The 10 Biggest Google Cloud News Stories Of 2024 (So Far): AI, Failed Acquisitions And Historic Sales Growth
The top ten biggest Google Cloud news stories of 2024 include capturing a new cloud market share record, failure to acquire Wiz or HubSpot, cutting partner Workspace renewal margins and launching more AI innovation than ever before.
From record profitability and rapid AI innovation to antitrust lawsuits and failed blockbuster acquisitions, Google Cloud has consistently made news headlines throughout 2024 thus far.
The $41 billion Mountain View, Calif.-based cloud and AI giant is hitting its stride this year by winning more cloud market share than ever before, generating record profit and completely revamping its entire AI portfolio via Gemini.
Google’s cloud business also faced some criticism in 2024 with Google partners around Workspace margin cuts, while also shaking the cloud industry by eliminating egress fees.
CRN breaks down the top 10 most important Google Cloud news story of 2024 so far that every investor, partner and customer should know about.
[Related: AWS Vs. Microsoft Vs. Google Cloud Earning s Q2 2024 Face-Off]
No. 10: Layoffs Hit Google, But Nothing Big At Google Cloud
In May, Google unveiled it would be laying off hundreds of employees, including many of its ‘Core’ team roles. At least 200 employees were laid off from its Core unit that is tasked with building the IT foundation behind the company’s flagship product lines as well as technical teams like developers, engineers and technical infrastructure experts.
In January, Google laid off over 1,000 employees across various business groups—from its Devices and Services teams to Google Assistant—with the majority of layoffs mostly affecting Google’s Large Customer Sales group that sells advertisements to enterprise customers.
Additionally, CRN covered a few smaller layoff rounds at Google throughout the year so far including 50 Google positions eliminated in engineering.
The Takeaway: Google Cloud parent company Alphabet has about 180,000 employees as of July. Google does not provide Google Cloud global headcount figures other than confirming the cloud company has tens-of-thousands of employees globally. It appears Google Cloud has not conducted any large layoff round in 2024 that would significantly affect its cloud business.
No. 9: Google Cloud Profits Hit All-Time High, Quarterly Sales Reach $10 Billion
Google Cloud reached several milestones so far this year in terms of revenue, market share and profitability.
The company generated a record $10.3 billion in total sales for Q2 2024, representing an increase of 29 percent year over year. Google Cloud now has an annual run rate of over $41 billion.
In the second quarter, Google Cloud generated a record operating income of $1.2 billion during the quarter, up from $395 million year over year.
“Google Cloud reached some major milestones,” Pichai said bullishly during Google’s Q2 earnings call on in July. “Quarterly revenues crossed the $10 billion mark for the first time, at the same time pass the $1 billion mark in quarterly operating profit.”
In terms of global cloud services market share, Google Cloud captured 12 percent share of the market in Q2 2024—marking the company’s highest share number in its history. Google Cloud has typically captured between 10 percent to 11 percent share of the global cloud market over the past few years.
The Takeaway: Google Cloud is having a historic year in 2024 around increasing total sales, profitability and global cloud market share.
Click through to read the eight other biggest stories from Google Cloud in 2024.
No. 8: Antitrust Allegations Are Catching Up To Google
This week, Google was found by a federal judge to have violated U.S. antitrust law around its search and general text advertising businesses.
In his ruling, U.S. District Court Judge Amit P. Mehta said that the company violated antitrust laws through its exclusive distribution agreements.
“After having carefully considered and weighed the witness testimony and evidence, the court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly. It has violated Section 2 of the Sherman Act,” Mehta wrote.
Google said it plans to appeal the ruling. “As this process continues, we will remain focused on making products that people find helpful and easy to use,” said Google spokesman Kent Walker in a statement.
It was just the latest news for Google, which has been contending with a web of antitrust-related probes.
This year, federal regulators in the U.S. and Europe began several investigations on whether technology giants are creating unfair competition in various markets.
Just last week, the U.K.’s Competition and Markets Authority launched an investigation into Google’s investment with AI startup Anthropic to see if the partnership is affecting competition by creating a monopoly.
This year, the U.S. Federal Trade Commission required Microsoft, OpenAI, Amazon, Google and Anthropic to provide information on their recent AI investments and partnerships. For Google, the commission is reviewing Google’s investment in Anthropic to see if the deal impacts the competitive landscape.
In March, the European Commission opened an investigation into how tech giant’s—including Google, Meta and Apple—are complying with new antitrust regulations aimed at reining in powerful IT companies. If found guilty, the EU could fine Google up to 10 percent of its annual global revenue, which would means billions for Google.
The Takeaway: With AI making waves throughout the world, federal regulators are looking at leading cloud providers like Google with extra scrutiny in 2024. It will be very interesting to see if Google, as well as Amazon and Microsoft, actually get any type of fine or punishment relating to these federal investigations.
