Google cuts cloud marketplace revenue share from 20% to 3%

Thomas Kurian, CEO of Google LLC’s cloud services, listened to Philips Group CEO Alpna Doshi at the Google Cloud Next ’19 event in San Francisco, Calif., On Tuesday, April 9th. It says that it is. 2019. This conference brings together industry experts to discuss the future of cloud computing.

Michael Short | Bloomberg | Getty Images

Google Faced with increasing pressure from top tech companies to lower so-called take rates, they are reducing the amount of revenue they maintain when purchasing software from other vendors in the cloud market.

Google Cloud Platform has reduced revenue sharing from 20% to 3%, according to someone familiar with the issue that asked them not to name to talk about internal policies.

It’s a cloud group Latest efforts To be more competitive since Thomas Kurian joined the company as CEO in 2019 Oracle.. Google, Amazon With web services Microsoft Azure, a cloud infrastructure, is attracting independent software makers to sell their products in Google’s cloud.

“Our goal is to provide our partners with the best platforms and the most competitive incentives in the industry,” a Google spokeswoman told CNBC in an email. “We can see that the marketplace pricing changes are underway. We will need to share this soon.”

Big tech companies in recent months have reduced the amount of money they hold on their platforms, whether they’re consumer apps or business products. While some of the pressure is related to competition, regulatory and legal concerns are also rising.

Google in July Decrease The percentage of consumers who buy apps from the Play Store is 30% to 15% of the first $ 1 million revenue a developer earns each year.

Also this year, Apple offered app developers the same savings, with annual sales of less than $ 1 million. California Judge as part of a proceeding filed by Epic Games Domination This month, Apple will no longer be allowed to ban developers from providing links or other communications that keep users away from Apple’s in-app purchases.

Meanwhile, in August, Microsoft reduced its share of game purchases from the Windows app store from 30% to 12%.

On Google’s cloud marketplace, customers can find products from well-known software companies such as: Confluent, Elastic, MongoDB When Twilio.. However, none of the companies listed on the AWS Marketplace include Accenture, Equifax, FactSet, Freshworks, Hewlett Packard Enterprise, and Xilinx.

AWS, the market leader, estimate From a UBS analyst earlier this year. They said the AWS Marketplace generates about $ 1 to $ 2 billion in annual revenue. Amazon declined to comment.

Microsoft Said in July Reduced the rate from 20% to 3%.

“Our charges only offset customer billing and billing, and operating costs to operate the market,” said Charlotte Jarkoni, Microsoft’s Chief Operating Officer for Cloud and Artificial Intelligence, in a statement. I am aiming for it. ” “We are not trying to steal some of our partners’ revenue. Our ecosystem, unlike other cloud vendors, is a channel to help our partners sell their solutions. Not the other way around. “

Google hasn’t yet turned its cloud platform into a profit engine for its parent company Alphabet.soEcond QuarterGoogle reported an operating loss of $ 591 million from the cloud segment with revenue of $ 4.6 billion. Alphabet still expects to advertise about 82% of its revenue and virtually all profits.

look: What Does Google Cloud Reorganization Mean For Your Business? Google cuts cloud marketplace revenue share from 20% to 3%

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