Google has considered exiting the public cloud business: but ultimately decided to compete for the top two

Google’s parent alphabet executives debated whether the company should pull out of its public cloud business in early 2018, but ended up setting a goal of being in the top two in the field by 2023, the US technology media outlet The Information reported On Tuesday. Some employees believe Alphabet could exit the public cloud market altogether if it fails to do so, the report said.

Google has considered exiting the public cloud business: but ultimately decided to compete for the top two

While Google dominates the web search and advertising space, Alphabet’s share of cloud computing, which involves leasing computing and storage resources to other companies, schools and government departments, is still small. Alphabet lags behind Amazon, Microsoft and Alibaba (NYSE: BABA) in 2018, according to Gartner, an industry research firm.

Alphabet did not release revenue figures for its cloud business, but the company said in July that it had annualised revenue of $8 billion. By contrast, Amazon Web Services (AWS), which currently dominates the market, generated $9 billion in revenue in the third quarter alone. Microsoft did not specify revenue figures for its Azure cloud business, but according to analyst Jay Vleeschhouwer, a securities firm, Azure’s third-quarter revenue was $4.3 billion.

Larry Page, google co-founder of Alphabet at the time, said it was unacceptable to be in third place in the cloud computing space, which was far behind, The Information reported. But in the end, It was reported that Alphabet, Alphabet CFO Ruth Porat and Sundar Pichai, then CEO, decided that Alphabet should continue to do business in the cloud. The company has a $20 billion five-year capital expenditure budget, in part because it wants to achieve its goal of finishing in the top two in the public cloud space.

In early 2019, Thomas Kurian, a former Oracle executive, replaced Diane Greene, vMware co-founder, as head of Alphabet’s cloud business. Earlier this month, Mr. Pichai replaced Mr. Page as Alphabet’s CEO.

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