Digitally transforming enterprises (63%) is the leading factor driving greater public cloud engagement or adoption today.
66% of IT professionals say security is their most significant concern in adopting an enterprise cloud computing strategy.
50% of IT professionals believe artificial intelligence and machine learning are playing a role in cloud computing adoption today, growing to 67% by 2020.
Artificial Intelligence (AI) and Machine Learning will be the leading catalyst driving greater cloud computing adoption by 2020.
83% Of Enterprise Workloads Will Be In The Cloud By 2020. LogicMonitor’s survey is predicting that 41% of enterprise workloads will be run on public cloud platforms (Amazon AWS, Google Cloud Platform, IBM Cloud, Microsoft Azure and others) by 2020. An additional 20% are predicted to be private-cloud-based followed by another 22% running on hybrid cloud platforms by 2020. On-premise workloads are predicted to shrink from 37% today to 27% of all workloads by 2020.
Digitally transforming enterprises (63%) is the leading factor driving greater public cloud engagement or adoption followed by the pursuit of IT agility (62%). LogicMonitor’s survey found that the many challenges enterprises face in digitally transforming their business models are the leading contributing factor to cloud computing adoption. Attaining IT agility (62%), excelling at DevOps (58%), mobility (55%), Artificial Intelligence (AI) and Machine Learning (50%) and the Internet of Things (IoT) adoption (45%) are the top six factors driving cloud adoption today. Artifical Intelligence (AI) and Machine Learning are predicted to be the leading factors driving greater cloud computing adoption by 2020.
66% of IT professionals say security is their greatest concern in adopting an enterprise cloud computing strategy. Cloud platform and service providers will go on a buying spree in 2018 to strengthen and harden their platforms in this area. Verizon (NYSE:VZ) acquiring Niddel this week is just the beginning. Niddel’s Magnet software is a machine learning-based threat-hunting system that will be integrated into Verizon’s enterprise-class cloud services and systems. Additional concerns include attaining governance and compliance goals on cloud-based platforms (60%), overcoming the challenges of having staff that lacks cloud experience (58%), Privacy (57%) and vendor lock-in (47%).
Just 27% of respondents predict that by 2022, 95% of all workloads will run in the cloud. One in five respondents believes it will take ten years to reach that level of workload migration. 13% of respondents don’t see this level of workload shift ever occurring. Based on conversations with CIOs and CEOs in manufacturing and financial services industries there will be a mix of workloads between on-premise and cloud for the foreseeable future. C-level executives evaluate shifting workloads based on each systems’ contribution to new business models, cost, and revenue goals in addition to accelerating time-to-market.
Microsoft Azure and Google Cloud Platform are predicted to gain market share versus Amazon AWS in the next three years, with AWS staying the clear market leader. The study found 42% of respondents are predicting Microsoft Azure will gain more market share by 2020. Google Cloud Platform is predicted to also gain ground according to 35% of the respondent base. AWS is predicted to extend its market dominance with 52% market share by 2020.
Deutsche Bank estimates Google Cloud Platform (GCP) has a $750M revenue run-rate estimate today.
The combined revenues of AWS, Microsoft Azure, and GCP are still less than $15B for a market penetration of just 1%-2% of the Total Available Market (TAM).
During the 2Q16 call, Google called out Cloud as the primary driver of the re-accelerating growth for Licensing and Other revenue, the first time the business has been called out in pole position.
Recent Orbitera and Apigee acquisitions underscore Google’s new focus and aggressiveness to grow GCP. Google has spent $1B+ on Cloud M&A over the past 12 months.
Deutsche Bank predicts GCP is preparing a series of new product announcements in September to strengthen their customer-facing roadmap further.
These and other insights are from Deutsche Bank Markets Research study, Google Getting More Aggressive In The Cloud, (client access) published 8 September 2016 by Ross Sandler Karl Keirstead, Deepak Mathivanan, Aki Aggarwal and Taylor McGinnis. Deutsche Bank found that Google is investing heavier in the cloud, making a financial commitment with over $1B in acquisitions in the past year including the recent Apigee deal. The study is based on interviews Deutsche Bank contacted with channel partners, prospects, partners, and customers. Despite the renewed focus on growth, Deutsche Bank predicts that GCP would continue to trail AWS and Microsoft Azure for the foreseeable future.
