Google considered shutting down its cloud division altogether two years ago. Instead, the company has set itself the goal of becoming the largest player in the market. Some employees believe that if the company doesn’t meet that target, Google would shut down.
Google would have considered pulling the plug on Google Cloud at the beginning of 2018, various sources tell The Information. Then Alphabet CEO Larry Page would have found it unacceptable that Google as a cloud provider lagged far behind competitors such as Amazon and Microsoft. Ultimately, Page, together with Google CEO Sundar Pichai, decided to remain active in the sector. The company then set itself an ambitious goal to become one of the two largest cloud providers in the world by 2023. Google would be willing to invest twenty billion dollars until that period. The company denies that there were such conversations in 2018. “That is simply not true,” it writes in a response.
According to sources at The Information, many employees of Google’s cloud division believe the company will still want to throw in the towel if it doesn’t meet the target by 2023. Google makes much less money with its cloud division than Amazon and Microsoft, which are the two main providers in the world in that area. Google had revenues of $8 billion in 2018. Amazon’s Web Service made $9 billion per quarter that year. For Microsoft’s Azure, that revenue is estimated by analysts at around four to five billion.
Google announced a partnership with several companies on Tuesday. These include security companies such as McAfee and Palo Alto Networks, but Google is also partnering with Citrix so that G-Suite customers can use Citrix Workspace on the platform next year. Several other companies are also joining the platform so that they can make their own tools and software available on it.
Update: comment from Google has been added.