In order to compete with Amazon and Microsoft in the cloud computing market, Google has been investing heavily. Those significant investments are now paying off. In the three years that it has been disclosing operating figures for the division, Alphabet announced Tuesday that cloud division of Google posts is now profitable for the first time.
$706 Million Loss
According to Alphabet’s earnings report, the sector achieved $191 million in operating income on $7.45 billion in revenue in the first quarter. The division posted a $706 million loss on $5.82 billion in revenue during the same quarter last year.
The Google Cloud Platform is a part of the cloud industry that leases out cloud infrastructure and services that businesses may use to create and run their own apps as subscriptions to the productivity program Google Workspace. The company now contributes 10% of Alphabet’s overall revenue collectively. Customers of the cloud division of Google posts include UPS, Major League Baseball, PayPal, and Deutsche Bank.
The cloud division of Google posts its first-ever profit
Leader in Cloud Infrastructure
As large businesses and governmental organizations switch from conventional data centers to the cloud division of Google posts and rely more on compute-intensive applications utilizing artificial intelligence, Google has been competing to earn their business. The market’s pioneer and current leader in cloud infrastructure, Amazon Web Services, has been profitable every quarter since 2014. The second-largest player in the market, Microsoft, doesn’t provide Azure unit profitability data.