of the global analyst network and actively covers the Cloud and Digital Business categories. Creator of Cloud Wars Top 10, a ranking and ongoing analysis world's most influential tech companies driving digital business and the digital economy. World-class strategic communicator focused on emerging business strategy, disruptive innovation, and forward-looking leadership.

  Contact Bob Evans ...

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