The comparisons between GCP and AWS are sobering. AWS booked $13.5 billion operating income on $45.4 billion revenue and is growing at 30% YoY.
GCP lost $5.6 billion on $13 billion in revenue. It’s growing a bit faster but not much considering the small base. The “we’re losing a ton of money because we’re growing” argument smells like the sort of thing unprofitable startups without a viable business model say. It looks really off when you’re competition is also growing super fast and is very profitable.
GCP doesn't need to beat AWS. It doesn't even need to increase market share, really: the cloud market as a whole is growing rapidly, and more money is more money, regardless of bragging rights. It just needs to get to profitability.
There's also a strategic aspect of clipping the wings of AWS by providing a BATNA in the big deal negotiations. With Amazon significantly cutting into Google's advertising market share, it needs another front to put pressure on its strongest competitor. If Google can prevent $10B in Amazon profits by burning $5B of its own money, that's arguably a win.
AWS launched compute and storage in 2006 and took until 2015 to first be profitable.
Google launched cloud compute in 2013 and arguably didn't take it seriously until the last few years. Growing nearly 50% is a great result, even if they're still a distant 3rd.
>The comparisons between GCP and AWS are sobering. AWS booked $13.5 billion operating income on $45.4 billion revenue and is growing at 30% YoY.
yep, AWS spent 30B and got 45B, Google spent 18B and got 13B, that is 2X+ difference in bang-for-buck. And that is without full effect of Graviton2,3, etc. which provides like 1.5x leap in perf/price and perf/energy. With Google loosing that much money one can wonder whether the bean counters there would even risk investment in their own ARM platform and without it the GCP would lose to AWS completely.
It is pretty rare for a company to successfully move down the stack as the margins are typically lower there. The GCP numbers illustrate the case very well.
GCP lost $5.6 billion on $13 billion in revenue. It’s growing a bit faster but not much considering the small base. The “we’re losing a ton of money because we’re growing” argument smells like the sort of thing unprofitable startups without a viable business model say. It looks really off when you’re competition is also growing super fast and is very profitable.