Market Research Report
Webscale Playbook - Alphabet: Data Center Splurge Will Power GCP and the company's R&D into AI, Quantum Computing, Self-Driving Cars and Healthcare
|Published by||MTN Consulting, LLC||Product code||753497|
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|Webscale Playbook - Alphabet: Data Center Splurge Will Power GCP and the company's R&D into AI, Quantum Computing, Self-Driving Cars and Healthcare|
|Published: November 30, 2018||Content info:||
Alphabet is out to prove that it is more than just an advertising business. That's important as the company remains heavily exposed to ads, which accounted for about 86% of 2017 revenues. Yet, Alphabet is facing new competition in ads from Amazon, plus ongoing regulatory scrutiny in Europe. Fortunately the company is generating incredible amounts of cash each quarter, and now has just under $102B in cash & stocks on hand. That has allowed the company to invest heavily in its network, with capex amounting to a telco-like 17.2% of revenues over the last four quarters. Alphabet also spends another ~15% of revenues on R&D. The goal of these investments is help the company enter (or create) new markets, with less ad-dependent business models. Alphabet's vast network infra supports the company's cloud computing and device portfolio, as well as AI-based projects in transportation (Waymo), logistics (Project Wing), and healthcare (Verily). As a result, Alphabet's network, IT & software capex has soared, to $8.2B over the 4Q17-3Q18 period (from $4.1B the year prior).
Below are a few highlights from the report: