Google Cloud IoT Core Is Being Retired; Tech Giant to Focus on Core Cloud Business?

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Another Google product is retiring.

Google Cloud will shut down its IoT Core service a year from now. Customers will have to move to a Google partner to continue using the service. The announcement comes in the form of a text banner notice on the IoT Core site. The text says that IoT Core will be retired on August 16, 2023.

The company also sent out an email to customers. It tells customers that the IoT Core Device Manager APIs will no longer be available. “As of that date, devices will be unable to connect to the Google Cloud IoT Core MQTT and HTTP bridges and existing connections will be shut down. Your current IoT Core Services will remain available through August 15, 2023, unless you terminate your usage of IoT Core at an earlier date,” read the email.

The decision received backlash from some customers. Google has a reputation for confusing products (i.e. the long debate about Hangouts vs. Chat vs. Meet) and abruptly ending services. The company shut down Android Things three years ago and instructed customers to shift to IoT Core. With the impending closure of IoT Core, customers are questioning Google’s commitment to its customers.

In the company’s defense, a Google Cloud spokesperson said that the company believes its partners can better serve the needs of customers. Network partners specialize in IoT applications and, thus, can provide high-quality services to clients. Also, the spokesperson explained that current users will have ample time to migrate to network partners in the year leading to the shutdown.

Google Cloud Platform Earnings

The discontinuation of IoT Core is quite surprising, especially when you consider IoT devices being the wave of the future. The number of connected IoT devices is projected to increase from 12.2 billion in 2021 to 14.4 billion in 2022. It will eventually reach 27 billion by 2027.

Google’s move to let go of its IoT service could be a signal that the company wants to focus on its core cloud services. Currently, Google Cloud is the third largest cloud provider after Amazon and Microsoft, respectively. Though it posted growth in sales for its Q2 earnings report, it also posted sizeable operational losses. The Google Cloud Platform Q2 revenue grew to $6.3 billion. However, its operating loss was $858 million, which is a significant jump from $591 million the previous year.

Offsetting Losses

Overall, the cloud computing market is growing rapidly. Enterprise cloud spending is expected to reach $494.7 billion in 2022, possibly reaching $600 billion by the end of 2023. The COVID-19 pandemic accelerated the transition to the cloud and businesses won’t be coming back to their old ways.

This means the cloud computing market is far from becoming saturated. Investing in this technology could therefore be a crucial strategy for the three largest providers. Google could be willing to let go of its IoT Core service to redirect its resources to its core cloud business.

Moreover, it’s important to look at other business segments in times of an economic slowdown. As Google Cloud said, their network partners have the expertise to better serve current IoT Core customers. If the IoT Core segment is not performing as well as expected, it’s a sensible strategy to nip it in the bud and focus instead on business segments that are more profitable. In the meantime, customers will have to go through the transition while Google deals with the backlash.