Google Cloud Business Model In A Nutshell

In 2019, Alphabet’s (Google) Cloud Business was an almost $9 billion unit within Alphabet’s Google overall business model; to gain a bit of context; organization" itemid="">Microsoft intelligent cloud netted nearly $39 billion and Amazon AWS $35 billion in the same year.

How does Google cloud business model work?

Google Cloud revenues consist primarily of revenues from Google Cloud Platform comprising G Suite productivity tools and other enterprise cloud services provided on either a consumption or subscription basis.

The cloud business unit is extremely important for Google as the whole company was built in the cloud. Now the Cloud includes Google Cloud Platform and G Suite enabling developers to build, test, and deploy applications on Google’s infrastructure.

The G Suite productivity tools comprise apps like Gmail, Docs, Drive, Calendar, and more.

Alphabet is also devoting significant resources to develop and deploy the enterprise-ready cloud services, including Google Cloud Platform and G Suite.

What does Microsoft Intelligent Cloud business model work?

Microsoft has a diversified business model spanning across Office products, Windows, Gaming (Xbox), Search Advertising (Bing), Hardware, LinkedIn, Cloud and more. 

Microsoft’s Intelligent Cloud segment consists of our public, private, and hybrid server products and cloud services that can power modern business.

The segment primarily comprises:

  • Server products and cloud services, including SQL Server, Windows Server, Visual Studio, System Center, and related CALs, GitHub, and Azure.
  • Enterprise Services, including Premier Support Services and Microsoft Consulting Services.

Server Products and Cloud Services

The key value proposition for Microsoft’s server products and cloud services is to make IT professionals, developers, and their systems more productive and efficient.

As Microsoft highlights:

Server software is an integrated server infrastructure and middleware designed to support software applications built on the Windows Server operating system.

This includes the server platform, database, business intelligence, storage, management and operations, virtualization, service-oriented architecture platform, security, and identity software.

Microsoft also acquired GitHub which provides a collaboration platform and code hosting service for developers.

Azure is a comprehensive set of cloud services that offer developers, IT professionals, and enterprises the freedom to build, deploy, and manage applications on any platform or device.

Enterprise Services

Enterprise Services, including Premier Support Services and Microsoft Consulting Services, assist customers in developing, deploying, and managing Microsoft server and desktop solutions and provide training and certification to developers and IT professionals on various Microsoft products.

What does Amazon AWS comprise?

Amazon AWS follows a platform business model, that gains traction by tapping into network effects. Born as an infrastructure built on top of Amazon’s infrastructure, AWS has become a company offering cloud services to thousands of clients from the enterprise level, to startups. And its marketplace enables companies to connect to other service providers to build integrated solutions for their organizations.

AWS arrangements include global sales of computing, storage, database, and other services. The Amazon AWS business model proved incredibly scalable and it’s among the most profitable units for the organization.

Amazon AWS’s story is quite interesting as it shows how by tinkering organizations scaling up might come up with whole new business units that while seemingly disconnected from the main business, in reality, those are the foundation and then become key business units that run their own business model.

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