Key takeaways of the Deutsche Bank Markets Research survey include the following:
Deutsche Bank defines the Total Available Market (TAM) enterprise IT spend in nine categories that together account for over a $1T TAM. Deutsche Bank defines the Enterprise IT spending market by combining storage, network equipment, infrastructure software, IT outsourcing and support, data management software, BI/analytics, application software and consulting Deutsche Bank sees AWS make significant progress across a wide spectrum of their taxonomy categories.
GCP new product launches are concentrating on machine learning, data analytics and security, including data encryption and identity and access management. Google’s aggressiveness regarding the cloud is most visible from their new service announcements shown in the table below. Recent announcements include SQL Server Images, where customers can now natively spin up Microsoft database instances on GCP, akin to AWS RDS for SQL Server. GCP also announced a second generation version of Cloud SQL, its cloud-hosted alternative to MySQL and AWS Aurora. While all of these announcements provide GCP with greater potential to compete against AWS and Microsoft Azure, Google’s two larger competitors have formidable momentum in enterprises.
Aggressive build-out of global infrastructure locations continues. Google announced during their 4Q15 earnings call they would build 12 new regions in 2016 and 2017. Of the 12 new planned GCP regions, the US Western region in Oregon opened in July 2016, and Google has said that the new Tokyo region will be available later this year, leaving ten more regions to be added in 2017.
Google continues to believe in the importance of machine learning and artificial intelligence. Deutsche Bank interviews with GCP customers confirmed interest in using machine learning and artificial intelligence on the Cloud. Customers also perceive GCP is well ahead of AWS and Azure in this regard.
Google is quickly hiring enterprise sales reps in an attempt to close the sales gap between themselves and AWS & Microsoft Azure. Deutsche Bank found that Google has been “hiring very aggressively” to scale its enterprise sales rep capacity and also retrofitting existing sales reps from elsewhere in Google into GCP.
GCP is gaining share rapidly within the startup community. Deutsche Bank spoke with customers who estimated that 25% startups are using GCP today (with 75% on AWS), while another estimated the ratio to be 20%/80%. While both agreed that a couple of years ago only 10% of startups were using GCP (with 90% using AWS). During the GCP NEXT Asia-Pacific keynote earlier this month Google disclosed that Snapchat “is one of our largest customers,” making up to 2 million queries per second and consuming more Google bandwidth than any other organization except for YouTube.
Recent Orbitera and Apigee acquisitions underscore Google’s new focus and aggressiveness to grow GCP. Last month Google acquired Orbitera, a small cloud commerce platform. Orbitera simplifies the buying and selling of cloud-based software by providing vendors with packaging and provisioning, billing, and marketplace solutions on AWS and Azure. Earlier this month Google acquired Apigee for $625M, which is 5.2x Apigee’s FY17e revenues of $120M. Apigee is expected to grow by 30%-35% in The company focuses on larger enterprises (Walgreens, Nike, Target, AT&T) and despite an ongoing mix shift to the cloud or SaaS model, it still has a legacy on-premise license/maintenance business.
Google is very focused on building relationships with all systems integration (SI) firms but that building out a GCP channel is proving to be challenging. Deutsche Bank believes that Microsoft is also finding it tough to build out it’s Azure channel, in part because many traditional partners and resellers struggle with how they can monetize Azure, given its different price points and the lower services attach rate
Updated 12 November 2026. This post first appeared on 17 November 2010 as a short note on Google App Engine and the Google Labs cloud APIs. It is the most visited page on this site this month. So the text below replaces the original with a Google Cloud technologies overview for 2026 and a look at 2027. The 2010 version is summarized in the first section for anyone who arrived looking for it.
Google Cloud by the numbers in 2026. Quarterly revenue and contracted backlog for the five quarters through Q3 2026, what each piece of the 2010 stack is called today, and the four figures that define the business at the end of 2026. Click any chart to open it full size. Sources linked below, analysis by softwarestrategiesblog.com.
