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Cloud computing: Google signs ‘milestone’ discount deal with UK government.

KEY POINTS

  • Google’s cloud unit has agreed a memorandum of understanding with U.K. government agency tasked with managing public sector procurement.
  • The tech giant has swiftly grown to take third place behind Amazon and Microsoft in the race to be a leader in the cloud computing industry.
  • The deal with Google is part of the government’s push toward a multi-cloud program where it doesn’t just rely on one supplier.

The U.K. government has signed an agreement with Google that will grant public sector bodies a discount on the tech giant’s cloud services.

Google’s cloud unit said Wednesday that it had agreed a memorandum of understanding with the Crown Commercial Service (CCS), the government agency tasked with procuring commercial services for the public sector.

The deal will allow public sector organizations like government departments, local councils and National Health Service (NHS) bodies to obtain a discount based on what their estimated spending on Google’s cloud platform would be for the next two years.

“This is a significant milestone for us, as we see the results of our focused investment in cloud services and solutions primed and tailored for the public sector,” said Mark Palmer, Google Cloud’s head of public sector EMEA.

“The U.K. public sector is a major focus for Google Cloud, and this is an opportunity to further support Her Majesty’s government in their digital transformation.”

Google has swiftly grown to take third place behind U.S. peers Amazon and Microsoft in the race to be a leader in the fast-growing cloud computing industry. According to research firm Canalys, it held 4.9% market share in the fourth quarter, with Microsoft Azure on 14.5% and Amazon Web Services (AWS) on 33.4%.

AWS and Microsoft Azure have their own separate agreements with the U.K. government. AWS was handed a contract from the government to help develop a portal for public sector procurement, while Microsoft came to a pricing arrangement with the CCS last month.

The deal with Google is part of the government’s push toward a multi-cloud program where it doesn’t just rely on one supplier. Google didn’t disclose how much of a discount public sector institutions would get on its cloud services.

Cloud is one of Google’s fastest-growing lines of business. The company broke out revenue numbers for the unit for the first time in its fourth-quarter earnings report. It generated $8.92 billion of revenue in 2019, compared with $5.84 billion a year earlier. It’s still way behind AWS, which booked more than $35 billion in revenue last year.

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