Google has recently entered attempted to enter a deal with PayPal in an attempt to develop a significant edge in the cloud computing industry.
A deal with PayPal will land Google a significant client with a large customer base that is in need of significant storage space and will lead to both greater economies of scale as well as a significant amount of positive press for their cloud computing business. While the contract is not yet signed it is thought to be in the final stages with Google having a big lead in the competition.
Google is in a competition with both Amazon and Microsoft to be the leader in providing cloud computing storage solutions to businesses. Amazon, in particular, has greatly invested in their cloud computing business known as Amazon Web Services and has developed an extensive reputation catering to both individuals and businesses in need of these storage solutions.
Cloud computing allows customers to store data on a third party server that is remotely backed up and is stored in a safe and remote location. There are obvious reasons why this is useful for businesses looking to protect critical data that is now a significant part of their business model. Protecting this data is essential to businesses and the market for cloud storage solutions has therefore increased to account for this change.
Google has plenty of money to invest in their cloud computing line as they are sitting on about $80 billion in cash as of the end of the second quarter. Their investment in cloud computing is significantly behind Amazon Web Services which earns six times the revenue that Google’s cloud computing business does. Amazon earned close to $3 billion in revenue in the second quarter on cloud computing.
Amazon currently has almost 31% of the market and Microsoft holds 11%. Google is far behind them and IBM with only 5% of the cloud computing industry. Their business has surged by over 100% from the prior year though as they increase their investment and capacity in cloud computing.
Google currently has some other big name customers in their cloud computing business including Disney, Home Depot, and Spotify. Adding PayPal to this list will only build on their reputation and help to attract other large brands looking for new options in cloud computing.