This archive report was first published on 31 July 2020.
Google Cloud's revenue growth has slowed, but the company still managed to beat expectations in its latest earnings report. In Q2 2020, Google Cloud generated $3 billion in revenue, a 43% increase from the same period last year.
While this growth is lower than the 52% year-over-year increase seen in the previous quarter, it is still a significant achievement. The slowdown is attributed to the fact that Google Cloud Platform (GCP) infrastructure offerings and data and analytics services are now more established, and the company is facing increased competition from rivals like Amazon Web Services and Microsoft.
However, Google Cloud's growth is not the only bright spot in Alphabet's earnings report. The company's earnings beat expectations, despite a slight decline in overall revenue. This is the first time Alphabet has seen a quarterly revenue decline since going public.
“GCP maintained the strong level of revenue growth it delivered in the first quarter, and its revenue growth was again meaningfully above cloud overall,” said Google CFO Ruth Porat.
Google Cloud's success can be attributed to its flagship data warehouse product BigQuery, which was recently announced to be available on multiple clouds, including those of rivals. This move is expected to increase adoption and growth for the company.
Alphabet CEO Sundar Pichai also highlighted the importance of Google Cloud's products, particularly Google Meet, which has been critical in helping businesses and organizations connect and collaborate during the pandemic.
Despite trailing behind cloud rivals, Google Cloud is still investing heavily in hiring and building new data centres. Since Google Cloud CEO Thomas Kurian joined early last year, the company has been winning over talent from enterprise stalwarts like Oracle and SAP.
