Google Ups Ante Against AMZN, MSFT & IBM In Open-Source Game

Alphabet (NASDAQ:GOOGL) division Google is making every effort to bolster presence in the cloud market.

Google Cloud’s aggressive pursuance of collaborations with open-source software companies in order to enhance managed services offerings is a testament to this.

In sync with its focus, the company announced strategic partnerships with MongoDB (NASDAQ:MDB) and Elastic (NYSE:ESTC) at its cloud conference, Google Cloud Next 2019. By integrating the above-mentioned companies’ fully managed services into its cloud platform, Google will be able to offer commercial support, consolidated billing and single management tool to its customers.

Further, the company has partnered with Redis, DataStax, Neo4j, InfluxData and Confluent which are best known for their efforts toward data-driven open source projects. This move will strengthen Google Cloud’s open-source tools portfolio.

Google Cloud, which is rapidly gaining momentum across customers, is likely to witness a boost in adoption rate with the latest initiative. Open-source services offer better data privacy, security and ability of customization. Most importantly, these services are cheaper compared with proprietary solutions.

Per a report from Research and Markets, the global market for open-source services market is expected to hit $32.9 billion by 2022 at a CAGR of 23.7% between 2018 and 2022.

Moreover, Google’s above-mentioned endeavors are likely to aid its competitive position against the likes of Amazon (NASDAQ:AMZN) , a dominant player in the cloud market, and Microsoft (NASDAQ:MSFT) which is rapidly increasing presence in the space.

Alphabet Inc. Revenue (TTM)

Alphabet Inc. Revenue (TTM) | Alphabet Inc. Quote

How is Amazon, Microsoft & IBM Placed?

Immense growth opportunities in the open-source services market have not only attracted Google but also Amazon, Microsoft and International Business Machines (NYSE:IBM) .

Recently, Amazon Web Services (AWS) unveiled Open Distro for Elasticsearch.

Further, the Zacks Rank #2 (Buy) stock introduced Amazon DocumentDB, a document database service, which is compatible with MongoDB applications and tools. This has strengthened AWS’ database services portfolio, which already comprises a wide range of relational and non-relational database services.

Amazon.com, Inc. Revenue (TTM)

Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote

Meanwhile, Microsoft Azure has a strong open-source community and is taking efforts to enhance its platform with open-source tools and software. This Zacks Rank #3 (Hold) completed the buyout of GitHub during the later part of 2018 and will retain the latter’s open source platform.

Further, its partnership with Red Hat and collaboration with Linux Foundation continue to strengthen its open ecosystem initiatives. Additionally, Microsoft continues to benefit from Pivotal Cloud Foundry, an open source technology that helps it to deliver better customer experience.

Microsoft Corporation Revenue (TTM)

Microsoft Corporation Revenue (TTM) | Microsoft Corporation Quote

Meanwhile, IBM, carrying a Zacks Rank #3, is experiencing solid momentum among enterprise customers with its open-source offerings that provide robust security and scalability.

International Business Machines Corporation Revenue (TTM)

International Business Machines Corporation Revenue (TTM) | International Business Machines Corporation Quote

Does Google Pose a Threat?

Nevertheless, Google’s open-source partnership spree is likely to pose a major challenge to the above-mentioned companies.

Notably, partnerships with the open-source vendors and integration of their software and services into Google Cloud platform will increase its capacity of running open-source platforms. This will further improve its acceptability among the developer community for software innovation.

Additionally, Google’s open-source container orchestration system, Kubernetes, which helps management of digital containers, remains positive.

We note that Google’s strengthening open-source initiatives will continue to boost its position in the cloud computing market which as per a report from MarketsandMarkets, is expected reach $623.3 billion by 2023 at a CAGR of 18% between 2018 and 2023.

Currently, Google-parent Alphabet carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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