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Google Cloud Signs Deal With SADA Systems in Enterprise Push

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02/26/2020 | 07:15am EDT

By Agam Shah

Alphabet Inc.'s cloud unit has entered into a multiyear deal with service provider SADA Systems Inc. as it continues its efforts to better engage with enterprise customers.

As part of the deal, Los Angeles-based SADA will commit to resell $500 million in Google Cloud services in the next three years. Services include installation and consulting of call center, hybrid cloud and analytics applications on Google Cloud.

Tuesday's announcement comes as Google Cloud continues its quest to close the gap in the cloud market with leaders Amazon.com Inc. and Microsoft Corp., in part by changing how it works with enterprise customers.

Under the leadership of Thomas Kurian, an Oracle Corp. veteran, Google Cloud over the past year has beefed up its sales team, including hiring executives with experience selling to enterprise customers. Mr. Kurian has helped shift direction toward the specific needs of enterprise customers, focusing efforts on six industries, including financial services and health care.

The deal with SADA represents one step toward gaining market share, said Deepak Mohan, research director for cloud infrastructure services at International Data Corp.

"From Google's perspective, it is especially important because when you think about Amazon and Microsoft, they have partner networks and a lot of hooks into the enterprise space already. [Amazon Web Services] has the benefit of having been in the market for such a long time," Mr. Mohan said.

Google has desirable technology, but needs service providers to improve conversations with customers, said David Smith, an analyst at research and consulting firm Gartner Inc.

"Google, like a lot of companies that are very tech heavy -- they are into building the technology much more so than the customization and the professional services that go along with it," Mr. Smith said.

One enterprise offering Google Cloud could boost from the deal is Anthos, which is cloud technology that lets customers use applications across public and private cloud services. SADA has introduced packages that include installation, workshops and consulting for Anthos environments to enterprise customers.

Google representatives weren't available for comment.

The cloud generated 5.5% of Alphabet sales last year, or $8.9 billion, up from $4.1 billion, or 3.7% of total sales, two years earlier. Alphabet began separately reporting cloud sales in the last quarter.

SADA, founded in 2010, is a Google Cloud service provider with services that include migrating and managing enterprise infrastructure to Google cloud.

"We started the year around 200 employees," said SADA Chief Executive Tony Safoian. "We literally have to hire 90 to 95 people in this calendar year to be able to support the market demand all around the U.S. and Canada."

Write to Agam Shah at agam.shah@wsj.com


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Financials (USD)
Sales 2020 180 B
EBIT 2020 37 381 M
Net income 2020 32 992 M
Finance 2020 129 B
Yield 2020 -
P/E ratio 2020 23,7x
P/E ratio 2021 19,7x
EV / Sales2020 3,73x
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Capitalization 799 B
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