Google Taps Machine Learning to Lure Companies to Its Cloud

By
  • Jack Clark
Published
  • March 24 2016, 6:30am EDT

(Bloomberg) -- Google will create business tools and products based on its own artificial intelligence technology, seeking to entice more companies to rent its cloud-computing services.

The Alphabet Inc. unit plans to offer services such as audio transcription and image identification built around its machine-learning software. Google has used this technology for its own products, and is now making the capabilities available for other companies to rent and access over the Internet. The company also said it won several new large cloud customers, including the interactive division of Walt Disney Co. and Coca-Cola Co.

Google is aiming to broaden the appeal of its cloud services to more corporate customers. After letting Amazon.com Inc. get an early lead in the booming market, Google hired Silicon Valley legend Diane Greene to conjure a comeback. On Tuesday, the Internet giant said it will expand the number of places people can buy its cloud services, from four regions to 16 in the next 18 months. That revealed twin strategies for gaining share: developing new products based on its powerful internal technology, while meeting the sometimes-idiosyncratic needs of large companies. Google is third in cloud revenue versus Microsoft Corp. and Amazon Web Services, according to analysts from Morgan Stanley.

“In the future almost everything will be done in the cloud," Google Chief Executive Officer Sundar Pichai said in a speech at the company’s Google Cloud Platform NEXT conference, held Wednesday at San Francisco’s Pier 48. “For years we have been investing in scaling up our infrastructure to do this."

While modern cloud systems are based on “decades-old” technology, Google said, the company’s forthcoming products and services are designed for the next wave of cloud computing.

Google’s plan to open its speech-recognition services to third parties sent shares of Nuance Communications Inc. lower on concern about increased competition in the voice-recognition software market. Nuance dropped 6.5 percent to $17.90 at 3:10 p.m. in New York.

Schmidt’s Thousands

Greene said the new machine-learning cloud services will turn Google into "an applied R&D team for our customers, in effect."

Alphabet Chairman Eric Schmidt said the Mountain View, California-based company will put "thousands of people" to work on the systems that support its cloud over the next few years, in part to build the data center and network infrastructure needed to handle many large corporate customers.

Along with the machine-learning products, Google unveiled new ways to monitor the software that runs on its cloud, analyze the data held within it and link different products together with networking.

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