Google Cloud is hiring a legion of blockchain experts to expand its business
Google’s cloud division has formed a group to build business around blockchain applications, following efforts to grow in retail, health care, and other industries.
Success could help Google further diversify away from advertising and become more prominent in the growing market for computing and storage services delivered from remote third-party data centers.
Blockchain advocates often talk about constructing decentralized applications that leave large intermediaries out of the equation. In particular, DeFi (short for “decentralized finance”) is a rapidly growing sector of the crypto market that aims to cut out middlemen, such as banks, from traditional financial transactions, like securing a loan.
With DeFi, banks and lawyers are replaced by a programmable piece of code called a smart contract. This contract is written on a public blockchain, like ethereum or solana, and it executes when certain conditions are met, negating the need for a central intermediary.
This idea of decentralized apps has become more popular among technologists who envision Web3, a decentralized version of the internet that breaks away from Web 2.0, which saw an explosion of user-generated content such as blogs and social networks. Some of those services eventually came to be owned by large internet players — including Google, which bought Blogger and YouTube (which is now one of its strongest businesses).
Today Amazon, Google and other cloud-computing providers represent a type of centralization, by operating vast facilities that offer computing services to millions of customers.
That’s not about to stop Google from trying to capitalize on an opportunity. The cloud group plans to hire a slew of people with blockchain expertise, said Richard Widmann, head of strategy for digital assets at in Google’s cloud unit.
“We think that if we do our jobs right, it will drive decentralization,” he said.
Google’s cloud marketplace already offers tools developers can tap to start building blockchain networks, and it has blockchain customers, including Dapper Labs, Hedera and Theta Labs, along with exchanges. Google also offers datasets that people can explore with the BigQuery service to view transaction history for Bitcoin and other currencies.
Now, Google is considering what types of services it can offer directly to developers in the blockchain space, Widmann said.
There are “things we can do to reduce the frictions some customers have with respect to paying for centralized cloud utilizing cryptocurrencies,” Widmann said. Foundations and other entities engaged in development in the world of digital assets are mainly capitalized with cryptocurrencies, he said.
Thomas Kurian, Google’s cloud CEO, has identified retail, healthcare, and three other industries as target areas. As customers in those sectors choose to adopt blockchain technologies, Google can help, Widmann said.
An explosion of crypto curiosity
Other cloud providers have become crypto-curious, too, although none other than Google has announced the establishment of a blockchain business group.
Amazon Web Services, which led the cloud infrastructure market in 2020 with 40.8% share, according to technology industry researcher Gartner, announced a managed blockchain service in 2018. The website for the AWS service identifies Accenture, AT&T, and Nestle as customers.
Smaller cloud providers are also aware of the opportunity.
“We have a lot of blockchain and crypto customers on the platform,” said Gabe Monroy, chief product officer at DigitalOcean, which focuses on small and mid-size businesses. “It was one of our biggest cohort growth segments over 2021. We’re definitely paying close attention to the space.”
Cryptocurrency companies are also starting to cater to software developers. Cryptocurrency exchange operator Coinbase has announced a slew of services under the banner Coinbase Cloud, and it describes the tools as being capable of running on multiple clouds.
“This is kind of like our AWS for crypto,” Coinbase CEO Brian Armstrong said at the JPMorgan Crypto Economy Forum in November. “We’re trying to externalize some of the services that we’ve had to build. A lot of hard engineering has gone into how do we store crypto and integrate all the blockchains and monitor transactions for AML purposes and do trading and staking and all that.”
Meanwhile, the founders of San Francisco start-up Alchemy told CNBC that they hope to be compared with AWS in the blockchain realm. Alchemy announced in October that it had raised venture capital at a $3.5 billion valuation.
Google has been making itself more comfortable in the blockchain universe lately.
Company veteran Shivakumar Venkataraman has taken charge of a new blockchain group, Bloomberg reported last week. That organization is separate from the cloud team oriented around digital assets, a spokesperson said.
“We’re going to look to the left and right of ourselves to extent there’s opportunities to work with them,” Widmann said of other Google initiatives.
In a recent letter, YouTube CEO Susan Wojcicki wrote that the video service has been inspired by Web3.
“The past year in the world of crypto, non-fungible tokens (NFTs), and even decentralized autonomous organizations (DAOs) has highlighted a previously unimaginable opportunity to grow the connection between creators and their fans,” she wrote.
About 82% of Google parent Alphabet’s revenue came from advertising in the third quarter. Alphabet reported a $644 million operating loss on $4.99 billion in cloud revenue, which was up almost 45%. Gartner estimated that Google held 6.1% market share in 2020.
–Mackenzie Sigalos contributed to this report.