Alphabet (GOOGL – Free Report) is leaving no stone unturned to expand its presence in the United Kingdom.
This is evident from Google’s latest investment plans for its U.K. data center, in which it intends to infuse $1 billion. The move follows Alphabet’s purchase of a central London office building for $1 billion in 2022 and another site in nearby King’s Cross.
The underlined data center will be based on a 33-acre site located in the town of Waltham Cross.
Google strives to meet the growing demand for its AI and cloud services in the U.K. on the back of its latest move.
The move positions the company well to capitalize on the growth prospects present in the U.K. cloud space. Per a report from Statista, the United Kingdom’s public cloud market is expected to generate revenues worth $26.73 billion in 2024. The figure is expected to reach $37.84 billion by 2028, registering a CAGR of 9.1% between 2024 and 2028.
Expanding Cloud Regions Network
Google’s latest investment plans are in sync with its growing efforts to strengthen its footprint in Europe.
Apart from the U.K. data center, the opening of its second cloud region in Italy last year, which is located in Turin, remains a major positive.
At present, Google operates 11 cloud regions in Europe, each with three zones.
Apart from Europe, Google’s growing interest in the APAC region remains noteworthy.
The company is gaining well from its cloud regions located in Tel Aviv, Israel; New Delhi, India and Melbourne, Australia.
Looking across the world, the total number of Google Cloud regions is currently 39, with 118 zones and 187 network edge locations.
Google Cloud’s newly added regions include Berlin, Germany; Doha, Qatar and Dammam, Saudi Arabia.
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 Mexico, Malaysia, Thailand, New Zealand, Greece, Norway, South Africa, Austria and Sweden.
We believe all these endeavors are expected to contribute well to the performance of Google Cloud in the near term as well as in the long haul.
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.
Per 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.
This apart, Google’s concerted efforts are expected to aid its competitive position against other major cloud players, such as Amazon (AMZN – Free Report) and Microsoft (MSFT – Free Report) , which are also leaving no stone unturned to boost their presence in this promising market further.
Amazon is constantly benefiting from the 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’s recent launch of its second infrastructure region in Canada, which is in Calgary, remains noteworthy. AWS’ increasing regions in Europe remain a plus. The company operates seven AWS Regions and 21 availability zones across Europe in Frankfurt, Ireland, London, Milan, Paris, Stockholm and Zurich.
Currently, AWS has 105 Availability Zones across 33 geographic regions. It further plans to launch 12 more Availability Zones and four more AWS regions in Malaysia, New Zealand, Thailand and the AWS European Sovereign Cloud.
Meanwhile, Microsoft Azure became Microsoft’s key driver. 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 operating in more than 60 cloud regions at present.
Zacks Rank & Stocks to Consider
Currently, Alphabet carries a Zacks Rank #3 (Hold).
A better-ranked stock in the broader technology sector is Arista Networks (ANET – Free Report) , sporting 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 returned 116.5% over the past year. The long-term earnings growth rate for ANET is pegged at 19.77%.
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