Snap and Google will be partnered for the next five years, according to Snap’s S-1 filing released last week.
Completed on January 30, the deal commits Snap to purchasing $400 million in Google's cloud services annually until 2022, totaling $2 billion over the period.
The new lease is a formal continuation of a partnership that began around 2013, TechCrunch notes.
The deal is a big win for Google Cloud, as mobile video is poised to make up a larger portion of the data storage space. Snapchat users are highly engaged, with the average daily user turning to the app 18 times each day, according to Snap's S-1. And although Google doesn’t break out revenue from its cloud business, instead lumping it together with nonadvertising, which includes the Google Play store, the $400 million deal will give it a hefty annual bump. In Q4 2016, nonadvertising accrued $3.4 billion in sales.
Mobile video already accounts for more than half of all mobile traffic. In 2015, mobile video accounted for 55% of total mobile traffic. That’s set to reach 75% by 2020, according to Cisco. This means that in three years, 23 exabytes (23 billion gigabytes) of the 31 exabytes moving across networks each month in 2020 will be from mobile video.Mobile video is growing at a rapid pace. Data from mobile video will grow at an annualized rate of 62% between 2015 and 2020. That’s faster than the 53% average annual growth of overall mobile data over the same period, Cisco notes.Video-focused devices and apps will only compound mobile video’s share of mobile data. Devices such as augmented and virtual reality headsets, Spectacles, and video- and AR-enabled mobile apps (like Pokémon Go) from companies like Apple, will likely lead to an even greater shift in the share of data mobile video takes.
Partnering with Google also gives Snap a foot in the door for future partnerships the two companies may make. For example, in early 2016, Google and Snap discussed partnering to develop a feature that would let a Snapchat user point their phone camera at an object to get information about it from Google’s search, according to Bloomberg. And while nothing has yet come of this discussion, it could point to similar future alliances.
Cloud computing — on-demand, internet-based computing services — has been successfully applied to many computing functions in recent years.
From consumer-facing, web-based productivity apps like Google Docs to enterprise database management suites, the tools businesses rely on are increasingly moving to the cloud.
But developing a cloud strategy is no easy task. Public cloud solutions will likely come to dominate the market over the next decade, but business constraints, such as security concerns and the limitations of existing infrastructure, make it difficult for companies to fully adopt the public cloud right now.
That means that hybrid clouds, in which multiple cloud implementations (including public and private) are connected, will remain popular for the time being, at least until these constraints are addressed. The tech giants that dominate the IaaS market — Amazon, IBM, Microsoft, and Google — are constantly expanding their offerings to address current business constraints as they compete for market share.
Christina Anzalone, senior research analyst at BI Intelligence, Business Insider's premium research service, has compiled a detailed report on cloud computing that evaluates the current business considerations for the various cloud solutions and provides an outlook on the state of the market.
Here are some of the key takeaways from the report:
Cloud computing solutions have gained traction because they're flexible and cost efficient. Sixty-seven percent of companies used an Infrastructure-as-a-Service solution in 2015, like the cloud, for some part of their business, up 19% from the prior year.All cloud solutions provide certain benefits that are becoming increasingly essential to businesses in the digital age. These include on-demand self-service, rapid elasticity, and broad network access, among others.Security needs, demand predictability, existing infrastructure, and maintenance capabilities are key business considerations for enterprises choosing between cloud implementations.While hybrid cloud strategies will remain popular in the near term, the market is likely to shift toward the public cloud over time. That's because costs are falling, providers are developing solutions that address main concerns with the public cloud, and business practices like agile development and data analytics are dependent on advantages the public cloud provides. However, industries that handle sensitive information, like financial services and healthcare, will likely prefer hybrid and private cloud strategies given regulatory restrictions.Amazon Web Services is the dominant cloud computing provider by market share, followed by Google, IBM, and Microsoft. Because the latter three companies have had little success taking on Amazon, market-share gains are likely to come at the expense of smaller competitors.
In full, the report:
Explains the different cloud computing strategies and benefits of cloud computing.Evaluates key business considerations – security needs, demand predictability, existing infrastructure, and maintenance capabilities – for enterprises choosing between cloud implementations.Provides and outlook for trends and major players in the cloud computing market
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