Thread by @anthonyc3004

1/ Re $GOOGL $GOOG and their cloud business: V upbeat messaging from a Google Cloud partner interviewed by Jefferies. Have read similar stories elsewhere, that GCP is set to really accelerate this year.

2/ Given Google's still attractive valuation (especially factoring in Other Bets losses and cash on balance sheet, even better if assign meaningful valuation to under-monetised YouTube) and upside from Covid re-opening (travel-related ads 12-15% of ad revenues), the shares…

3/ …remain well-positioned to continue to perform in here in my view, despite having outperformed most of FAANG.

Jefferies hosted the CEO of a premier-level partner of Google Cloud.

4/ Key takes: 1) Outsized growth in '20: bookings grew 2.5x; 2) '21 off to fast start: est. bookings growth ~100%; 3) Cloud consumption in '21 could be faster than bookings as past deals are implemented;

5/ 4) Google Cloud products are technically strong, with BigQuery the highlight; 5) Google bringing in non-Cloud assets to win bigger Cloud deals.

Bookings grew 2.5x in '20 and accelerated each qtr.

6/ After a brief pause last March due to COVID, the expert's firm saw surprisingly fast, accelerated demand. Q2 was "very big", Q3 "huge", and Q4 "even larger".

7/ Momentum was stronger in the GCP (Google Cloud Platform) side of Google Cloud compared to the Workspace (formerly G Suite) side. This Google partner signed multiple 8-figure deals as customers were eager to make large, multi-year commitments to Cloud.

8/ Expects '21 bookings up ~100%. Q1 is off to a fast start, with bookings up ~100% for this firm, and a full-year '21 forecast also calling for ~100% growth. To meet this growth, this firm has been hiring aggressively.

9/ Headcount was up ~80% in '20 and is budgeted to increase by another ~35% in '21.

'21 deal activity more rational than '20.

10/ There was a deal frenzy in '20 as companies rushed into digital transformation and often signed 5-year deals to secure resource commitments, especially on the GCP side.

11/ '21 is looking more rational as even partners sometimes prefer 3-year deals given the large existing backlog.

12/ On the other hand, it seems Workspace bookings may benefit as cos take a more holistic view on user productivity tools after the haphazard approach of buying multiple apps in '20.

'21 GCP consumption to grow even faster than bookings.

13/ While bookings growth in '21 might not repeat '20 levels, it should remain more than robust. Consumption of Cloud resources could grow faster than bookings (their expert estimates >160% vs bookings ~100%), as deals in the backlog get implemented and usage ramps.

14/ Jefferies believe this means Cloud revenues could start catching up with Cloud backlog in '21.

Technically on par with AWS and Azure; adding customer references.

15/ The expert echoed similar comments they've heard from other industry experts in the past, i.e., that the technical superiority of GCP is well understood.

16/ The constraint in breaking down the inertia of enterprise buyers feeling more comfortable with AWS or Azure is the smaller number of reference customers.

17/ That said, Google has made significant progress in the last 12-18 months with high-profile deals such as Ford and Activision.

BigQuery continues to shine. One GCP product that continues to excel is Google's Cloud Data warehouse BigQuery.

18/ The expert's firm has won vs Hadoop, Snowflake, and Teradata. He was confident of winning 80% of bakeoffs vs SNOW thanks to BigQuery's superior performance and lower cost.

Early stages of bringing Google's non-Cloud assets to strategic deals.

19/ Google has unique non-Cloud assets such as Search, Maps, Android, YouTube, and advertising channels. Google is starting to leverage those assets in transformative, strategic deals.