Google Cloud is still losing buckets of money

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By Sead Fadilpašić
published

Alphabet is growing, but Google Cloud is still leaking cash

Google Cloud to open new office in India
(Image credit: Google India)

In a bid to try and cut down on losses from its cloud business, Google decided to extend the life of its hardware by a year, sometimes even two. 

The news was revealed during parent company's Alphabet’s Q4 2021 earnings call where the company said it had reduced depreciation expenses by $2.6 billion.

However, despite squeezing just a little more juice out of their cloud servers and “some networking kit”, the company still racked up quite a lot of losses in its cloud business - seeing an $890 million loss for the fourth quarter of 2021, and $3.1 billion for the entire year of 2021. 

Relative growth

However, instead of hard numbers, the company focused on percentage change. Apparently, revenue growth is up 45% year-on-year, while the company’s backlog revenue grew by more than 70% for the period. In total, that’s $51 billion, most of which, as the publication reminds, is attributable to commitments to spend on Google’s cloud business.

Reporting on the business’ operations for the year, Alphabet CEO Sundar Pichai added that the company’s sales force increased by more than threefold, while revenue contribution from channel partners more than doubled. 

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But Alphabet as a whole, isn’t exactly operating at a loss. The company brought in $257.6 billion in revenue last year, up 41% on 2020. Net income was $76 billion, up almost a third (32%) year-on-year. Last year was the first time Alphabet crossed the $200 billion threshold for revenue, earning more than ten times what it did in 2009, when it earned $24 billion.

“Q4 saw ongoing strong growth in our advertising business, which helped millions of businesses thrive and find new customers, a quarterly sales record for our Pixel phones despite supply constraints, and our Cloud business continuing to grow strongly,” Pichai said in a statement. 

Just in its advertising business, and just for the quarter, the company raked in $61.24 billion. 

Via: The Register

Sead Fadilpašić

Sead is a seasoned freelance journalist based in Sarajevo, Bosnia and Herzegovina. He writes about IT (cloud, IoT, 5G, VPN) and cybersecurity (ransomware, data breaches, laws and regulations). In his career, spanning more than a decade, he’s written for numerous media outlets, including Al Jazeera Balkans. He’s also held several modules on content writing for Represent Communications.