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Why Alphabet’s Google Is Investing in Undersea Cables

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Facebook helping Google in cable systems work

Alphabet’s (GOOGL) Google is planning to build three undersea cable systems, a project it expects to finish by 2019. The first cable system is expected to link Los Angeles to Chile in South America. The second cable is expected to link the United States (SPY) to Denmark and Ireland in Europe (EFA). Google’s third submarine cable system is expected to link Hong Kong to Guam.

Google is partnering with Facebook (FB) to develop the cable system linking the United States to Denmark and Ireland.

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Boosting cloud business

The three cable systems that Google plans to lay down are part of the company’s cloud computing business. Google is hoping that building these submarine cables in addition to the several cable systems it has in place already will enable it to deliver better cloud computing services as it tries to lure customers from cloud rivals Amazon (AMZN) and Microsoft (MSFT).

Google is fighting hard to catch up to cloud computing leaders Amazon and Microsoft. According to Synergy Research, through its Amazon Web Services (or AWS) platform, Amazon controls more than one-third of the world’s cloud computing market.

Five new cloud regions

Google’s new submarine cable investments could see the company activate more cloud regions. The company plans to open its Montreal and Netherlands cloud regions in the current quarter. These will be followed by three more regions in Los Angeles, Finland, and Hong Kong.

The new cable systems and regions will ensure that Google Cloud can continue to deliver the high performance that customers expect even if servers in one region break down.

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