Google Cloud securing ‘larger, more strategic’ deals as latest financials announced

Google CEO Sundar Pichai says his company’s cloud operations are ‘growing well’ with larger, strategic deals in place as more impressive financial results were revealed.

The company’s parent, Alphabet, posted Q118 financials earlier this week with $31.15 billion (£22.3bn) in total revenue for the quarter. Advertising revenues were at $26.6bn, while ‘other’ revenues – of which Google Cloud is a part – hit $4.35bn, a 35% increase on this time last year. Overall revenues were up 25% on the previous year’s analysis.

Earlier this year, Pichai said Google Cloud was running at more than $1bn per quarter while in July he said the company had tripled the number of its big cloud deals – rated at $500,000 or more – year over year.

“In Q1, we saw increasing momentum,” Pichai said of Google’s cloud bets. “We are growing across the board and are also signing significantly larger, more strategic deals for cloud. Our security capabilities, the easy-to-use advanced data analytics and machine learning solutions and the secure and industry-leading collaboration platform, G Suite, are winning customers over.

“Google Cloud is growing well,” Pichai added.

While cloud was an important factor in the Google chief exec’s remarks to analysts, machine learning and artificial intelligence (AI) – and how AI is ‘unlocking new opportunities for everyone’ – was evidently the keynote theme.

The combination of machine learning on Google’s cloud has the potential to be an irresistible one. Back in 2016, as regular industry watchers will recall, Evernote cited the capability as key to it becoming a Google customer, while yesterday it emerged Total is working with Google Cloud to develop AI solutions for analysing oil and gas data.

Pichai also noted the importance of Google’s expanding data centre and cable empire, saying the company’s global infrastructure ‘continues to expand to support demand.’ The launch of five new data centre facilities, in Finland, Hong Kong, Los Angeles, Montreal and the Netherlands, alongside three subsea cables, were a key highlight for the company in the quarter. Google also secured an important renewable energy target earlier this month.

Alongside this, Google Cloud announced a series of updates to G Suite focused around security and our old friend, AI. On the security side, a new ‘confidential’ mode for Gmail was launched, alongside bigger bolder security warnings so users theoretically can’t miss the fact they are about to open a phishing email. On the AI front, the new features, such as nudging – Gmail proactively reminding you to follow up on unresolved messages – aim for greater productivity and ensuring users don’t ‘drop the ball’, as Google puts it. According to research issued alongside the release, nudging will prevent 1.6 million dropped balls for Google’s users each month – a painful problem indeed.

You can read the full financial report here.