Google Cloud reported $30.7 billion of revenue for the third quarter of 2026, up 103% from $15.2 billion a year earlier. Operating income reached $11.1 billion, a 36.2% margin, compared to $3.6 billion and 23.7% a year earlier. Contracted backlog stood at $561 billion at the end of September, up from $155 billion twelve months before. Alphabet expects to recognize just over 55% of it as revenue within 24 months. The business this post described in 2010 did not disclose revenue at all. In 2026 it is the fastest growing of the three largest clouds and Alphabet’s second largest source of operating income.
This Google Cloud technologies overview covers four things. It starts with what the 2010 stack looked like and what each piece is called today. It then works through the financial record from the first disclosure in 2020 to the Q3 2026 results. The third section compares Google Cloud with AWS and Microsoft Azure using Synergy Research Group’s Q3 2026 market data. After that comes the platform announced at Google Cloud Next in April 2026. The final section sets out what the backlog, capex guidance and competitor commentary already say about 2027.
What the 2010 Google cloud stack became
In November 2010 Google’s cloud effort was a developer evangelism program. The original post pointed readers to the Google Labs catalog and to a slide deck by Google developer advocate Chris Schalk. The deck covered Google Storage for Developers, the Prediction API and BigQuery, all three of them in preview. App Engine, launched in 2008, was the production product at the time. The post contrasted Google’s incremental approach with how often Amazon Web Services changed its platform, pricing and services. Google did not report cloud revenue then, since it had no cloud segment to report.
Almost every element of that stack still exists under a different name. Google Storage for Developers became Cloud Storage. BigQuery left preview in 2011 and now anchors what Google calls the Agentic Data Cloud. The Prediction API was shut down in 2018. Its role passed to Cloud Machine Learning Engine, then to Vertex AI in 2021, and in April 2026 to the Gemini Enterprise Agent Platform. Google Labs closed in 2011, and Google Cloud Next is where new services launch instead. App Engine, in fact, remains available inside Google Cloud. Google itself became a subsidiary of Alphabet in 2015. Alphabet first reported Google Cloud as a segment in February 2020, disclosing $8.9 billion of 2019 revenue. The 2018 figure was $5.8 billion and the 2017 figure $4.1 billion.
Two businesses that did not exist in 2010
The first is security. Google Cloud bought Mandiant in September 2022 for $5.4 billion. It then closed its $32 billion acquisition of Wiz on 11 March 2026, the largest purchase in Alphabet’s history. The second is custom silicon sold to customers rather than used internally. The Tensor Processing Unit did not reach outside developers until 2018. In 2026 Alphabet counts more than 100 significant TPU customers and sells TPU systems for installation in customers’ own data centers.
Google Cloud revenue went from $4 billion a year to $30.7 billion a quarter
Google Cloud segment revenue by year, from Alphabet’s 10-K and 10-Q filings. The segment lost money every year through 2022, earned $1.7 billion in 2023 and $26.5 billion in the first nine months of 2026. Sources linked below, analysis by softwarestrategiesblog.com.
Google Cloud revenue has grown every year since Alphabet began disclosing it. Segment revenue was $13.1 billion in 2020 and $19.2 billion in 2021. It then reached $26.3 billion in 2022, $33.1 billion in 2023 and $43.2 billion in 2024. Alphabet’s 2025 Form 10-K puts 2025 revenue at $58.7 billion. The first nine months of 2026 added $75.5 billion, more than the whole of 2025. At the Q3 2026 rate the segment is on a $123 billion annual run rate. That is roughly fourteen times the $8.9 billion it reported for 2019, before the segment turned a profit.
Profitability arrived later than scale. The segment reported operating losses in every year through 2022. It then earned $1.7 billion in 2023, $6.1 billion in 2024 and $13.9 billion in 2025. The first nine months of 2026 produced $26.5 billion, almost double the full year before, according to Alphabet’s Q3 2026 Form 10-Q. Operating margin moved from 5.2% in 2023 to 14.1% in 2024, 23.7% in 2025 and 36.2% in the latest quarter.
