Snap Inc. is one of Googleâ€™s biggest cloud customers. The question is, just how big?
The startup, which has filed paperwork for an IPO, signed a $2 billion contract with Google last week that pays the search giant $400 million a year over the next five years.
At the time, Snapâ€™s business accounted for about 10 percent of Googleâ€™s $400 million cloud business, or about $40 million. If those figures are accurate, Snapâ€™s cloud costs will have increased tenfold in two years.
If Googleâ€™s cloud business jumped by the same rate, that would put revenue from the line of business at $4 billion. Thatâ€™s a big jump, but still a far cry from Amazon Web Servicesâ€™ roughly $10 billion in revenue.
RBC Capital previously reported an estimated run rate revenue of $1 billion for Googleâ€™s cloud business, according to analyst Mark Mahaney.
But if Google hasnâ€™t matched that growth rate, then Snapâ€™s value to the search giant has only increased â€” itâ€™s not only paying more, it accounts for a bigger part of Googleâ€™s cloud sales.
Google declined to comment for this post. If you have any insight, weâ€™d love to chat. This reporter can be reached at email@example.com.
Additional reporting by Kurt Wagner