No. 7: Google Cloud Offers 10X Incentives For Partners Driving GenAI
Generative AI is top of mind for Google Cloud and its partners in 2024. So much so that the company increased its incentives and other channel programs by upwards of 10X for system integrators and software vendors to implement Google’s GenAI solutions.
“We are committed to supporting our partners at every level of our AI stack, with a partner-led approach to services and delivery; growing incentives and rewards; new opportunities for training and differentiation; and optimized routes-to-market to help partners close larger deals faster, and more often,” said Kevin Ichhpurani (pictured), Google’s corporate vice president of Global Ecosystem and Channels, this year.
Google Cloud also doubled rewards for services partners who drive more workload adoption and accelerate adoption of key products. Additionally, Google this year grew its new logo incentives for sales and services partners across both Google Workspace and Google Cloud.
Also on the channel front in 2024, Google launched a new Generative AI Services Specialization, along with new generative AI Delivery Excellence and Technical Bootcamps for partners.
The Takeaway: Google Cloud is trying to win the AI war by using channel partners as the tip-of-the-spear in its go-to-market efforts. This bodes well for Google’s AI future.
No. 6: Google Launches Startup Cloud Credit Program To Push Startups Join GCP
Google, Microsoft and AWS are all fighting for mindshare of the IT startup community with the hopes of getting the next big tech companies onto their cloud. It appears that cloud credits are a major factor in winning over startups as all three cloud giants unleashed new cloud credit programs, mostly targeting AI startups, in 2024.
Google Cloud recently launched a Google for Startups Cloud Program that offers $200,000 in cloud credits over two years.
Specifically for AI startups, the program is offering up to $350,000 in credits to provide startups with Google AI products, foundation models and infrastructure.
Google is providing dedicated AI training, dedicated technical resources, product discounts, go-to-market support, and hundreds of thousands of dollars’ worth in cloud credits to startups who join the program.
Cloud credits let customers easily obtain products and services upfront by offsetting costs for critical IT like compute, storage, AI and more.
The Takeaway: Google Cloud, like its rivals, are striving to get startups on GCP and use its AI solutions via cloud credits.
No. 5: Huge Investments In AI Hardware, TPUs And Data Center Infrastructure
Being a leader in the red-hot AI market means you need to have hardware to enable AI solutions.
Google has invested billions around building new data centers and cloud infrastructure across the globe in 2024, as well as on AI-specific chips.
In fact, last year, Google was the third largest provider of data center processors by revenue, ahead of AMD. The surge is due to Google’s popular Tensor Processing Units (TPU) and the launch of its Arm-based Axion CPUs for cloud customers.
“Our TPUs are a key bet,” said Google CEO Sundar Pichai this year. “Trillium is the sixth generation of our custom AI accelerator, and it’s our best performing and most energy efficient TPU to-date. … And the latest Nvidia Blackwell platform will be coming to Google Cloud in early 2025.”
Data centers are needed to power Google’s products and services for customers. This year, Google unveiled plans to build a $1 billion data center campus in Kansas City, a $576 million data center in Cedar Rapids, Lowa; as well as a $1.1 billion investment to expand its Finland data center campus.
Google has unveiled future data center expansion or building plans in Mexico, Malaysia, Thailand, New Zealand, Greece, Norway, Austria and Sweden.
The Takeaway: Google Cloud is making moves this year to become a more dominant hardware provider in the AI era.
No. 4: Google Eliminates Egress Fees For Departing Customers; AWS And Microsoft Follow
In a move that made waves throughout the cloud computing industry this year, Google Cloud eliminated exit fees for customers leaving its cloud platform.
Effective in January, Google Cloud no longer charges customers’ egress fees for moving data from its infrastructure to another cloud provider or migrating workloads to on-premises data centers. The change applied to customers transferring entire workloads to a competitors platforms, not for customers making routine data transfers while still retaining Google services.
The company cut transfer fees for customers deployments in data-related services including Google’s Bigquery, Cloud Storage, Datastore, Cloud SQL and more.
“When customers’ business needs evolve, the cloud should be flexible enough to accommodate those changes,” said Amit Zavery, general manager, vice president and head of platform, during the announcement.
Months later, both Microsoft and AWS announced a similar move to remove egress fees when migrating data to another cloud provider or on-premises.
The Takeaway: Google Cloud sparked a major change in the cloud world this year by removing fees, showing the company’s ability to be a leader in certain cloud areas.
No. 3: Massive Wiz And HubSpot Acquisitions Dissolve
Google was reportedly set to make two massive acquisitions this year for CRM giant HubSpot and red-hot cybersecurity AI startup Wiz.
In April, Google was reportedly looking to spend billions on acquiring HubSpot in a move to significantly boost its CRM technology and customer base. HubSpot generated over $2 billion in revenue last year with a current market cap of over $24 billion. However, the deal ultimately fell apart.
