Google has shared its cloud revenue exactly once over the last several years. Silence tends to lead to speculation to fill the information vacuum. Luckily there are some analyst firms who try to fill the void, and it looks like Google’s cloud business is actually trending in the right direction, even if they aren’t willing to tell us an exact number.
When Google last reported its cloud revenue, last year about this time, they indicated they had earned $1 billion in revenue for the quarter, which included Google Cloud Platform and G Suite combined. Diane Greene, who was head of Google Cloud at the time, called it an “elite business.” but in reality it was pretty small potatoes compared to Microsoft’s and Amazon’s cloud numbers, which were pulling in $4-$5 billion a quarter between them at the time. Google was looking at a $4 billion run rate for the entire year.
Google apparently didn’t like the reaction it got from that disclosure so it stopped talking about cloud revenue. Yesterday when Google’s parent company, Alphabet, issued its quarterly earnings report, to nobody’s surprise, it failed to report cloud revenue yet again, at least not directly.
Google CEO Sundar Pichai gave some hints, but never revealed an exact number. Instead he talked in vague terms calling Google Cloud “a fast-growing multibillion-dollar business.” The only time he came close to talking about actual revenue was when he said, “Last year, we more than doubled both the number of Google Cloud Platform deals over $1 million as well as the number of multiyear contracts signed. We also ended the year with another milestone, passing 5 million paying customers for our cloud collaboration and productivity solution, G Suite.”
OK, it’s not an actual dollar figure, but it’s a sense that the company is actually moving the needle in the cloud business. A bit later in the call, CFO Ruth Porat threw in this cloud revenue nugget. “We are also seeing a really 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.” She is not updating further. Got it.
That brings us to a company that guessed for us, Canalys. While the firm didn’t share its methodology, it did come up with a figure of $2.2 billion for the quarter. Given that the company is closing larger deals and was at a billion last year, this figure feels like it’s probably in the right ballpark, but of course it’s not from the horse’s mouth, so we can’t know for certain. It’s worth noting that Canalys told TechCrunch that this is for GCP revenue only, and does not include G Suite, so that would suggest that it could be gaining some momentum.
Frankly, I’m a little baffled why Alphabet’s shareholders actually let the company get away with this complete lack of transparency. It seems like people would want to know exactly what they are making on that crucial part of the business, wouldn’t you? As a cloud market watcher, I know I would, and if the company is truly beginning to pick up steam, as Canalys data suggests, the lack of openness is even more surprising. Maybe next quarter.