Google Cloud Platform will remain a big service of mystery after executives declined to outline an annual revenue run rate even as they talked up key wins.
A year ago, Google CEO Sundar Pichai said Google Cloud delivered $1 billion in revenue a quarter evenly split between G Suite and Google Cloud Platform. In a nutshell, Google Cloud Platform entered 2018 with a run rate of $4 billion. Four quarters later, Google has yet to outline an updated run rate.
Google isn't exactly alone in the cloud market's disclosure retreat. Google tucks its cloud sales in the "other" category that includes cloud, hardware and Google Play. Microsoft doesn't break out Azure sales, but includes it in a kitchen-sink commercial cloud category. Oracle used to break out infrastructure-, platform- and software-as-a-service and took away the visibility. IBM has as-a-service revenue, but it's unclear what's SaaS vs. IaaS.
Pichai went through a laundry list of cloud gains. To wit:
- The number of Google Cloud Platform (GCP) deals worth more than $1 million doubled.
- The number of multiyear contracts also doubled. "We're getting large wins, and I look forward to executing here," said Pichai.
- G Suite has 5 million paying customers.
- There's an uptick in the number of deals worth more than $100 million.
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But that run rate figure remains elusive. CFO Ruth Porat said:
GCP does remain one of the fastest-growing businesses across Alphabet. As Sundar said, we've doubled the number of GCP contracts greater than $1 million. We're also seeing early nice uptick in the number of deals that are greater than $100 million, and really pleased with the success and penetration there. At this point, not updating further.
Oppenheimer analysts Jason Helfstein bemoaned the lack of updates or useful commentary on the Google earnings conference call. He said:
Management did not provide material updates to GCP, YouTube or devices. Most useful commentary related to expected 2019 slowdown in hiring and capex.
While Google ramps up investing in product, engineering and sales for GCP, Wall Street will want to know what the revenue really looks like.
If you attributed 50 percent growth to GCP in 2018, you'd get to a run rate of about $6 billion. For comparison, Amazon Web Services had 2018 revenue of $25.65 billion with a run rate approaching $30 billion. Macquarie puts Microsoft Azure at a run rate of $11 billion. Alibaba has a cloud run rate approaching $4 billion.
GCP isn't updating its annual revenue and a cynical observer would say there's a good reason for that: GCP's revenue doesn't stack up to its rivals yet.
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