Alphabet Inc. (NASDAQ:GOOGL) is reportedly on the verge of a big win in the cloud infrastructure services market that is dominated by Amazon.com, Inc. (NASDAQ:AMZN) with Microsoft Corporation (NASDAQ:MSFT) as runner-up.
The customer in question is PayPal Holdings, Inc. (NASDAQ:PYPL) according to a CNBC report. If the deal goes through, it will lend further credibility to Google’s cloud services.
The PayPal Win Matters
Paypal has reportedly handled transactions worth $81.5 billion in 2015, up 23% annually. The company claims to have 188 million active customer accounts across 200 markets. Given its enormous size, we believe that if PayPal moves its entire operations to Google’s cloud, it will significantly add to its cloud revenues and encourage other similar companies to choose Google as well.
Google Boosting Presence in the Cloud
Under Diane Greene who took charge of Google’s cloud and apps units in Nov, 2015, the company has made heavy investments, filled its ranks and acquired smaller cloud companies such as Bepop, Anvato and most recently Orbitera. With 15 data centers already active, Google plans to launch 12 new data centers by 2017.
The company has some big names such as Snapchat, Home Depot (NYSE:HD), Walt Disney and Spotify in its cloud business client list. Per an Aug 1 Synergy Research Group report, Google presently occupies the fourth position in the cloud services space with a 5% market share. Amazon leads the space with 31% market share, followed by Microsoft at 11% and IBM (NYSE:IBM) at 8%.
Look Up to the Clouds
We think it’s time to enjoy the clouds as tech titans embrace them with open arms!
Given its scope and advantages (cost, scaling, convenience, etc.), it’s not surprising that the demand for cloud computing software and applications is increasing. Cloud vendors usually offer the infrastructure or other technology as a service, which further reduces costs for users.
According to Gartner, the public cloud services market is likely to grow from $175 billion in 2015 to $204 billion in 2016, reflecting 16.5% growth.
Currently, Alphabet shares carry a Zacks Rank #3 (Hold).
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