Cloud, Hardware Among Divisions That Outpaced Google’s Soaring HeadcountRead Now

Why AWS Makes Money and Google Cloud Doesn’t

Google’s cloud computing arm is the company’s biggest hope of creating a substantial moneymaker outside of advertising, but it has been struggling to make up meaningful ground against industry pioneer Amazon Web Services. That extends to profitability: Last year, despite generating $19 billion in revenue, the kind of scale that generally brings profits, Google Cloud lost more than $3 billion. And the unit lost more than $17.6 billion over the past four years.

To put those losses in perspective, the above chart shows that AWS generated about $13 billion in profits from mid-2014 to mid-2018, a four-year span in which it was generating around the same amount of revenue that Google Cloud has generated in the past four years.

The data underscore how Google Cloud, despite recent financial improvements, is contending with a host of expenses and business challenges AWS doesn’t have. They also highlight why Google Cloud will have a hard time getting within striking distance of AWS’ profit margins in the future. Several former employees and people who do business with Google Cloud said the issues range from having fewer high-margin services to sell to customers to having higher overhead costs and a more lackadaisical engineering culture. In a positive sign, Google Cloud CEO Thomas Kurian last month told colleagues during an internal all-hands meeting that he expects the cloud unit to be profitable later this year, according to a person who viewed the event.

Get access to exclusive coverage
Read deeply reported stories from the largest newsroom in tech.
Latest Articles
 
Data Point electric vehicles
Electric Vehicle Startups Face Cash Crunch
Chart by Mike Sullivan.
Startup makers of electric vehicles were one of the biggest beneficiaries of the SPAC party of 2020–21—and that fete is now well and truly in the hangover phase. At least a dozen EV startups have gone public since 2020, mostly by merging with a special purpose acquisition company, with grand ambitions to reinvent the way people and freight moved around. Now, at least...
Latest Briefs
 
Zuckerberg Says Social Media Remains His Focus
Former Engineer Accuses SpaceX of Age Discrimination
Amazon CEO Andy Jassy Defends Overbuilding During Pandemic
Stay in the know
Receive a summary of the day's top tech news—distilled into one email.
Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
Art by Clark Miller
The Big Read
‘I’m Licking My Chops. I Know It’s Going Down’: The Pissed-Off Crypto Traders Who Predicted—and Profited From—the FTX Implosion
Ishan Bhaidani had been patient for over a month, waiting for blood in the water. Now was his moment.
Data Point google
Where Google Has Grown
Alphabet has doubled the headcount in its Google Cloud unit since early 2019, according to data obtained by The Information, outstripping Alphabet’s overall hiring growth.
Art by Clark Miller.
Gift Hunting culture
The Information’s Top Tech-Adjacent Gifts for 2022
After the roller-coaster ride of the past month, everyone needs a little retail therapy. So, in honor of Black Friday and the upcoming holiday season, we’ve put together our annual gift guide, asking The Information’s staffers to share their favorite tech and tech-adjacent purchases of the last year.
Charlie Bell. Photo via Microsoft
Exclusive microsoft amazon
A Former Amazonian Hits Bumps in Push to Make Microsoft More Secure
When Microsoft last year recruited Charlie Bell, a top product engineering executive at Amazon Web Services, it was a major coup for the software giant.
From left to right: Mysten's founders, Sam Bankman-Fried, Aptos's founders.
startups crypto
Aptos, Mysten Valuations Look Sky-High With FTX Out of the Picture
Before it spiraled into bankruptcy, FTX spent hundreds of millions of dollars splashing out on investments in crypto startups.
Photo by Getty. Art by Mike Sullivan.
Opinion culture
Employees Aren’t the Only Ones Suffering From Burnout
We’re living in a split-screen world when it comes to burnout and the employee experience. On one side are all the investments CEOs and human resources executives have been making in recent years—and especially since the pandemic began—to support employee well-being and mental health.