Why Google Is Focusing on Partnerships for Its Cloud Solution



Google has been making lot of enhancements to its cloud solution

Google (GOOG) has made a lot of strides in its cloud business over the last year or so. After appointing Diane Greene, the cofounder of VMware (VMW), to lead Google’s cloud business in November 2015, Google has become an aggressive player in the cloud infrastructure market.

Google has been integrating its machine learning and data analytics capabilities with its cloud technology, which Google claims to have differentiated the company from its competitors. Last quarter, Google acquired Apigee for $625 million. Apigee provides programming tools to integrate different software applications, which is becoming a key feature for the development of cloud-based solutions.

Google also made significant developments for its G Suite, which is its cloud-based productivity and collaboration solution. G Suite now has more than 3 million paying customers and is providing stiff competition to Microsoft’s (MSFT) Office 365.

Cloud market shares

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Google is forging partnerships with other companies

These developments are helping Google forge new partnerships with companies such as Intel (INTC), Slack, and Red Hat (RHT). A partnership with Intel was important for Google. Under this agreement, Google and Intel will combine their expertise in software and hardware, respectively, to create chips suited for tasks like machine learning, security, and the Internet of Things (or IoT) in the cloud environment. Google also provides its cloud infrastructure services to Snap (SNAP), which had its IPO earlier this month.

Despite these efforts, Google is trailing behind Amazon (AMZN) a long way in the cloud services market. According to a report from Synergy Research Group and as the chart above shows, Amazon Web Services had a share of 40% as of 4Q16 while Microsoft (MSFT), Google, and IBM (IBM) had combined market share of 23%.


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