Feb 3, 2021

Google posts $5.6bn loss on cloud unit

Google
Paddy Smith
2 min
Google Cloud
Google loses $5.6bn on cloud business but posts strong revenue suggesting the company is investing heavily in the service...

Google has disclosed operating income for its cloud business unit for the first time, and the search giant lost $5.6 billion in 2020.

It’s a significant chunk of change, but Google also declared $13 billion of revenue, strong growth from $8.9 billion in 2019 and $5.8 billion in 2018.

Investing in growth

The numbers suggest Mountain View is investing heavily in cloud in an attempt to compete with market leaders AWS and Microsoft. Data centre costs alone would be hefty, but Google will also be investing in acquisitions, launching into new territories (it entered four new regions in 2020) and core service updates.

By comparison, AWS posted fourth quarter revenue of $12.74 billion with an operating income of $13.5 billion. Note that Google’s result was for the full year.

Core business success

Search and YouTube continued to deliver premium revenues amounting to $56.9 billion, according to Google’s CFO Ruth Porat. But the cloud division will have been put into investment overdrive as companies scan the market as they accelerate their digital transformation plans.

Google and parent company Alphabet CEO Sundar Pichai said, “On cloud, we can see how early customers are in this shift. We see a large time ahead and definitely the market dynamics and our momentum in the context of the market is the framework in which we are thinking about the scale of investments, and the pace of investments… We are definitely investing ahead to make sure we serve customers globally across all the offerings they are interested in.”

Cloud becoming a larger focus

Brian Klingbeil, chief strategy officer at Ensono, said, “Between Google reporting its cloud business earnings for the first time and AWS' CEO taking over for Jeff Bezos, it's clear that cloud computing is becoming a larger focus for the big tech giants, signalling significant growth that is yet to come in the cloud industry.

“Google has been investing heavily to catch up to AWS and Azure, and the results they released today reflect that. One factor that is contributing to Google Cloud's hypergrowth is its prioritisation of verticalisation, which is a strategy that will set them up for success in 2021. We think they are investing effectively, as we are seeing interest in GCP building within the enterprise client base that we serve, so much so that we have added it to our managed services portfolio in 2021.”

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Jun 18, 2021

GfK and VMware: Innovating together on hybrid cloud

GfK
VMware
3 min
VMware has been walking GfK along its path through digital transformation to the cloud for over a decade.

GfK has been the global leader in data and analytics for more than 85 years, supplying its clients with optimised decision inputs.  

In its capacity as a strategic and technical partner, VMware has been walking GfK along its digital transformation path for over a decade. 

“We are a demanding and singularly dynamic customer, which is why a close partnership with VMware is integral to the success of everyone involved,” said Joerg Hesselink, Global Head of Infrastructure, GfK IT Services.

Four years ago, the Nuremberg-based researcher expanded its on-premises infrastructure by introducing VMware vRealize Automation. In doing so, it laid a solid foundation, resulting in a self-service hybrid-cloud environment.

By expanding on the basis of VMware Cloud on AWS and VMware Cloud Foundation with vRealize Cloud Management, GfK has given itself a secure infrastructure and reliable operations by efficiently operating processes, policies, people and tools in both private and public cloud environments.

One important step for GfK involved migrating from multiple cloud providers to just a single one. The team chose VMware.

“VMware is the market leader for on-premises virtualisation and hybrid-cloud solutions, so it was only logical to tackle the next project for the future together,” says Hesselink.

Migration to the VMware-based environment was integrated into existing hardware simply and smoothly in April 2020. Going forward, GfK’s new hybrid cloud model will establish a harmonised core system complete with VMware Cloud on AWS, VMware Cloud Foundation with vRealize Cloud Management and a volume rising from an initial 500 VMs to a total of 4,000 VMs. 

“We are modernising, protecting and scaling our applications with the world’s leading hybrid cloud solution: VMware Cloud on AWS, following VMware on Google Cloud Platform,” adds Hesselink.

The hybrid cloud-based infrastructure also empowers GfK to respond to new and future projects with astonishing agility: Resources can now be shifted quickly and easily from the private to the public cloud – without modifying the nature of interaction with the environment. 

The gfknewron project is a good example – the company’s latest AI-powered product is based exclusively on public cloud technology. The consistency guaranteed by VMware Cloud on AWS eases the burden on both regular staff and the IT team. Better still, since the teams are already familiar with the VMware environment, the learning curve for upskilling is short.

One very important factor for the GfK was that VMware Cloud on AWS constituted an investment in future-proof technology that will stay relevant.

“The new cloud-based infrastructure comprising VMware Cloud on AWS and VMware Cloud Foundation forges a successful link between on-premises and cloud-based solutions,” says Hesselink. “That in turn enables GfK to efficiently develop its own modern applications and solutions.

“In market research, everything is data-driven. So, we need the best technological basis to efficiently process large volumes of data and consistently distill them into logical insights that genuinely benefit the client. 

“We transform data and information into actionable knowledge that serves as a sustainable driver of business growth. VMware Cloud on AWS is an investment in a platform that helps us be well prepared for whatever the future may hold.”

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