Google (NASDAQ:GOOG) is aggressively pushing for cloud computing dominance by landing a marquee with PayPal (NASDAQ:PYPL) in an effort to go head to head with rivals Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT).
And while Google is close to sealing the deal, sources familiar with the matter revealed that PayPal is still not making any final decision. The online payments system is still considering other leading providers. PayPal is also unlikely to make any major changes to its technology infrastructure because the fourth quarter is the most crucial period for online commerce.
Although Google is a major player in the rapidly expanding cloud infrastructure market, it trails behind Amazon and Microsoft, both of which are vying for a partnership with PayPal as well.
Amazon Web Services, in particular, is dominating the cloud infrastructure market after opening up large data centers across the globe. The online retail juggernaut is also offering new software tools that allow large companies and government entities to offload their computing and storage needs.
VMware (NYSE:VMW) co-founder Diane Greene has been in hot pursuit of Google’s competitors since taking the help 9 months ago. Her team is focusing on pricing as a way to lure large enterprises. To up the ante, Google provided “$80 billion in cash and equivalents at the end of the second quarter and a $10 billion annual capital expenditure budget for parent Alphabet,” to offer lower prices to attract corporations.
Google has been pouring its resources into improving its cloud technology, along with sales, marketing, and support to meet enterprise standards. During Google’s second-quarter earnings call, CEO Sundar Pichai highlighted Greene and her team’s effort to push for dominance in the cloud-computing segment.
“Diane has initiated a set of changes and essentially she has integrated our go-to-market strategy with our engineering and product efforts. I see a shift to a world-class enterprise approach, and it’s definitely having an impact on the type of conversations we are having and the outcome of the RFPs (requests for proposals) we are engaged in,” he said.
Reps from PayPal, Google, Amazon, and Microsoft declined to comment on the matter.
PayPal, with its recognizable brand and connections to big banks, would be a covetable client for Google. As with all big banks, PayPal requires strict data protection to keep financial information safe.
In a CNBC interview, Mark Mahaney, an analyst at RBC Capital Markets in San Francisco said cloud computing is “really kind of reaching these tipping points in large companies, including financial services firms [which] are really starting to embrace cloud computing.”
In addition, PayPal is a large tech company built before the cloud era. Using its own data centers, the online financial institution is processing over $10,900 worth of payment volume per second and storing information on 188 million active accounts in over 200 markets.
During PayPal’s first-quarter earnings call, CEO Dan Schulman said, “We run one of the largest private cloud environments in the world.”
As far as moving its data infrastructure to the cloud, PayPal is likely to start with test and development workloads before moving forward with moving critical customer information. The move does not mean PayPal will be abandoning its own data centers and technology.