Shares of Alphabet Inc., Google's parent company, skyrocketed after the company signified its intention to penetrate the flourishing cloud computing business to rival current cloud leader Amazon.
The company's shares notched a remarkable $775.70, which is equivalent to a 2 percent boost, on Thursday, Nov. 19, upon revealing that it appointed ex-VMware boss and cofounder Diane Greene as new head of its cloud-computing business (bringing together the company's Cloud Platform, Google for Work and Google Apps).
MKM Partners analyst Rob Sanderson tells the The Wall Street Journal that Google is quite definitely behind in this arena. He adds that the company will have difficulty in competing against other tech titans which have rendered greater strides in cloud computing, specifically the Amazon.com Inc.
"I think the public cloud would have been theirs to lose had they recognized the opportunity and began investing in the services layers 10-years ago," says Sanderson.
Sanderson thinks that Amazon Web Services is so powerful with its rich services. He believes that it's going to be quite challenging for any company, including Google, to get closer to what Amazon has already achieved.
The cloud business of Amazon went up by 78 percent in the recent quarter when compared to the figure it generated a year ago. It was able to generate $2.1 billion earnings.
It is furthermore worth noting that Google will also compete with other IT giants on its cloud computing business, including Microsoft and Oracle.
Google's boss Sundar Pichai says the cloud computing business is truly a considerable and fast-growing area for Google. As such, the company is "investing for the future."
"This is a salvo across the bow of every competitor that Google is serious as they move forward into this new frontier, focusing their resources on taking advantage of the huge market opportunity that cloud offers," says Rob Stroud, an analyst at Forrester Research.
Senior Vice President of Infrastructure at Google Urs Hölzle said during a tech conference this week that the cloud revenue can even surpass Google's advertising revenue by 2020.
On Friday, Nov. 20, Google's shares slipped to $756.60.
