Google finally reveals size of cloud business

Q4 revenue for cloud unit was $2.6bn, but GCP size still under wraps

Google has revealed the size of its cloud business for the first time, reporting sales of $2.6bn (£2bn) in Q4.

Google parent company Alphabet published the figures as part of its earnings report for the quarter ending 31 December.

Sales in the cloud arm - which houses the likes of Google Cloud Platform (GCP) and G-Suite - climbed 53 per cent year on year.

Google did not reveal sales figures for GCP specifically, but growth in the public cloud infrastructure unit was "meaningfully higher than that of cloud overall", according to CEO Sundar Pichai.

Competitor Microsoft last week said that it had seen sales for Azure alone grow 62 per cent, which is likely from a larger base than GCP.

Pichai said that Google is making progress with large enterprise customers with multi-year cloud deals.

"I think the progress I've seen in our customer focus, with our customer success organisation and the contracting framework have all been great progress for us," he said. "Overall, every time, especially in one of these larger deals, they are effectively looking for a technology partner.

"Differentiation is not just what we bring to the table in terms of cloud, where we have differentiated capabilities, but in many cases it's what we bring as Google.

"So if you take an area like healthcare, all the investments we are making in healthcare across Google, and in some cases, Alphabet."

The CEO added that the cloud unit's growth has been driven by a focus on six key verticals, which the vendor has previously spoken of: financial services, healthcare, retail, communications/media, manufacturing, and the public sector.

He said that the cloud unit is on track to have tripled its sales force in three years, as well as adding "a number of senior strategic hires and supplementing it with a channel partnership programme".

The most high-profile appointment has been that of Thomas Kurian, who joined from Oracle to head up the cloud business.

"Under Thomas' leadership, I think we have clearly focused on six industry verticals across 21 markets and doubled down on those efforts, bringing in a lot of new products and compliance certification, so effectively expanding the TAM, which we serve," he explained.

Sales for the wider Alphabet business rose 17.3 per cent year on year, missing analyst targets.

The firm's share price fell more than five per cent in after-hours trading, largely as a result of slowing sales from Google's advertising business.