alphabet Subsidiary (NASDAQ: toget) Google (NASDAQ: togetL) announced Thursday that it has partnered with Elon Musk’s rocket company SpaceX to power Starlink.
SpaceX has provided Starlink satellites that carry Internet connectivity to Earth as part of a growing constellation of satellites, and SpaceX recently announced that it has over 500,000 orders.
Here are the details of Google’s new contract with SpaceX.
Powering Space Internet
The search engine giant’s Google Cloud unit will help provide network services such as data, cloud services and applications for the Starlink network. SpaceX will begin installing Starlink ground stations in Google’s data centers to enable safer, more reliable, low-latency connections. There are currently over 1,500 Starlink satellites in orbit.
Leveraging the high capacity private network of Google Cloud, Starlink can deliver its satellite internet service almost anywhere, according to Google. The companies said Starlink is ideal for companies that have a wide footprint or operate in rural and remote areas, as traditional Internet Service Providers (ISPs) have historically found it difficult to reach those areas cheaply.
“The combination of Starlink’s high-speed, low-latency broadband with Google’s infrastructure and capabilities provides global businesses with the secure, fast connectivity that today’s businesses expect,” said Gwynne Shotwell, COO of SpaceX, in a statement. “We are proud to partner with Google to bring this access to businesses, public sector organizations and many other global groups.”
The integration between Google Cloud and Starlink is expected to be rolled out in the second half of 2021. No further terms were announced, but the contract could last up to 7 years, according to CNBC.
Two partners are better than one
SpaceX works with several cloud providers Microsoft (NASDAQ: MSFT) announced in October that it would sign a contract with the company to provide Starlink with Azure. It’s unlikely that SpaceX would type Amazon.com (NASDAQ: AMZN) to use Amazon Web Services (AWS) as Elon Musk and Jeff Bezos have had a longstanding rivalry.
Bezos’ rocket company Blue Origin competes directly with SpaceX for commercial launches, and the richest man in the world once tried to poach Shotwell many years ago, according to an upcoming book on Amazon.
The news is a huge win for Google, which is aggressively competing for AWS and growing its cloud business. SpaceX and Google have many other ties as well. Musk has long been friends with Alphabet founders Larry Page and Sergey Brin, and Google invested $ 900 million in SpaceX through its venture arm back in 2015.
Google Cloud has become increasingly important to the financial results of the search engine juggernaut, and Google first published operating losses in Google Cloud in February. The new reporting structure came about about a year after Google first started reporting Google Cloud revenue.
Google Cloud recorded an operating loss of $ 14.6 billion between 2018 and 2020, and the cloud computing business lost another $ 974 million in the first quarter. That was a decrease in operating losses of over $ 1.7 billion in the first quarter of 2020.
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