Google’s cloud business states that its registered an operating loss of $5.61 billion in 2020. It brought in $13.06 billion in revenue for the year.
The company revealed for the first time that the operating income metric for its cloud business. It lost $1.24 billion on revenue of $3.83 billion in Q4 2020.
The data comes at a time world over there is a surge in cloud business, especially Google Cloud competitors like AWS, Microsoft, Oracle and IBM are competing in the market to perform better.
The unit’s losses appear to be growing as the company invests heavily in sales staff. The company said the cloud unit lost $4.65 billion on $8.92 billion in revenue in 2019, and lost $4.35 billion on $5.84 billion in revenue in 2018.
Alphabet’s latest push to show it’s serious about its cloud unit comes as it tries to diversify revenue, which primarily comes from advertising, a business that showed vulnerability in 2020 – particularly in the second quarter. Google Cloud includes infrastructure and data analytics platforms, collaboration tools such as Google Docs and Sheets, and “other services for enterprise customers.”
Wall Street has been seeking additional financial details surrounding the company’s cloud business, which Google has pumped resources to grow while in a distant third place to heavyweights Microsoft and Amazon. Google began breaking out cloud revenue for the first time, one year ago.
The company’s past attempts to bolster its cloud unit under CEO Diane Greene, who left in 2018, failed to capture much market share. But, since former Oracle executive Thomas Kurian came to Google to lead its cloud efforts in 2019, the company has gone on hiring and acquisition sprees.
The Google Cloud network consists of fiber optic links and subsea cables—which will soon include the Grace Hopper subsea cable—between 100+ points of presence, thousands of edge node locations, 100+ Cloud CDN locations, 91 dedicated interconnect locations and 24 GCP regions, with additional regions announced in places like Chile, Spain, Italy France and Poland.
The company is working all to expand its reliability, speed and security performance as compared with the performance of other cloud networks.