Growth accelerated for five straight quarters
The acceleration is recent and steep. Google Cloud grew 34% in Q3 2025 and 48% in Q4 2025. It grew 63% in Q1 2026, 82% in Q2 2026 and 103% in Q3 2026. Quarterly revenue went from $15.2 billion to $30.7 billion over those five quarters. Alphabet attributes the growth to Google Cloud Platform, and within it to AI infrastructure and enterprise AI solutions. Core GCP products grew as well, though more slowly. Eighteen Google Cloud product lines each generate more than $1 billion a year. About 90% of the Fortune 100 use Gemini Enterprise, according to the Q3 2026 earnings call.
Backlog grew faster than revenue. Remaining performance obligations are the contracted revenue not yet recognized. They went from $155 billion in Q3 2025 to $240 billion in Q4 2025 and $462 billion in Q1 2026. They then reached $514 billion in Q2 2026 and $561 billion in Q3 2026. At the Q2 call Alphabet said just over 50% of backlog would convert to revenue within 24 months. By the Q3 10-Q that figure was just over 55%. So about $309 billion of contracted revenue sits inside the next two years before any new signings.
Google Cloud gains share while AWS loses it
The three largest cloud providers in Q3 2026. AWS remains the largest, Google Cloud grows more than twice as fast as either rival, and Synergy Research has Google Cloud gaining three points of share in a year while AWS loses three. Sources linked below, analysis by softwarestrategiesblog.com.
Synergy Research Group puts worldwide cloud infrastructure services revenue at $167.7 billion for Q3 2026, up 55% from a year earlier. It was the twelfth consecutive quarter in which the growth rate increased. Trailing twelve-month revenue, as a result, reached $558 billion. Within that market Synergy has Amazon at 26% share, down from 29% a year earlier. Microsoft holds 19% against 20%, and Google 16% against 13%. Oracle, Alibaba, SpaceX and xAI, CoreWeave, Salesforce and Anthropic each hold between 2% and 4%.
The company results line up with the shares. AWS reported $46.0 billion of Q3 2026 revenue, up 39%. Its operating income was $17.8 billion, so its run rate is $184 billion at a 38.7% margin. Microsoft disclosed Azure revenue in dollars for the first time at $33.2 billion, up 48%, a $133 billion run rate. Google Cloud’s $30.7 billion, up 103%, sits $2.5 billion behind Azure and $15.3 billion behind AWS for the quarter. A year earlier the gaps were larger on every measure. Google Cloud was growing 34% then, while AWS grew 20% and Azure 40%.
Google Cloud’s margin now sits between its two rivals. AWS earned a 38.7% operating margin in Q3 2026 while Google Cloud earned 36.2%. Microsoft, by comparison, does not disclose Azure operating income. For comparison, Synergy’s Q3 2022 shares were 34% for Amazon, 21% for Microsoft and 11% for Google. Google has gained five points of share in four years while Amazon has lost eight.
The 2026 platform is built around agents and TPUs
Google Cloud Next 2026 ran from 22 to 24 April in Las Vegas. It drew more than 32,000 attendees and produced 260 announcements. The center of them was the Gemini Enterprise Agent Platform, the renamed and extended Vertex AI. It adds Agent Studio for building agents and an Agent Registry for cataloging them. Agent Identity gives each agent its own credentials, Agent Gateway enforces policy on every call, and Agent Observability traces what agents do. The point of the five components is that an enterprise can build, authorize, route and audit agents in one place rather than stitching controls together from separate products.
Infrastructure announcements followed the same theme. TPU 8t is the eighth generation training chip. It scales to 9,600 chips and 2 petabytes of high bandwidth memory in a single superpod. Google rates it at three times the compute of Ironwood, twice the performance per watt and 2.7 times the training performance per dollar. TPU 8i is the inference part, with 1,152 chips per pod and an 80% improvement in inference performance per dollar compared to the prior generation. Google also described Virgo, a custom network for connecting TPU supercomputers into larger clusters. The Agentic Data Cloud rounds it out. Its Cross-Cloud Lakehouse is standardized on Apache Iceberg, so BigQuery can query data where it sits, including data left in AWS.
