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Why Spotify Is a Big Win for Google’s Cloud Business

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Spotify is the leading player in the paid music subscription market

Earlier in the series, we discussed the efforts that Google (GOOG) is making to improve its position in the cloud services market, which is currently led by Amazon (AMZN) and Microsoft (MSFT).

Recently, Google managed to win a new customer for its cloud offering in Spotify.

Spotify is the largest player in the paid music streaming industry, with 20 million paid subscribers. Although Spotify is the leader in this market, Apple (AAPL) has started to become a big threat to Spotify.

In the span of just six months since the launch of Apple Music, the company has acquired 10 million paid subscribers for its music streaming service. It took Spotify six years to hit the 10 million mark.

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Spotify is a big win for Google

Despite the threat from Apple Music, Spotify is a big win for Google’s cloud ambitions. According to a report from the Wall Street Journal citing Spotify’s vice president Nicholas Harteau, “Google’s ability to analyze the massive amounts of data tipped the scales.”

Amazon, on the other hand, is trying to develop new features to compete with Google in the big-data space, a term used to analyze large amounts of data sets. In October last year, Amazon launched its big-data analytics and visualization tool, Amazon QuickSight.

According to Amazon’s website, “After talking to many customers about their Business Intelligence [BI] needs, we believe that QuickSight will be able to handle many types of data-intensive workloads including ad targeting, customer segmentation, forecasting & planning, marketing & sales analytics, inventory & shipment tracking, IoT device stream management, and clickstream analysis.”

For diversified exposure to Google, you can consider investing in the Technology Select Sector SPDR ETF (XLK). XLK invests 5.5% of its holdings in Google.

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