Google is transferring elements of YouTube to its cloud service

Sundar Pichai, Alphabet CEO

David Paul Morris | Bloomberg | Getty Images

Google is moving parts of its popular YouTube video service from the advertising company’s internal data center infrastructure to the company’s cloud service, the head of Google’s cloud said.

The effort suggests that Google is looking inward to build its share of the growing cloud computing market and become less dependent on ads that appear on its web search engine and other websites.

In the past, Google relied on its own systems to run its most frequently used applications on computer servers in its data centers. The Google Cloud Platform offer existed separately, and Google did not bother to migrate its search engine of the same name to the Google Public Cloud, for example.

But the company’s view of the value of using the cloud for its top products like third-party applications has changed.

“Part of the evolution of the cloud is that our own services are using it more and more, and they are,” Thomas Kurian, CEO of Google Cloud, said in an interview with CNBC last month. “Parts of YouTube are moving to Google Cloud.”

The change will bring Google closer to its main competitors in the US, Amazon and Microsoft.

In 2019, Amazon announced that after years of work, its consumer business had phased out its final Oracle database in favor of databases from Amazon Web Services. Microsoft has tried to make its social network LinkedIn and its video game Minecraft more dependent on the company’s own Azure public cloud.

The Google Workspace suite of productivity apps, formerly known as G Suite, the Waze navigation app, and the DeepMind artificial intelligence research group all rely on Google’s cloud infrastructure, Kurian said.

YouTube is different. According to Amazon’s analysis tool Alexa, it is the second largest website on the Internet with more than 2 billion users per month. Google bought the property in 2006 for $ 1.65 billion.

Google’s decision to use public cloud resources for YouTube and other consumer services could make life easier for the company’s sales reps, who are constantly trying to convince large companies to build on the Google Cloud or existing applications on the Google Cloud platform to execute. Sales reps will say that Google Cloud is good enough for the company’s mission-critical workloads.

This could increase Google’s cloud revenue over time. In the first quarter, almost 58% of Google parent Alphabet’s revenue came from the Google Search and Other category, which includes advertisements displayed on Google’s web search engine, Gmail, Google Maps, and other online destinations it operates. Google’s cloud business, which includes the public cloud and Google Workspace, generated 7% of sales but grew faster.

The cloud entity has been squeezing Alphabet’s operating margin with billions of dollars in annual losses for at least three years, but the largest cloud infrastructure provider by revenue, Amazon Web Services, has become a major source of profit.

In 2019, Google held 5% of the cloud infrastructure market, Amazon 45% and Microsoft around 18%, according to market research company Gartner for the technology industry. Gartner has not released any recent figures.

CLOCK: Thomas Kurian from Google Cloud on the future of the cloud and Google

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