Alphabet and Amazon continued to lean on cloud computing and artificial intelligence (AI) as the chief drivers of revenue growth in Q4 2017.
While Alphabet's revenue grew 24% YoY to reach $32.3 billion in the quarter, $4.7 billion of that came from the segment that houses its cloud business, which was up 38% YoY.
Amazon’s revenue reached $60.5 billion in Q4, with $5.1 billion, or over 9%, coming from its AWS cloud segment.
Both Alphabet and Amazon continued to center in on their cloud platforms in Q4:
- The Google Cloud, which includes the Google Cloud Platform and G Suite, remains one of the fastest-growing businesses across Alphabet, and will remain a key strategic focus for the company moving forward. Google is the fastest growing major public cloud provider in the world, according to CEO Sundar Pichai, who said the Google Cloud platform became a $1 billion per quarter business in Q4.
- Meanwhile, the AWS segment generated $5.1 billion in the quarter, with sales surging 45% YoY. AWS had a $20 billion run rate in revenue in Q4, up from $14 billion in the year-ago quarter, according to CFO Brian Olsavsky. Across the 2017 year, about 10% of Amazon’s revenue came from AWS, and in Q4, AWS operating income accounted for over 60% of Amazon’s overall operating income.
And voice assistants and visual search technology are at the core of both companies' strategic offerings:
- Google put AI at the center of its new hardware line, and in the coming years, the company hopes to pivot to become an AI-first company, according to Pichai. For instance, the Pixel 2, which is infused with the Google Lens, leverages machine learning to help make it the leader in video rankings by industry standards. And Google Assistant is available on over 400 million devices, such as Android smartphones, iPhones, smart speakers, headphones and TVs.
- Amazon is positioning Alexa at the heart of the company, as the voice assistant can now control over 4,000 smart devices and be used to make online purchases. Developers are flocking to the Alexa platform — there are now 30,000 skills in the Alexa Skills store. This is likely due to a suite of new tools and developers kits, including the Alexa Mobile Accessory Kit and Alexa Premium Far-Field Voice Development Kit, that Amazon launched to make it easier to build more Alexa-enabled devices.
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