While management is unlikely to break out specific Google Cloud metrics, we expect any commentary on Cloud to suggest robust demand.
The size and enthusiasm around the Google Cloud Next conference (alongside a multitude of new product feature announcements) speaks to the ramping traction of the segment, and the disclosure of Snapchat as a 5-year $2bn customer adds further credibility to the Google Cloud Platform as a viable provider in the segment. Key points of differentiation for Google Cloud include speed of the GCP fiber network, AI capabilities, and collaborative tools with G Suite. We assume $1bn+ Cloud growth in 2017 to $3.1bn (limited profit contributions), and think the segment can achieve $10bn+ by the end of the decade.
Customer testimonials were impressive, with representatives from Disney, SAP, Colgate Palmolive, Verizon, Home Depot, HSBC, and eBay. SAP announced general availability of its GCP certified SAP HANA in-memory data and analytics platform, as well as HANA Express (developer edition). SAP also indicated plans to run SAP Cloud Platform on GCP.
Verizon announced plans to migrate 150k+ workers to G Suite beginning in a few weeks. Home Depot highlighted strong GCP performance during Black Friday spike demand, and HSBC is leveraging GCP for its data analytics capabilities. eBay had an impressive
presentation focused on ease of migration to GCP (5 month process) capped with a cold demo of Google Home integration with eBay via GCP.
