uploads///Google Other Revenue

What Led to the Growth of Google’s Other Revenue

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Aug. 2 2016, Updated 11:07 a.m. ET

Google’s Other business improved in 2Q16

Google’s (GOOG) Other revenue, which comprises its cloud, Google Play, and hardware revenues, is gaining momentum. In 2Q16, its Other revenue rose by 33% YoY (year-over-year) to $2.2 billion. Much of this growth has been attributed to the strong performance of its cloud business.

Although the segment accounts for a small portion of the company’s overall revenue, it certainly offers a huge potential for growth, considering the strong demand of cloud services. The cloud services market is the latest megatrend in the technology space. Big names such as Microsoft (MSFT), Amazon (AMZN), and IBM (IBM) are pouring billions of dollars into their cloud businesses.

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Google faces stiff competition in the cloud space

Google has suddenly become a serious player in the cloud services market. Until recently, it had allowed rivals to command majority shares of the cloud infrastructure services market, as can be seen in the chart above.

Google claims that the main factor that will differentiate it from its competitors will be its serving enterprises with machine learning capabilities integrated with cloud technology. The company recently launched two cloud machine learning APIs (application program interface) for speech and natural language.

Despite the company’s efforts to gain a fair share of the cloud market, it has much to catch up on, with market leaders Amazon Web Services and Microsoft’s Azure bulking up their infrastructures in the cloud space and gaining significant leads.

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