Google will soon make more money from the cloud than advertising, says one of the company’s first employees

Google's Mountain View Office

One high ranking Google executive believes the search giant will soon derive more of its revenue from providing infrastructure than selling advertising. The prediction comes courtesy of Urs Hölzle, senior vice president of technical infrastructure at Google and the eighth overall employee to join the company.

During a keynote presentation on Wednesday at the Structure conference in San Francisco, California, Hölzle said, “the goal is for us to talk about Google as a cloud company by 2020.”

It’s a bold claim that will require the company to completely reinvent itself. As Business Insider notes, at present Google’s advertising division generates almost 90 percent of the company’s overall revenue. Moreover, becoming a leading provider of cloud infrastructure will require Google to take on and surpass the industry’s current heavyweights, Microsoft and Amazon, both of whom are better aligned to continue to dominate with their Azure and AWS businesses.

It’s a fact Hölzle is well aware of, but one he says the company is well positioned to change. “We’re clearly coming from behind,” he said at the conference, and went to state that the position Google finds itself with its cloud business is not unlike the one it faced after it first shipped Android. The company was not first to market with its smartphone operating system. However, Android is now the world’s most popular mobile operating system by a wide margin.

“I hope we’re going to be the Android of that story,” he said.

According to Hölzle, Google will achieve its turn around by leveraging its expertise at improving the cost efficacy and performance of its existing cloud infrastructure to underprice its competitors.

Hölzle ended his presentation by promising Google will make announcements in the near future that will “remove any doubt” as to how the company plans to reinvent itself.

Image credit: Flickr user Living-Learning Programs

[source]Business Insider[/source]

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