Google’s new cloud service Google Cloud lost $5.6 billion in 2020. This was in spite of gross revenues of $13.06 billion. The news came as Google released its financial report for quarter four 2020. Google Cloud still lags behind both Amazon and Microsoft.
Everyone is talking about cloud computing these days. It’s the future for storing information. Now you can get on line storage for all of your files when you buy new software like Microsoft Office. In this way it does not matter where in the world you are, or on whose computer you do your work: you can save and/or backup everything in the cloud.
MS Office is now also offered entirely on line. This software is an example of software as a service which is offered through cloud computing.
Google competes with Microsoft Office directly with its own suite of programs for writing, spreadsheets and presentations. This is not even a software to be downloaded. It is all done through an online cloud.
Also, as tablets replace full computers there will be more need for online storage instead of hard drive space. Tablets and notebook computers in general do not offer the amount of storage as desktops.
And businesses can save a great deal on expenses by using cloud storage. They no longer need to invest in the hardware for on location servers. And with decentralization of workforces, especially during the Covid-19 pandemic, using cloud services let people who never wok in the same location share information.
Google, in general, had a strong fourth quarter in 2020, with revenues of $56.9 billion, driven by Search and YouTube.
Sundar Pichai, CEO of Google and Alphabet, said: “Our strong results this quarter reflect the helpfulness of our products and services to people and businesses, as well as the accelerating transition to online services and the cloud. Google succeeds when we help our customers and partners succeed, and we see significant opportunities to forge meaningful partnerships as businesses increasingly look to a digital future.”
So why did Google Cloud lose money? Probably because of new investment in infrastructure and Google’s continued expansion in the service. All of those new servers to hold people’s data, the staffs who maintain them and the additional service, sales and advertising to promote it cost a lot of money.