Recently, Alphabet Inc.’s (GOOGL - Free Report) Google Cloud has partnered with CSRA , a provider of information technology services and solutions to the U.S. federal government customers. Per the new alliance, CSRA will leverage Google Cloud Platform and G Suite products to the IT needs of government customers.
The latest deal is an extension of Google’s ongoing partnership with CSRA. Thanks to the move, Google Cloud’s exposure in the government market is likely to increase. Per the report by Markets and Markets, government cloud market is expected to grow at a CAGR of 13.4% between 2017 and 2022. Further, according to the latest report of P&S Market Research, the cloud market in government sector is expected to reach $49.2 billion by 2023.
The market size of the platform will also expand. Moreover, the deal strengthens the company’s client base and will drive its top line.
CSRA’s product portfolio will also strengthen and will help in acquiring more federal contracts by improvising its key offering of IT solutions. In February 2018, the company signed a million dollar deal with Uniformed Services University of Health Science with the earlier expansion of its partnership with Google.
Coming to the price performance, shares of Alphabet have returned 22.5% over a year, outperforming the industry’s rally of 11.1%.
Google Cloud Gaining Momentum
With the increasing demand for cloud storage services and products Google cloud, which was launched in 2012, is gaining traction in the market.
Last quarter, the company announced that Google Cloud is generating substantial revenues and it brings in more than $1 billion in sales per quarter. Additionally, the company has four million paid customers for G Suite.
The company’s strong focus on innovation of cloud business is driving its clientele. Google has recently provided access to its AutoML tool to cloud customers. The tool helps to build in more complex situations.
With this new partnership, the company has further strengthened its competitive position against the likes of Amazon’s (AMZN - Free Report) Amazon Web Services and Microsoft’s (MSFT - Free Report) Azure.
Strategic Partnerships – Key Catalyst
Strategic partnerships have helped in shaping up the growth trajectory of the cloud platform. The company is experiencing growing clientele aided by its robust product portfolio.
In February 2018, HubSpot partnered with Google Cloud, which provides enhanced data security and speed to its platform.
Last year, Box also partnered with the company to leverage the machine learning capabilities of Google Cloud on its own platform.
In order to innovate the cloud services and product offering, the company teamed up with Nutanix last year for offering hybrid cloud computing to customers.
We believe, the company’s top line will continue to benefit with its growing cloud business.
Currently, Alphabet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks (Strong Buy) here.
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