The money behind the platform is unusually visible. Alphabet spent $51.4 billion on capital expenditure in Q3 2026. It held its 2026 guidance at $195 billion to $205 billion. Total Alphabet revenue reached $127.6 billion in the quarter, up 25%, with $40.6 billion of operating income. The Gemini app also passed one billion monthly users during the quarter.
Security is Google Cloud’s $37 billion acquisition story
Google Cloud entered security by acquisition. Mandiant, bought for $5.4 billion in 2022, brought incident response and threat intelligence. Wiz was announced in March 2025 for $32 billion and closed on 11 March 2026 for $29.5 billion after adjustments. It brought a multicloud security platform that Google has kept as a separate brand since the deal closed. Wiz still works across AWS, Azure and Oracle as well as Google Cloud. The purchase added $22.7 billion of goodwill to the Google Cloud segment. That is what Alphabet paid for the customer base, the engineers and the market position rather than the code.
The combined products now ship under Google AI Threat Defense. It pairs Gemini models with Wiz, Mandiant intelligence and the CodeMender code repair agent. Wiz, for its part, introduced Red, Blue and Green agents for offensive testing, defensive response and remediation. Google’s security blog describes the goal as an agentic security operations center. In it, agents triage alerts, investigate and recommend responses while analysts approve the steps. For readers of this site, that matters for one reason. The controls Google ships for its own agents, Agent Identity and Agent Gateway in particular, are the same controls enterprises need for agents built on any platform.
What 2027 already looks like
Three numbers already shape 2027, starting with the backlog. Just over 55% of $561 billion converts within 24 months, so roughly $309 billion of revenue is contracted before Google Cloud sells anything new. Spread evenly, that alone is about $155 billion a year, above the current $123 billion run rate. The second is capital spending, which is still rising. Alphabet told investors on the Q3 2026 call to expect capex to increase significantly in 2027. The 2026 range is $195 billion to $205 billion, and the Cloud segment carries much of the depreciation. Operating margin rose from 23.7% to 36.2% in a year while that spending ramped. The question for 2027 is whether margin keeps rising as the depreciation catches up.
The third is the competition’s own guidance. Amazon CEO Andy Jassy told analysts he expects AWS to grow more than 40% in 2027 and 2028. To keep gaining share, Google Cloud has to grow faster than that from a base now two thirds the size of AWS. Synergy’s data has the entire market compounding at over 50%. The test of 2027 is whether the three leaders can all grow above 40% at the same time. That has never happened at this scale.
Two other threads run into 2027. TPU systems are now sold into customers’ own data centers, with Oracle and Crux AI named as early buyers. That turns Google’s silicon into a product line rather than an internal advantage. Wiz plus Mandiant gives Google Cloud a security business that competes with CrowdStrike and Palo Alto Networks as much as with AWS. Neither chips for sale nor security acquisitions were part of the plan when App Engine was the product. The 2010 version of this post did not see either one coming.
Key takeaways
Google Cloud doubled in a year. Q3 2026 revenue of $30.7 billion was up 103% from $15.2 billion. Growth also accelerated in each of the last five quarters.
The backlog is the forecast. Contracted backlog reached $561 billion, with just over 55% converting within 24 months. That puts about $309 billion of revenue under contract for the next two years.
Margins moved from 5% to 36% in three years. Operating margin went from 5.2% in 2023 to 36.2% in Q3 2026, on $11.1 billion of quarterly operating income.
Google Cloud is the share gainer. Synergy Research puts it at 16% of a $168 billion quarterly market, up from 13%. AWS, in contrast, fell from 29% to 26%.
The 2010 stack survived under new names. Google Storage is Cloud Storage and BigQuery anchors the Agentic Data Cloud. The Prediction API’s role, in turn, now belongs to the Gemini Enterprise Agent Platform.
Security is a $37 billion acquisition story. Mandiant at $5.4 billion in 2022 and Wiz at $32 billion in 2026 gave Google Cloud a security business that sells across every major cloud.
2027 is a capex and margin test. Alphabet expects capex to rise significantly from the 2026 range of $195 billion to $205 billion. AWS guides to more than 40% growth, so share gains require Google Cloud to grow faster than that.
