Google Reached an Agreement with SpaceX

Google reached a deal with SpaceX and as part of the deal, its cloud unit will supply computing and networking services to Elon Musk’s company. The deal between Google and SpaceX could last for seven years. The tech giant will help SpaceX to deliver internet service through its Starlink satellites.

The company founded by Musk will install stations at Google data centers that connect to SpaceX’s Starlink satellites. The deal represents an important victory for the tech giant as it is working hard to compete with Microsoft and Amazon. It wants to take a share from other tech giants in the fast-growing cloud computing market.

Investors are counting on its nascent cloud business to boost growth in the event if Google’s advertising business slows down. The company’s cloud business delivered only 7% of parent company Alphabet’s total revenue in the first quarter. Its cloud business grew almost 46% year over year, compared with a growth of 32% for Google’s advertising services.

Google and cloud business

Google’s deal with SpaceX is quite unusual for the tech giant or any other cloud provider. It counts on Google’s internal network that connects data centers, rather than simply outsourcing functions like computing power or data storage to these data centers.

Google introduced its own computing service nine years ago. But Google also spent a lot of money assembling a private-fiber network to connect its data centers.

Cloud providers pay a lot of attention to the telecommunications industry, particularly with the ascent of 5G connectivity. In April, Amazon said Dash would use AWS infrastructure to deliver 5G service to consumers.

In the case of Elon Musk’s case, there is no need for cell towers. Instead, users’ devices will communicate with satellites, and then satellites will link up to Google’s data centers. Inside those data centers, users can run applications quickly thanks to Google’s cloud services. They can also send the information on to other companies’ services that are geographically nearby, enabling low latency so there’s minimal lag. Data then goes through the Google data centers to satellites, and then to end customers.

Starlink’s service is quite important for consumers living in places with limited internet access. Also, it is important for businesses and government organizations running projects in remote areas.

Initially, SpaceX will deploy the ground stations at Google’s data centers in the U.S. Nonetheless, SpaceX wants to expand its operations in other countries as well.