Google Cloud Wins Deal With SpaceX For Starlink Internet Connectivity

Google announced Thursday that its cloud unit won a deal to supply computing and networking resources to SpaceX, Elon Musk’s private space development company, to help provide Internet services through its Starlink satellites.

SpaceX will install ground stations in Google data centers that will connect to SpaceX’s Starlink satellites, with a view to providing fast Internet service to businesses in the second half of this year.

The deal represents a victory for Google as it works to take Amazon and Microsoft out of the fast-growing cloud computing market.

Investors are counting on Google’s fledgling cloud business to drive growth in case their ad business slows down. While Google’s cloud business generated just 7% of parent company Alphabet’s total revenue in the first quarter, it grew nearly 46% year-over-year, compared to growth of 32% for advertising services from Google.

It’s also an unusual type of deal for Google, or any other cloud provider, as it relies heavily on Google’s internal network connecting data centers, rather than simply outsourcing functions like computing power or storage. data to these data centers.

“This is one of a kind. I don’t think anything like this has been done before, ”said Bikash Koley, Google’s director of global networking. “The real potential of this technology became very obvious. The power of combining the cloud with universal secure connectivity is a very powerful combination. “

“We were chosen for the quality of our network and the distribution and reach of our network,” said Thomas Kurian, CEO of Google’s cloud group.

Amazon popularized the public cloud business with the 2006 launch of general-purpose storage and computing tools from its Amazon Web Services division. Google introduced its own computing service in 2012. But over the past two decades, Google has also spent money assembling a private fiber-optic network to connect its data centers, Koley said. While much of Google’s cloud growth comes from serving the computing and storage needs of clients such as Goldman Sachs and Snap, the deal with SpaceX will rely heavily on Google’s network capabilities.

Cloud providers have increasingly focused on the telecommunications industry, particularly with the rise of 5G connectivity. Last month, for example, Amazon said Dish would use AWS infrastructure to provide 5G service to consumers.

In the case of SpaceX, there is no need for cell phone towers. Instead, customer devices will communicate with satellites and then the satellites will connect to Google’s data centers. Within those data centers, customers can run applications quickly using Google’s cloud services, or they can send the information to the services of other companies that are geographically close, allowing low latency for minimal delay. . The data is then returned directly through Google’s data centers to the satellites and then to the end users.

The deal could last seven years, according to a person who declined to be named when discussing confidential terms.

Starlink’s service could be valuable to consumers living in places with limited internet access, as well as businesses and government organizations running projects in remote areas, Kurian said. He anticipates that having Starlink on Google’s cloud network will lead organizations to deploy applications within Google’s cloud to take advantage of high speeds.

Google isn’t the only cloud service provider working with Starlink.

In October, Microsoft said it was working with SpaceX to bring Starlink internet connectivity to modular Azure cloud data centers that customers can deploy anywhere. SpaceX would still rely on Google’s data centers in that scenario, a person familiar with the matter said. (The data would travel from the customer’s Azure modular data center through the Starlink satellite to Google’s data center and then to other cloud services, and back in the opposite direction. ”Our current partnership with SpaceX Starlink provides a high-speed, low-latency broadband satellite to extend our Azure capabilities with global satellite connectivity and unlock cloud computing in more scenarios, “a Microsoft spokesperson told CNBC in an email.” Efforts are currently underway to expand on those scenarios and we’ll have more to share in the coming months. ”)

Initially, SpaceX will deploy the ground stations in Google’s data centers in the United States, but the company wants to expand internationally, the person said.

SpaceX is one of the most valuable private start-ups in the world, raising money at a valuation of $ 74 billion in February, CNBC reported. Google invested $ 900 million in SpaceX in 2015. SpaceX has launched more than 1,500 Starlink satellites, and last week the company said more than 500,000 people have requested or made a deposit for Internet service.

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