Google does not want to be the third party: if it does not beat Amazon or Microsoft in 2023, it plans to abandon its Google Cloud platform
Amazon and Microsoft dominate the cloud. With Amazon Web Services and Azure, both companies have managed to become absolute benchmarks in an industry in which Google seemed to have many more ballots due to their experience in the internet field.
However, the future of Google Cloud could be compromised by the situation. According to The Information, in early 2018 Alphabet's top managers met to plan their cloud strategy. Sources close to those plans reveal that if Google is not number 1 or number 2 in the Cloud market in 2023, it could decide to completely abandon that segment.
Google, a long way from Microsoft and Amazon
Although Google dominates the search and online advertising segment, its role in providing cloud infrastructure is far less relevant than might be expected. Both Amazon and Microsoft have managed to come up with increasingly powerful alternatives that join those of other large ones such as Alibaba, IBM or Rack space.
In Alphabet they have not made clear what the specific income of their cloud platform is, but in July they did indicate that they had managed to reach 8,000 million annual income, a figure that is small compared to the 9,000 million income of Amazon Web Services in the third quarter of 2019. There are no official data from Microsoft Azure, but the analysts' estimate for the same period is $ 4.3 billion.
According to The Information Larry Page, one of Google's co-founders, he did not accept that the company had a distant third place in this market, but both Pichai and CFO Ruth Porat defended the validity of the business. With Page now retired from that endeavor following the recent announcement of the change in hierarchy at Alphabet, Pichai's intention may prevail, and Google Cloud is indeed a long-term gamble and not a conditional on reaching first or second place in the market before that the year 2023 ends.
For years, Google has been criticized for launching products and services that it later abandons when it sees that they do not work as expected or are not profitable. Exiting the cloud market could affect some of its recent proposals - for example, Stadia, which already raised doubts at its launch - but Google denies that the revealed data is correct.
A Google spokesperson has indicated on CNBC that The Information article "was not accurate", and certainly many things can change between now and the end of 2023, when the company is supposed to make that decision.
