Google is making strides in the cloud computing market with the introduction of a custom-built Arm-based server chip. The announcement was made at the Cloud Next conference in Las Vegas, with the chip set to become available later in 2024. This move is seen as Google’s attempt to compete with rivals such as Amazon and Microsoft, who have been using a similar strategy for years.
Cloud Infrastructure Market Competition
Google, Amazon, and Microsoft are key players in the rapidly growing market for cloud infrastructure. This market involves organizations renting out resources in remote data centers and paying based on usage. Google’s parent company, Alphabet, still earns three-quarters of its revenue from advertising, but the cloud segment is growing faster and now accounts for almost 11% of the company’s revenue. Despite this growth, Google held only 7.5% of the cloud infrastructure market in 2022, while Amazon and Microsoft together controlled around 62%, according to Gartner estimates.
Arm-Based Chips in the Market
Amazon Web Services introduced its Graviton Arm chip in 2018, and it has been adopted by several companies including Datadog, Elastic, Snowflake, and Sprinklr. Alibaba and Microsoft also announced Arm processors in 2021. Google is not entirely new to Arm, having started selling access to virtual machines that use Ampere’s Arm-based chips in 2022. The adoption of Arm machines has been beneficial for organizations looking to cut down on cloud computing expenses.
Benefits of Google’s Arm-Based Chip
Google has been using Arm-based server computers for internal purposes, including running YouTube advertising and various databases and analytics tools. The company plans to gradually transition these to the cloud-based Arm instances, named Axion, when they become available. Companies such as Datadog, Elastic, OpenX, and Snap plan to adopt Axion. The use of Arm’s architecture could lead to lower carbon emissions for certain workloads. Google’s cloud chief, Thomas Kurian, stated in a blog post that Axion chips deliver 60% more energy efficiency than comparable VMs based on the x86 model. Additionally, Axion offers 30% better performance than the fastest general-purpose Arm-based virtual machines in the cloud and 50% better performance than comparable VMs based on x86.
