Google and Microsoft have turned to a brand new technique which has seen each firms make massive investments in different companies in an effort to bolster their cloud market share and higher compete with AWS.
After changing Diane Greene because the CEO of Google Cloud again in 2019, Thomas Kurian hasn’t been afraid to faucet the corporate’s $142bn money reserves to appeal to extra clients to the service. In truth, Google has made sizeable investments within the business security system supplier ADT ($450m), the Spanish-language media firm Univision, the healthtech startup Tempus Labs and the futures-exchange agency CME Group ($1bn).
These investments are a part of Google Cloud’s bigger technique to deliver extra clients to its platform and to date, they’ve already began to repay with many firms making multiyear commitments to use its cloud providers which are price as a lot as $1bn or extra in accordance to a new report from the Wall Street Journal.
However, Google is not the one cloud computing supplier attempting to develop its market share via investments as Microsoft has taken stakes in a number of startups in offers that will see them use its cloud whereas Oracle’s deliberate $28.3bn acquisition of the medical-records firm Cerner has led to a major enhance in its personal cloud enterprise.
Investments to acquire cloud market share
This new technique of creating strategic investments to deliver companies to its cloud appear to be working for Google because it now has six p.c of the cloud market (up by one p.c final 12 months) although the corporate continues to be far behind Microsoft with a 20 p.c share and the chief within the house, Amazon with a 41 p.c market share.
In an announcement to the Wall Street Journal, a Google Cloud spokesperson admitted that investments and partnerships in different companies are one of many methods the corporate is attempting to deliver extra clients to its cloud although it has attracted many on its capabilities alone.
Microsoft is using an identical technique and certainly one of its largest investments to date has been a stake in General Motors’ driverless-car startup Cruise which is able to use Microsoft Azure to roll out its autonomous automobile providers. Not to be outdone, Google then took half in a $200m funding spherical for the startup Tempus which makes use of AI to enhance affected person care.
Even as each Google and Microsoft strive to acquire floor within the cloud wars, recent AWS outages have proven that extra competitors within the house can profit companies, governments and even shoppers.