Feb 06, 2017 08:32 AM EST
Google Cloud Platform Scores $2 B Deal With Snap, But Deal Doesn't Bar Snap From Using Other Services
Google has scored another huge victory in the hotly contested cloud computing space. Snap, the parent company of the popular mobile messaging platform Snapchat, has signed a massive cloud computing contract with Alphabet to use the company's cloud computing service, Google Cloud Platform.
Google Scores A Massive $2 Billion Cloud Contract
Snap is spending a whopping $2 billion with Google's parent company Alphabet Inc. over the next five years to use the company's s cloud-computing services, Google Cloud.The messaging platform has engineered its technology primarily around computing, storage, bandwidth and other IT infrastructure offerings supplied by Google.
According to TechCrunch, the terms of a license platform agreement Snap has signed with Google was detailed in Snap's initial public offering (IPO) filing. Under the terms of the cloud computing deal, which was completed last January 30, Snap is committed to purchasing at least $400 million in cloud services for each of the next five years.
Additionally, in the company's Securities and Exchange Commission filing, Snap has also listed Google as a key risk factor. Snap also stated that it currently relies on the Google Cloud services for the vast majority of its computing resources.
Snap is no longer stranger to Google's cloud business, Snap has been using Google infrastructure since at least 2013, but today's deal will likely make it one of Google's largest and perhaps the most important cloud computing deals today.
A Big Win For Google Cloud Platform
Like the other major cloud providers in the market, which include Amazon Web Services and Microsoft Azure, Google aggregates a huge amount of IT infrastructures and rents them out to companies who need cloud computing services.
For Google, the $2 billion cloud deal is a big win for the entire Google's cloud division, which currently facing a more increased competition in the market. The deal is also another way for the search company to catch up with the industry's leaders, the Amazon Web Services, and Microsoft Azure.
However, Snapchat's massive $2 Billion cloud computing deal with Google doesn't bar it from using other cloud providers, which means that SnapChat could still use other cloud provider services, such as AWS and Microsoft Azure, for different computing needs, according to Business Insider.
Snap will get some discounted pricing for using Google Cloud Platform, but Google has declined to be more specific about pricing matters, according to Bloomberg.
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