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Jan 21, 2020

Google reaches 10-year seal on cloud, travel with Sabre

Google parent Alphabet joins trillion-dollar club

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Google signed a 10-year deal with travel-software provider Sabre Corp., a key win for the search giant in the competitive cloud-computing market.

Sabre will pay Google to handle parts of its information-technology system and for data-analytics tools. Additionally, the companies agreed to collaborate on online travel services, a sign of Google leaning on its massive consumer business to lure enterprise clients.

Sabre and Alphabet Inc.’s Google announced the partnership on Tuesday as a “significant” one, but declined to share financial terms.

The contract validates Google’s recent focus on selling directly to particular industries, such as health and hospitality, Thomas Kurian, the chief executive officer of Google’s cloud unit, said in an interview. The cloud market, where a handful of technology giants rent computing space over the internet, is locked in a pricing war. But Kurian described the Sabre deal as an example of Google pitching its data prowess to companies hunting for operational efficiency.

“Historically, when people look at cloud, they see it purely as about cost efficiency,” he said. “It’s also about giving people better insights for their business.”

Investors are eager for Kurian, an Oracle Corp. veteran who joined Google in 2018, to show progress. Since Google jumped seriously into the cloud business, rivals Amazon.com Inc. and Microsoft Corp. have maintained a steady lead, according to external analysts. Synergy Research Group estimated Google’s cloud share at 9% in the third quarter, about half of Microsoft’s size and a quarter of Amazon’s.

Sabre uses other large cloud providers, but will now place a “very large part” of its IT spending with Google, said Sean Menke, Sabre’s president and CEO. The Texas firm sells data and commerce software to hotels and travel firms. Airline companies use Sabre software to determine pricing and scheduling, for example.

With the new deal, Sabre will tack on services for such clients co-created using “expertise for the consumer side of the business,” according to Kurian. In recent years, Google has used its prime online search real estate to provide its own travel and hotel booking services, angering rivals in the industry. A large portion of Google’s search advertising business comes from travel companies as well.

Menke said the jointly made tools wouldn’t involve Google’s search or ads business. “This could be an operations side of the equation,” he said. He and Kurian didn’t say what those tools would be or when they would arrive.