Google had its biggest quarter ever for data center spending. Again

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Credit: Google

Google just finished off another record-setting quarter and year for infrastructure spending, according to the company’s earnings report released last week. The web giant spent more than $3.5 billion on “real estate purchases, production equipment, and data center construction” during the fourth quarter of 2014 and nearly $11 billion for the year.

As we have explained many times before, spending on data centers and the gear to fill them is a big part of building a successful web company. When you’re operating on the scale of companies such as [company]Google[/company], [company]Microsoft[/company], [company]Amazon[/company] and even [company]Facebook[/company], better infrastructure (in terms of hardware and software) means a better user experience. When you’re getting into the cloud computing business as Google is — joining Amazon and Microsoft before it — more servers also mean more capacity to handle users’ workloads.

Google Vice President of Infrastructure — and father of the CAP theorem — Eric Brewer will be speaking at our Structure Data conference in March and will share some of the secrets to building the software systems that run across all these servers.

But even among its peers, Google’s capital expenditures are off the chart. Amazon spent just more $1.1 billion in the fourth quarter and just under $4.9 billion for the year. Microsoft, spent nearly $1.5 billion on infrastructure in its second fiscal quarter that ended Dec. 31,  and just under $5.3 billion over its past four quarters. Facebook only spent just over $1.8 billion in 2014 (although it was a 34 percent jump from 2013’s total).

11 Comments

kaelvn

> When you’re getting into the cloud computing business as Google is — joining Amazon and Microsoft before it

I was not aware that Google was not in the “cloud computing business” until now. FYI: Google App Engine was first released April 2008; Azure was launched in 2010.

Derrick Harris

Scale-wise, it’s hard to compare PaaS with IaaS, I think.

ewalsh5

Would agree with that .. besides, Google- despite some hit and misses in recent years, have always been good planners especially given the IoT and Data avalanche we’re about to see.

Justin

Please note that per the conference call, the largest percentage of that spending was in real estate costs and it was indicated that this was for office space as opposed to data center spending.

Derrick Harris

Thanks for pointing that out. The transcript quote is: “you will note that we’ve made real estate purchases in Q4, which helped us relieve both pressure on our work space for current employees but also to accommodate future growth. And this also resulted in a large sequential increase in our real estate capital expenditures this quarter.”

Even it spent $1B on real estate, which would be a lot, it still would have spent $2.5B on data centers and gear — its second-biggest quarter.

But the earnings reports don’t break it down, they just say “the majority on real estate purchases, production equipment and data center construction,” so it’s hard to determine what went where.

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