Google Abandons Cloud Service Project in China

Google has reportedly abandoned plans to offer a major new cloud service in China and other politically sensitive countries due to growing geopolitical tensions and the ongoing Wuhan coronavirus pandemic.

Bloomberg reports that Google has abandoned plans to launch a major cloud service in China and other politically sensitive countries due partly to concerns of geopolitical tensions and the ongoing Wuhan coronavirus pandemic, according to two Google employees familiar with the matter.

In May, Google shut down the cloud initiative codenamed “Isolated Region” which aimed to address nations’ desires to control data with their borders. According to one Google employee, the move was a “massive strategy shift” and the project involved hundreds of workers worldwide.

Google has reportedly been investing heavily in cloud computing as part of its broader efforts to find new sources of growth beyond its massively profitable search advertising business. Google Cloud generated billion in revenue in 2019, a 53 percent increase over the previous year, as it has expanded into the financials and government sectors.

Google’s decision to shut down the Isolated Region project was partly due to global political divisions which have been exacerbated due to the Wuhan coronavirus pandemic, according to the two employees. One employee claimed that geopolitical issues placed demands on the Isolated Region project that Google could not deliver on.

The project would have allowed Google to set up cloud services controlled by a third party, such as a local company or government agency. This would result in a business sequestered from Google’s existing cloud computing services.

A Google spokesperson has denied that the project was shut down over geopolitical concerns or the pandemic, saying that the company is not weighing options to offer the Google Cloud Platform in China. The spokesperson claimed that the project was shelved because “other approaches we were actively pursuing offered better outcomes.”

The spokesperson added: “We have a comprehensive approach to addressing these requirements that covers the governance of data, operational practices and survivability of software. Isolated Region was just one of the paths we explored to address these requirements.”

The spokesperson continued: “What we learned from customer conversations and input from government stakeholders in Europe and elsewhere is that other approaches we were actively pursuing offered better outcomes. Google does not offer and has not offered cloud platform services inside China.”

One of the employees alleged that Google’s plan involved selling cloud services in what Google calls “sovereignty sensitive markets,” such as China and the E.U., where companies offering services that involve the collection and processing of users’ data are subject to strict GDPR laws.

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