In July, reports emerged of Google looking to beef up its cloud and AI security offerings by acquiring Wiz for approximately $23 billion. Founded in 2020, New York-based startup Wiz is one of the hottest players in cybersecurity with annual recurring revenue recently surpassing $350 million. However, this deal also dissolved as Wiz said it ultimately wanted to remain independent.
As of April, Google has more than $24 billion in cash and cash equivalents. This means Google has cash on hand to fund a massive acquisition in 2024.
The Takeaway: With Wiz and HubSpot slipping through the cracks, it will be interesting to see who Google will look at next to potentially acquire.
No. 2: Google Workspace Renewal Margin Cut By 40 Percent; New 60 Percent Incentive In Its Place
In a blow to many smaller Google Cloud partners, Google cut Workspace renewal margins by 40 percent this year.
Effective April 1, the changes set channel margins for Google Workspace renewals at 12 percent, down from 20 percent previously.
Several partners CRN spoke with at the time said the move would cut Workspace profits dramatically for partners. Additionally, partners were upset Google only gave a one-month notice on the renewal license change.
Google is shifting away from up-front discounting toward more consumption-based incentives. The company this year is encouraging partners to win new business and grow their customer base instead of relying on re-signing Workspace renewals contracts every year.
Google executives brushed off the Workspace renewal cut impact on partners, and instead, turned its channel incentives dollars toward wining new net customers.
Google partners who win new Workspace business can now receive 60 percent margin for the first year.
“For year one, we are giving 60 percent margin to partners for new Workspace business—that’s more than Google makes. So the majority of it is going to the partner,” said Google Cloud’s global partner leader Ichhpurani. “I don’t think you could point to another large technology company that’s ever done something like this: 60 percent margin. And that’s not ‘up to’ 60 percent, but actually 60 percent.”
The Takeaway: Google made a dramatic statement to partners this year letting them know that Workspace renewals aren’t nearly as important as capturing new business. With Workspace being a critical piece to Google’s AI strategy, winning more AI customer mindshare is top of mind.
No. 1: Google Completely Revamps AI Portfolio; Launches More Gemini Innovation Than Ever Before
It cannot be overstated that nearly every product launch by Google Cloud in 2024 revolved around AI or GenAI—from new security solutions and AI Agents to injecting Gemini throughout Workspace and enabling more third-party large language models (LLMs).
“Google Cloud is the only major cloud provider offering both first-party and extensible, partner-enabled solutions at every layer of the AI stack,” said Google Cloud CEO Thomas Kurian at Google Cloud Next 2024 in April.
Here is a breakdown of just ten of the biggest AI highlights and product launches in 2024 thus far:
-Google launched Gemini Ultra, the company’s largest and most powerful LLMs to date.
-Gemini Code Assist for Google Cloud, which is an enterprise-focused AI code-assistance solution that lets uses leverage Google’s latest Gemini models.
-Google Cloud’s new Vertex AI Agent Builder brings together foundation models, Google Search and other developer tools to make it easy for customers to build and deploy agents.
-Google Gemini AI was injected into Google Workspace to create a new AI-powered video creation app: Google Vids, an all-in-one video, writing, production and editing assistant.
-Three popular Google products received a Gemini boost: BigQuery, Looker and Databases. Gemini in BigQuery uses AI to help data teams with data preparation, discovery, analysis and governance. Gemini in Looker provides users with new ways to engage and chat with their business data. Gemini in Databases delivers AI-powered assistance that aims to simplify all aspects of the database journey.
-Google’s AI chatbot Bard and AI-powered collaborator Duet AI were wrapped up and rebranded under Google’s Gemini umbrella.
-Google’s new Gemini Cloud Assist helps cloud teams design, operate, and optimize their application lifecycle.
-Google unveils Gemini 1.5 Pro edition offering two sizes of context windows: 128K tokens and 1 million tokens.
-A new Google Threat Intelligence security offering with GenAI-powered capabilities for protection against threats which uses natural language to deliver deep insights about threat actor behavior.
-Gemini in Security Operations is a new assisted investigation feature that converts natural language to detections, summarizes event data, recommends actions to take, and navigates users through the platform via conversational chat.
Google said there are now more than 2 million developers using Gemini across Google’s developer tools.
“Gemini now comes in four sizes, with each model designed for its own set of use cases. It’s a versatile model family that runs efficiently on everything—from data centers to devices,” Google CEO Pichai said.
“Year-to-date, our AI infrastructure and generative AI solutions for Cloud customers have already generated billions in revenues and are being used by more than 2 million developers,” Pichai said. “We are uniquely well-positioned for the AI opportunity ahead.”
The Takeaway: The biggest news story from Google Cloud in 2024 has been the company’s ability to rapidly build a massive AI portfolio—spanning from hardware and software to LLMs and injecting Gemini into Workspace and GCP.