Google CEO: The Google Cloud Platform Is 'A Billion-Dollar Per Quarter Business'
Google CEO Sundar Pichai said that demand for cloud services had reached a fever pitch, telling investors that Google Cloud is officially a billion-dollar per quarter business and that the company believes the platform is the fastest-growing public cloud provider in the world.
"Google Cloud Platform and G-Suite have reached meaningful scale … The number of [customer] deals worth over a million dollars across all cloud products have more than tripled from 2016 to 2017," Pichai said during parent company Alphabet's fourth-quarter earnings call on Thursday. "The strength of our products and the value of working with Google is increasingly clear to partners and customers."
Pichai also revealed that there are currently more than four million paying customers on G-Suite, Google's portfolio of cloud applications that includes Gmail, Drive, Docs and Calendar that is available through channel partners.
[Related: The 10 Biggest Google Stories Of 2017]
While the company doesn't break out financials for Google Cloud, the "other revenues" category, which includes cloud, Google Play, and hardware, rose to $4.69 billion in the fourth quarter from $3.40 billion during Q4 2016.
Ruth Porat, CFO of Alphabet Inc. and Google LLC, attributed the approximate 30 percent growth in this segment to the strong cloud and Play sales during the earnings call on Thursday evening.
Porat said that in the cloud segment, Google sees the benefits of a "fully-featured enterprise offering." During the question-and-answer portion of the call, Pichai added that Google's 19-year legacy as a company built on a cloud platform, as well as its continuous investments in the platform, have helped build a business-friendly cloud offering.
"Now we can handle any type of enterprise – any kind of regulated [company]," he said. "We are signing customers that are very large and strategic, and that’s driving a lot of momentum."
Pichai said that Google plans on hiring "thousands" of more U.S.-based employees to support its offices and data centers across 21 states. The company will also be making significant investments in offices across nine states, including Colorado and Michigan, and is slated to open five new data centers.
Alphabet closed out the year on a high note with strong revenues that were driven by the company's prospering internet advertising business, as well as its burgeoning enterprise business, hardware sales, and app store.
Alphabet reported revenue for its fourth fiscal quarter of 2017, which ended December 31, of $32.32 billion, up about 24 percent from the $26.06 billion the company reported for the same year-ago quarter. The U.S. market counted for $11.8 billion of the total revenue, with that revenue up 25 percent over last year.
In 2018, Google’s parent company will be invested heavily in self-driving cars, smartphones, and smart home devices, Porat said.
Alphabet reported income of $7.66 billion, or $4.35 per share for the quarter, up from the $6.64 billion, or $7.56 per share during the same period of last year. The company attributed its Q4 2017 earnings per share result to the impact of the Tax Cuts And Jobs Act, which was passed in December. Excluding tax reform, diluted earnings per share for the quarter were $9.70.
Alphabet missed Wall Street's expectations on earnings but beat the revenue expectation of $31.86 billion.
Net income during Q4 2017 fell to $3.02 billion, down from $5.33 billion during Q4 2016. Alphabet also said that the recently passed tax reform resulted in a one-time expense of $9.90 billion during its final quarter.
For the full-year, Alphabet report strong revenues of $110.86 billion, up 23 percent compared to $90.27 billion during 2016. Net Income for 2017 was $12.66 billion, falling from $19.48 billion in 2016.
Alphabet announced that John Hennessy would become the company's new chairman. Hennessy, who has been a board member since 2004, will be taking over for Eric Schmidt, who said he would be stepping down in December.