Tech

Google, Thales, form JV to build hyperscale sovereign cloud

Google and French defence and industry titan Thales have cooked up an interesting arrangement that will see the latter create a sovereign version of the G-Cloud.

The two have created a joint venture in which Thales – a sprawling entity with interests in aerospace, defence, transport, and energy – will hold a majority share. Together, they’ll build a hyperscale cloud that uses Google’s cloud tech but doesn’t touch any of the ad giant’s physical infrastructure.

The result will be a cloud that behaves like the G-Cloud but, as it is resident on French soil and Google doesn’t control it, meets local standards for government use.

The cloud will be updated as Google evolves its own cloud, but Thales will inspect those changes before putting them into production. Thales will also ensure support is delivered from France.

Sovereign clouds are not new – plenty of small providers have carved out a niche by emphasising they’re not beholden to laws of other jurisdictions. Clouds for government users are also anodyne – Google already has a cut of its cloud for the US government, as do Microsoft and AWS.

But a joint venture to create a captive version of a public cloud platform is novel.

Google’s cloud is well-regarded but rated as less comprehensive than Azure or AWS. The company also lacks the enterprise roots, applications, and sales force that help the likes of Oracle to build a cloud business. One tactic to grow the business has reportedly been to discount in pursuit of substantial customers willing to make multi-year commitments.

The search goliath’s cloud efforts have produced torrents of red ink – $14.6 billion over the three years to 2021.

In Google’s most recently reported quarter it reported strong growth for its cloud: Q2 2021 saw $4.6 billion of revenue arrive, up from $3 billion a year earlier.

It still made a loss of $591 million – a terrifying number but far less so than the $1.43 billion it lost in the corresponding quarter in 2020.

Google CEO Sundar Pichai has also suggested that previous losses were due, in part, to the cost of building a cloud and that once spending drops, better results will follow.

The announcement of the new French cloud doesn’t specify whether Google or Thales will wear the cost of construction, but it would be a strangely lop-sided partnership if Google is stumping up all the cash.

The Register imagines the news won’t go down well with French cloud operator OVH. Nor at one Google Cloud partner, VMware, which overnight announced support for partners that wish to build sovereign clouds on its stack.

Such partners may now wonder if Google is talking to companies with pedigrees like Thales’. ®


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