Google posts $5.6bn loss on cloud unit
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.”
Report: Financial institutions face cloud-based threats
Over one year into the pandemic, different financial institutions report costly consequences to falling short of protecting their data storage from cloud-based attacks and network disruptions. The report is based on more than 800 responses from IT professionals working in the financial services industry in North America, Latin America, Europe, and the Asia-Pacific region.
- Data breaches are an increasingly significant cost burden for the industry: Worldwide, financial firms that experienced a data breach reported estimated average losses of roughly $4.2 million per attack, with U.S. organisations hit hardest at $4.7 million in estimated losses.
- Network outages also result in costly burdens: Institutions lose an estimated $3.2 million on average with Asia-Pacific followed by European institutions carrying the heaviest losses at $4.3 million and $3.1 million respectively.
- The industry remains a popular target for cloud-based attacks: Over half of all organisations (54%) surveyed suffered a data breach in the last 12 months with 49% plagued by a cloud malware attack as well.
- Cloud and network-based attacks will continue to be a major threat vector: More than 50% of respondents expect to face a combination of IoT attacks, cloud vulnerabilities including misconfigurations, and data manipulation attempts over the next 12 months.
- Threat resolution teams are embracing network visibility for security hygiene: Globally, network monitoring (76%), threat intelligence (64%), and threat hunting (57%) are considered the most effective mitigation tactics against these threats.
Even before the pandemic, tech companies were increasingly seeking moves to the cloud. The COVID-19 crisis has accelerated the adoption of cloud computing by the financial sector as part of its process of digitalisation. As companies transition and move data, there can be a lack of protection due to a number of factors such as undertrained staff and insufficient firewalls.
“The financial services sector has long been a target for bad actors who are following the cyber money trail into the cloud,” said Anthony James, VP of Product Marketing at Infoblox. “As the pandemic pushed IT infrastructures to rely on remote work, cloud-based technologies that enabled digital transformation also created soft spots for cyber criminals to exploit.”
“This report shows us that cloud compromise has become the biggest cybersecurity issue for financial institutions and the investments they are making to protect themselves,” James continued.