Alphabet’s (GOOGL) Google could soon shed its cloud computing underdog tag if its latest collaboration with Intel (INTC) bears fruit. The tech giants have stated that they are teaming up to help each other benefit from the enterprise shift from legacy data center infrastructure to the cloud.
Under the agreement, Google and Intel will combine their unique expertise in software and hardware, respectively, to create chips that are most suited for tasks like security, container orchestration, machine learning, and the Internet of Things (or IoT) in the cloud environment. Through this partnership, the companies are looking forward to accelerating the enterprise cloud uptake.
Global spending on public cloud services is projected to exceed $140.0 billion by 2020 from ~$70.0 billion in 2015, suggesting a compound annual growth rate (or CAGR) of 19.4%.
Many large companies are still stuck with legacy data centers because they are worried about moving their systems to the cloud in entirety. Others are still concerned about the accessibility of certain applications they have come to rely on if they move their systems to the cloud.
However, Google and Intel are hoping their partnership could produce solutions that would put to rest these and other concerns that have slowed enterprise cloud uptake. For Google, the partnership with Intel could be the boost the company needs to catch up with Amazon (AMZN) and Microsoft (MSFT) in the cloud.
Intel noted that it would enter a cloud-themed deal with Google shortly after it announced plans to invest $250.0 million in developing technologies for autonomous vehicles. The company is looking to develop chips and systems that can make self-driving cars safer and more efficient, which could mainstream these cars more quickly.
As part of these efforts, Intel has teamed up with BMW and Mobileye (MBLY) to develop driverless cars for city streets in the next four years.