Dive Brief:
- Google Cloud yielded $6.3 billion in revenue during the second quarter of the year, up 35% from the same period in 2021, the company said in its earnings report Tuesday.
- Despite gains, the company's cloud service is not yet profitable. During Q2, Google Cloud ran an operating loss of $858 million, exceeding the $591 million loss in Q2 2021, according to the report.
- Google Cloud saw "continued demand in all geographies," said Alphabet CEO Sundar Pichai. The executive touted work with brands such as Target, H&M and Banco BV.
Dive Insight:
Google's standing in the cloud market is still a work in progress, despite recent revenue and client wins.
In the global IaaS public cloud market, Google Cloud ranked third among U.S.-based cloud providers and fourth globally based on 2021 market share, Gartner data shows. The company commands 7% of total market share, trailing Microsoft, which holds 21%, and frontrunner Amazon with 39%.
Pichai outlined the company's strength in its ability to unify data and analytics in a single platform, opportunities for IT modernization and strong cybersecurity.
"Google has always maintained that they have superior data and analytics engine and capability," said Sid Nag, research VP at Gartner. "So I'm not surprised that Pichai is highlighting that."
Google Cloud has also pushed to earn the standing of a security brand as more enterprise IT attention falls on cloud security integration. Google spent $5.4 billion to acquire Mandiant, which it will fold into Google Cloud. The deal is expected to close later this year.
"In the whole multicloud narrative, the strategy will be to highlight one or two areas where you are superior so that folks can use that capability of yours," Nag said.
In line with broader technology trends, Google Cloud informed customers of price increases on its services in March.
"Historically, they kept their prices a bit lower than the competition — quite a bit lower," said Nag. "And they realized in order to drive revenue and profitability, they needed to become on par with the competition."
