Please ensure Javascript is enabled for purposes of website accessibility

Alphabet to Aggressively Expand Google Cloud Platform

By Evan Niu, CFA - Mar 22, 2016 at 4:35PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Google wants to take down Amazon in the cloud, and the first step is to expand on the ground.

Image source: Google.

What happened?
Alphabet (GOOG -2.57%) (GOOGL -2.45%) has announced that it is expanding its Google Cloud Platform with two new regions. The U.S. Western region in Oregon and East Asia region in Japan will both become operational later in 2016. Each region will have numerous availability zones in order to offer flexible computing availability to customers, much like its other regions.

Google also has another 10 regions planned that it will be adding to the network over the next two years, representing aggressive expansion as the company scales. With more regions in operation, Google says it can offer lower latency and greater responsiveness at competitive prices.

Does it matter?
The news comes shortly after Google won a big contract from market leader Amazon.com's (AMZN -2.49%) Amazon Web Services division. AWS currently has 12 regions in operation, so it's clear that Google is preparing to mount a real challenge to AWS' dominant position.

Last year, Google selected board member Diane Greene to lead its cloud infrastructure business, and Greene is going for the jugular. At a recent internal sales meeting, Greene put a clear emphasis on enterprise customers, saying the company's salesforce needed to sell harder in order to chip away at AWS, according to Bloomberg.

The first step is a broad geographical expansion.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,179.26 (-2.45%) $-54.77
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,187.45 (-2.57%) $-57.68
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$106.21 (-2.49%) $-2.71

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.