Google Spends $30 Billion on Cloud Service

undefinedIf there’s one question that the top brass at Google are sick of being asked it’s this: How are you going to catch up in the cloud market to Amazon and Microsoft?

Google’s answer is pretty straightforward: the old-fashioned way. It plans to build out its tech, making it reliable, affordable, with just enough differentiation to attract customers.

And when it lands those big customers, it will show them off as references. If Google builds it, they will come.

That’s what Day 1 of Google’s two-day conference for cloud customers this week was all about. Instead of announcing a whole bunch of new products (that will happen on Day 2) Cloud chief Diane Greene used the three-hour keynote to showcase marquee customers. Google CEO Sundar Pichai and chairman Eric Schmidt took the stage as well, in a show of support and commitment from the top of the company.

Proud $2 billion home of Snap

In fact, Schmidt’s pitch to the 10,000-person crowd was pretty simple, “Just get to the cloud now. Just go there now. There’s no time to waste anymore.”

His rationale was equally simple: “We put $30 billion into this platform. I know this because I approved it,” he only half joked. “Why replicate that?”

He even went so far as credit Google’s cloud as one key ingredient in fast-growing mobile app Snapchat’s success. Snapchat’s parent company, Snap, just went public in a blockbuster IPO that valued the young company at $33 billion (though the stock has since sunk a bit, valuing it at a mere $24 billion on Wednesday).

How could Snap have made such an incredibly fast rise to the top “with so little capital? They used our infrastructure,” Schmidt said.

Snap also just committed to spend $2 billion with Google over the next five years, “a deal hugely successful for both of us” because Snap won’t own a $2 billion data center, nor have to pay “$3 billion and $4 billion” for data centers, he said. (However, there’s some reason to believe that Snap is at least investigating building its own data centers, because there comes a point when it is cheaper to own than to rent.)

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Source: Business Insider

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