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Alphabet, the parent company of Google, has reported total revenues of $27.8bn for the third quarter of 2017, up 24% year-over-year.
While advertising remains the bulk of the business, in a transcript of the earnings call posted on the Seeking Alpha financial blogging site, Google CEO Sundar Pichai said the cloud business was growing strongly.
“We already hear from customers that we have outstanding technology. So the reason we win deals in many cases is because we have superior technology and people also see the room ahead, thanks to a lead in machine learning,” he said.
As an example, he said Google’s open-source software, TensorFlow, can be used by developers to build machine learning to solve problems in industrial processes. “Researchers recently use TensorFlow to make smartphones able to identify disease in cassava plants, a major food source in the developing world,” he added.
But he admitted the company needed to improve its ability to scale its go-to-market strategy for the Google Cloud Platform (GCP) and be in more places, which he said would enable it to acquire more customers.
Along with the global sales team headed by Diane Greene, Pichai said a key part of the company’s scale-out strategy is strategic partnerships. “We are striking a lot of important partnerships with leading technology vendors to scale and reach more customers,” he added, with one such partnership being the recently announced deal with Cisco to bridge the on-premise IT world with GCP.
“We also teamed up with Pivotal and VMware. Earlier the year, you saw us partner with SAP. All of this helps customers more easily run their apps, both on-premise and in the cloud – and we are doing this all in an open way with Kubernetes,” he said.
“That’s the overall strategy, and it is really beginning to pay off. You will see us scale across all these dimensions for cloud in the year ahead.”
The company also appears to be on a path to provide more e-commerce services, beyond advertising, to retailers, according to a question on the earning call from BMO Capital Markets.
When asked about the company’s e-commerce roadmap to provide more services to online retailers, Pichai said: “As a vertical, we see huge opportunities. There’s a lot of flywheel effects. Almost all e-commerce providers are really interested in cloud for obvious reasons.
“So, we see tremendous traction. We can talk to them about cloud, and they’re already advertising partners. They’re beginning to work with us much more closely on driving a seamless shopping experience, and we’re working on payments.”
He said e-commerce represents an opportunity that Alphabet can address globally. “We are treating it more thoughtfully and investing in addressing the vertical opportunity we see in front of us,” he added.
One example is the recent integration of Google Home with US retailers Walmart and Target. “Walmart and Target have recently integrated with Google Home, which means you can order everyday items from them much more easily,” said Pichai.