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Google Cloud chief Thomas Kurian. Photo by Bloomberg

Why a $2 Billion Google Cloud Contract Has Generated Only $10 Million in Revenue So Far

Photo: Google Cloud chief Thomas Kurian. Photo by Bloomberg

Sabre Corp. CEO Sean Menke says his company’s decadelong agreement with Google Cloud, announced January 2020, is the key to finally weaning the 61-year-old provider of travel-booking technology off mainframe computers. Judging from how Menke has described Sabre’s work with Google Cloud during recent earnings calls with stock analysts, those plans appear to be on track.

But as of the middle of this year, or about 18 months into the Google Cloud deal, Sabre had spent less than $10 million from its agreement to pay approximately $2 billion over 10 years, according to a person with direct knowledge of the matter. That’s roughly $80 million less than Google Cloud anticipated Sabre would have spent by that point, the person said. One culprit for the shortfall: Internal bureaucracy at Sabre prevented it from moving more computing to the cloud, according to a person who has done business with the company.

Sabre isn’t the only spending straggler at Google Cloud, which generated $13 billion in revenue last year. Salesforce, Mayo Clinic and biotechnology startup Tempus Labs also inked long-term agreements with Google Cloud, each worth between tens of millions of dollars and hundreds of millions of dollars, but they have paid less money for services than Google had projected, said the person who has direct knowledge of the issue.

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