Google says cloud business to generate more revenue than ads in 5 years

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Recently Google has been talking up its rapidly expanding cloud business. It has also dropped prices for its Cloud Platform and now one of the executive team says the business may soon outpace the revenue generated by the company’s advert division.

Google cloud business growing

Google senior vice president of technical infrastructure Urs Hölzle spoke at the Structure Conference in San Francisco this week, and said he believes the company’s cloud business will grow because it’s a service business. Hölzle said that in five years, cloud service revenue will exceed that of revenue from advertising services.

The claim that Google’s cloud business will generate that much is a huge statement to make. The company generated $16.7 billion in ads last year, up 13% from the previous year. Hölzle did’t reveal details on what they are planning to push cloud growth, but Hölzle said the company has some future announcements that will prove Google’s commitment to enterprise.

Googles cloud business lags behind Microsoft Azure and Amazon Web Services. This week, the company announced a new cloud tool to help developers design their own ‘compute instances’. The feature is known as Custom Machine Types and the search giant hopes it will attract budget-focused customers as it allows them to avoid spending too much for processing power and memory.

Google is focusing on price to persuade businesses and developers to use its cloud applications, but many people are hoping it will improve its cloud availability – today it’s only available in four regions, though Microsoft and Amazon’s are available in twenty and eleven regions respectively.

SOURCE: 9to5Google.com.

Larry Banks is a keen follower of technology and finance. He has worked for a variety of online publications, writing about a diverse range of topics including mobile networks, patents, and Internet video delivery technologies.