Alphabet (GOOGL) Boosts Reach in Europe With New Italy Region
Alphabet’s GOOGL division Google opens a cloud region in Turin, which marks its second such establishment in Italy.
The company’s first cloud region in the country is located in Milan.
The new region comprises three cloud zones that are expected to aid the digitization of local companies, public administrations and global organizations.
Customers will hugely benefit from low latency, connectivity and data sovereignty functionalities with the support of the underlined region.
Google Cloud aims to offer seamless access to its services, such as the compute engine, Google Kubernetes Engine, cloud storage, Persistent Disk, CloudSQL and Cloud Identity, to customers in the country on the back of the new region.
Hence, the latest move is likely to expand the company’s reach to Italian cloud customers, which, in turn, will bolster Google Cloud’s adoption rate.
The company expects to create a market for technology partners, which can be valued at €1.904 billion within 2023-2025.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Expanding Cloud Region Network
With the Turin region, Google expands its presence in the Europe cloud market. Including the latest one, the company now has 11 cloud regions, each with three zones, in this market.
Apart from Europe, Google’s growing interest in the Asia-Pacific (APAC) region remains noteworthy.
Recently, the company added a region, which is in Tel Aviv, Israel. Further, the opening of cloud regions in India’s New Delhi and Australia’s Melbourne last year is an uptrend.
Looking across the world, the total number of Google Cloud regions currently stands at 36, with 109 zones and 176 network edge locations.
Notably, Google Cloud intends to further expand its cloud region network in Doha (Qatar), Berlin (Germany), Dammam (Kingdom of Saudi Arabia) and Queretaro (Mexico).
Also, it is preparing to open cloud regions in Malaysia, Thailand, New Zealand, Greece, Norway, South Africa, Austria and Sweden.
We believe that all these endeavors will contribute well to the performance of Google Cloud in the near term, as well as in the long haul.
In fourth-quarter 2022, Google Cloud revenues rose 32% year over year to $7.3 billion, accounting for 9.6% of the quarter’s total revenues.
Key Prospects, Competitive Scenario
With the increasing number of regions across the globe, Google remains well-poised to capitalize on the prospects of the global cloud market.
According to a Grand View Research report, the global cloud computing market is assumed to witness a CAGR of 14.1% from 2023 to 2030.
Google’s growing prospects in the booming cloud computing market are expected to aid Alphabet in winning investors’ confidence in the days ahead.
Coming to the price performance, GOOGL has lost 25.6% in the past year compared with the industry’s decline of 26.9%.
Apart from this, Google’s concerted efforts are expected to aid its competitive position against other major cloud players, such as Amazon AMZN and Microsoft MSFT, which are leaving no stone unturned to boost their presence in this promising market further.
Amazon is constantly benefiting from its solid momentum in its cloud computing arm, Amazon Web Services ("AWS"), which holds a dominant position in the cloud computing space on the back of its increasing number of data centers, availability zones and regions.
The company recently announced its plans to launch an AWS infrastructure region in Malaysia. Its launch of an infrastructure region in Switzerland, namely AWS Europe (Zurich), is a positive. It launched its second infrastructure region in Australia, which is located in Melbourne.
AWS intends to set up an infrastructure region in Auckland, New Zealand, comprising three availability zones.
Meanwhile, Microsoft Azure became the key driver for Microsoft. MSFT is currently riding on the robust adoption of Azure’s cloud offerings. Azure's increasing number of availability zones and regions across the globe, and its strength in the consumption-based business are likely to continue driving MSFT's cloud momentum in the near term.
Microsoft’s Azure is gearing up for the opening of five data centers in APAC, namely South Central India, Indonesia Central, Malaysia West, New Zealand North and Taiwan North, which will be located in Hyderabad, Jakarta, Kuala Lumpur, Auckland and Taipei, respectively.
Zacks Rank & Stock to Consider
Currently, Alphabet carries a Zacks Rank #3 (Hold).
A better-ranked stock in the broader technology sector is Arista Networks ANET, which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks shares have gained 23.8% in the past year. The long-term earnings growth rate for ANET is projected at 14.17%.
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