Google Inc. is working to make cloud computing services more affordable by developing a customized server chip based on the Arm architecture, which could make cloud computing services more affordable. At its Cloud Next conference this week, Google Inc. said this new processor is expected to launch later in 2024.
The Arm architecture-based chip from Google Inc. is aimed at closing the gap with rivals such as Amazon and Microsoft, and those rivals have been using a similar strategy for years. The competition between these tech giants is particularly fierce in the rapidly expanding cloud infrastructure market. Google's parent company, Alphabet, still relies on the advertising business for the majority of its current revenue, accounting for three-quarters of the total. However, the cloud computing business is growing rapidly, with revenues approaching 11% of the parent company's total. The business segment not only includes enterprise productivity applications, but has already become profitable. According to market researcher Gartner, Google's share of the cloud infrastructure market will be 7.5% in 2022, while the combined market share of the two companies, Amazon and Microsoft, will be up to about 62%.
As a leader in the cloud computing market, Amazon Web Services (AWS) launched its Graviton chip based on the Arm architecture back in 2018. According to analysts at Gartner Technology Industry Research, "Nearly all of AWS's services have been migrated and optimized in the Arm ecosystem." Thanks to this, the Graviton chip has successfully attracted business partnerships with a number of well-known companies such as DataDog, Elastic, Snowflake, Sprinklr and others.
Following in the footsteps of AWS, Alibaba also announced a self-developed ARM processor in 2021, while Microsoft followed suit with a similar release in November of the same year. The Arm architecture is not unfamiliar territory for Google Inc. In fact, starting in 2022, Google Inc. has begun selling virtual machines (VMs) services using Arm architecture chips from Oracle-backed startup Ampere. This shows Google's aggressive investment in the Arm architecture space and its strategic placement in the future cloud computing market.
Migrating applications to Arm architecture-based servers is a smart choice for organizations looking to reduce cloud computing costs due to economic pressures. When Arm Holdings filed for a public listing last year, it cited an Amazon statement that claimed the Graviton chips outperformed traditional server instances in terms of price/performance, especially when compared to the "x86" model prevalent in AMD and Intel processors. Graviton's price/performance ratio can be up to 40 percent higher than the "x86" model commonly used in AMD and Intel processors.
Google already uses Arm-based servers to run YouTube ads, BigTable and Spanner databases, and BigQuery data analytics tools on-premise. The company plans to gradually migrate these services over to a cloud-based instance of Arm, known as Axion, when it becomes available, a spokesperson revealed.
Companies such as Datadog and Elastic also plan to adopt Axion services, along with OpenX and Snap, the spokesperson said.
Wider adoption of chips based on the Arm architecture could lead to lower carbon emissions for certain workloads. Virtual slices of physical servers containing Axion chips are up to 60 percent more energy-efficient than virtual machines based on the x86 model, said Thomas Kurian, head of Google's cloud business. The Arm chips, which are popular in smartphones, have an instruction set that is more streamlined than that of the x86 chips typically used in personal computers. These chips can also speed up the running of applications.
Google claims that Axion outperforms the fastest general-purpose Arm architecture virtual machines in the cloud by 30 percent and outperforms their x86-based counterparts by 50 percent.
