Google Cloud is expanding into a bunch of new regions, despite hefty losses

Google Cloud has announced plans to launch a host of new cloud regions in Europe and Africa, in an effort to meet growing customer demand across the globe.

As detailed at Google Cloud Next ‘22, the company will open new regions in Austria, Greece, Norway, Sweden and South Africa, which in combination with previous commitments will expand the scope of the network to 48 localities in total.

Customers local to the new regions are expected to benefit from improved latency, as well as the ability to more easily meet complex data residency and security requirements. By 2030, Google also expects the expansion to generate more than 300,000 additional jobs across the countries in question.

Google Cloud performance

The expansion of Google Cloud into new regions signals a continued commitment at Google to building out its public cloud division. However, unlike competitors Amazon and Microsoft, Google is yet to find a way to push its cloud computing business into the green.

Although Google Cloud had a run rate of $6.3 billion last quarter (up 35% on the previous year), it recorded an overall loss of $850 million. Over the last four years, meanwhile, the division has lost in the region of $17 billion.

With the price of energy on the rise and inflation set to trigger an increase in the cost of data center hardware, it’s also unlikely that Google Cloud will tip over into profitability in the near future.

The message from Google, when pressed on the losses recorded, has been that cash needs to be spent in order to be made. According to Ruth Porat, CFO, the plan is to continue to invest heavily in expanding Google Cloud’s infrastructure network, to position the company to capitalize on the rapid growth of the cloud market.

“While Cloud operating loss and operating margin improved in 2021, we plan to continue to invest aggressively in Cloud given the sizable market opportunity we see,” she said back in February, on an earnings call with analysts. “We do remain focused on the longer-term path to profitability and over time, operating loss and operating margin should benefit from increased scale.”

Currently, Google Cloud operates 35 regions (five of which were opened in 2022), 106 availability zones and 173 network edge locations. But alongside plans drawn up early this year to bring new regions to the likes of Malaysia, Mexico, New Zealand and Thailand, the announcements at Cloud Next will increase the size of this network by a significant margin.

“These cloud regions help bring innovations from across Google closer to our customers around the globe, and provide a platform that enables organizations to transform the way they do business,” said Google.

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