Google Cloud CEO Thomas Kurian speaks at the Google Cloud Next event in San Francisco, April 9, 2019.
Michael Short | Bloomberg | Getty Images
Google is trying to make cloud computing more affordable with a custom-built Arm-based server chip. At its Cloud Next conference in Las Vegas on Monday, the company said the new processor will become available later in 2024.
With the new Arm-based chip, Google is playing catch-up with rivals such as Amazon and Microsoft, which have been employing a similar strategy for years. The tech giants compete fiercely in the growing market for cloud infrastructure, where organizations rent out resources in faraway data centers and pay based on usage.
Google parent Alphabet still derives three-quarters of revenue from advertising, but cloud is growing faster and now represents almost 11% of company revenue. The segment, which contains corporate productivity applications, is also profitable. Google held 7.5% of the cloud infrastructure market in 2022, while Amazon and Microsoft together controlled around 62%, according to Gartner estimates.
Market leader Amazon Web Services introduced its Graviton Arm chip in 2018. “Almost all their services are already ported and optimized on the Arm ecosystem,” Chirag Dekate, an analyst at technology industry researcher Gartner, told CNBC in an interview. Graviton has picked up business from Datadog, Elastic, Snowflake and Sprinklr, among others.
Alibaba announced Arm processors in 2021, and Microsoft did the same in November.
Arm isn’t completely new to Google, which started selling access to virtual machines, or VMs, that use Oracle-backed startup Ampere’s Arm-based chips earlier this year.
Porting applications to Arm machines has made sense for organizations seeking to reduce spending on cloud computing because of economic worries. When Arm Holdings filed to go public last year, it pointed to Amazon’s claim that Graviton could give up to 40% better price performance than comparable server instances,…
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