Google Cloud finally makes a profit for the first time, but it is however still nowhere close to as big as its top competitors in the market such as Azure or AWS.
Google Cloud Finally Makes Profit
Following many years of significant investments and huge losses, Google Cloud has finally posted its very first profitable quarter as Sundar Pichai, CEO of Alphabet predicts better times just ahead.
After Alphabet, the company’s parent company saw $7.45 billion in revenue in Q1 2023; it means that the division achieves an operating income of $191 million, or around 2.6%. quite far from aspirational, but it is a huge leap forward in contrast to the previous year which reflected a $706 million loss, or the $14.6 billion in losses in the three previous years leading up to 2021.
That being said, the profit of Google Cloud was just a tenth of that of AWS which is its largest competitor, behind which Microsoft Azure sits pretty in third place.
Google Cloud Is Now In a Position to Grow
The reported billions in revenue have until now been offset by such similar amounts in investments and many other types of spend, but accounting for around 10% of Google’s overall revenue and then playing cloud home to many of the world’s largest companies, such as PayPal and UPS, Google Cloud could now well be in the position to grow profits year-on-year and then take on the giants in the industry.
The revolution of artificial intelligence is also expected to have an unexpected and unknown impact on the finances of Google, with the potential for large revenue as well as an uncertain infrastructure spend just laying out a fluctuating path ahead, possibly.
Google Cloud Still Has a Lot of Work to Do
And even though things are now good, Google Cloud is not really out of the woods yet. In the early parts of this year, the division notified its workers that they would be working in the office on alternate days with a colleague under a new desk-sharing initiative in a bid to help the firm cut on its real estate spend which is a move that was met with backlash from workers.
The Economic Struggles of Google
Google more broadly, has been very far from immune from the economic pressures currently facing big tech firms in recent months, with the company having announced 12,000 redundancies across its various businesses.
MORE RELATED POSTS
