Google parent Alphabet still earns three-quarters of its revenue from advertising, but the cloud is growing faster and now accounts for nearly 11% of the company’s revenue. The segment, which contains business productivity applications, is also profitable. Google held 7.5% of the cloud infrastructure market in 2022, while Amazon and Microsoft together controlled about 62%, according to Gartner estimates.
Market leader Amazon Web Services introduced its Graviton Arm chip in 2018. “Almost all of their services are already ported and optimized to the Arm ecosystem,” said Chirag Dekate, an analyst at tech industry researcher Gartner, in an interview with CNBC. Graviton has taken over the businesses of Datadog, Elastic, Snowflake and Sprinklr, among others.
Alibaba announced Arm processors in 2021, and Microsoft did the same in November.
Arm isn’t completely new to Google, which began selling access to virtual machines, or VMs, that use Arm chips from Oracle-backed startup Ampere earlier this year.
Porting applications to Arm machines has made sense for organizations looking to reduce their spending on cloud computing due to economic concerns. When Arm Holdings filed for an IPO last year, it highlighted Amazon’s claim that Graviton could offer up to 40% better value than comparable server instances, such as the common “x86” model used by AMD and Intel processors.
Google used Arm-based servers for internal purposes to serve YouTube advertising, the BigTable and Spanner databases, and the BigQuery data analysis tool. The company will gradually move them to cloud-based Arm instances, called Axion, when they become available, a spokesperson said.
Datadog and Elastic plan to adopt Axion, as well as OpenX and Snap, the spokesperson said.
Wider use of chips building on Arm’s architecture could lead to reduced carbon emissions for certain workloads. Virtual slices of physical servers containing Axion chips deliver 60% greater power efficiency than comparable x86-based virtual machines, Thomas Kurian, Google’s cloud chief, wrote in a blog post. Arm chips, popular in smartphones, offer a shorter instruction set than x86 chips, commonly found in PCs.
The chips can also speed up applications.
Axion delivers 30% better performance than the fastest general-purpose Arm virtual machines in the cloud and 50% better performance than comparable x86-based virtual machines, Google said.
“I think it competes with their portfolio,” Dekate said.
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News Source : www.cnbc.com
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