Google Sets Target to be Top-Two Cloud Player by 2023

Google has set a goal of becoming a top-two player, according to a report from The Information on Tuesday. Earlier this year, there was a debate among executives at Alphabet whether the company should leave the public cloud business. It is believed by some staffers if the company fails to achieve this goal, the Alphabet could withdraw from the market completely.

A Google spokesperson, however, stated that the published report was “not accurate,” and argued that the company debated leaving the cloud market in 2018. Indeed, Google is dominant in web search and advertising, but the tech giant is still a small player in cloud computing. Cloud computing involves renting out computing and storage resources to other companies, companies and governments. According to industry research firm Gartner, in 2018 the company lagged Amazon, Microsoft and Alibaba in that market.

Alphabet announced that it reached $8 billion in annualized revenue but does not break out revenue for the Google cloud business. During the third quarter alone, Amazon Web Services, the market leader generated $9 billion in revenue.

Larry Page the Google co-founder, who was Alphabet’s CEO at the time, reportedly thought being a distant third-place in the cloud was not acceptable. But as per the report, he, CFO Ruth Porat, and then-Google CEO Sundar Pichai decided that Alphabet should remain in the cloud business. The company set a five-year budget for capital expenditures of $20 billion, in part to reach that cloud goal.

Source: CNBC