Google G Suite passes 6 million customers

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Google CEO Sundar Pichai speaks during a conference in Brussels on January 20, 2020.

Kenzo Tribouillard | AFP | Getty Images

Google’s G Suite bundle of productivity software for businesses, schools and governments had over 6 million paying businesses in March, up from 5 million in February 2019, executive Javier Soltero told CNBC on Tuesday.

The growth comes in an increasingly important area for Google parent Alphabet, which disclosed cloud revenue, including from G Suite, for the first time in February. Expansion in the category could help Alphabet grow outside its core area of advertising, which made up 83% of Alphabet’s revenue last year.

However, G Suite in particular faces stiff competition from Microsoft’s entrenched Office suite and Office 365 set of cloud-based services, which had 87.5% of the market for productivity suites in 2018 versus Google’s 10.4%, according to estimates shared by industry-research company Gartner.

“The business of G Suite is growing at an incredibly healthy and, frankly for me, surprising rate,” Javier Soltero, vice president and general manager of G Suite at Google, told CNBC in an interview on Tuesday. Soltero joined Google in October after working at Microsoft, where he had been corporate vice president for the Office product group, among other roles.

Millions of people have been working from home to reduce the spread of coronavirus. That has boosted adoption of the Google Meet productivity-oriented video-calling service, one component of G Suite alongside Gmail, Google Drive and other services. The service has 25 times more users than it did in January, Soltero said. Google Meet is separate from the consumer-focused Hangouts, which is available to anyone with a Google account.

Last month, as cases of COVID-19 were ramping up, Google extended features of Meets — including space for up to 250 participants on any given call and live streaming for up to 100,000 viewers on a domain — that are normally reserved for customers of the G Suite enterprise tier of service to all of its G Suite customers until July 1. Now that’s been extended until September 30. 

Services that compete with Meet, like Cisco’s Webex, Zoom and Microsoft’s Teams, have also taken on new users in the past few months.

Alphabet had $2.61 billion in cloud revenue in the fourth quarter, up 53% on an annualized basis, representing 5.7% of total revenue. The total includes contributions from Google Cloud Platform, the cloud infrastructure for running third-party applications that competes with Microsoft’s Azure and Amazon Web Services. “The growth rate of GCP was meaningfully higher than that of cloud overall,” Alphabet finance chief Ruth Porat told analysts in February, noting that G Suite growth comes from increase in the number of seats and the amount of revenue the company pulls in from each seat.

Google made Meet and Google Classroom available to 1.3 million New York City students in just days as the city’s education department sought to stop the use of Zoom, Soltero said. And within days, he said, the company delivered access to millions of students in Italy following a request from that country’s ministry of education. After working in enterprise software for 25 years, Soltero was surprised how quickly Google was able to roll out its services to so many people. 

“We are guided by building products that people choose. That’s a core principle. That’s been what I’ve admired about G Suite from the beginning,” he said.

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