Alphabet (GOOGL) Google has inked a six-year strategic partnership with Vodafone. The two are coming together to develop a data service system that can be sold to other companies. Dynamo is the name of the data service system that will extract and transport data across different countries, reports the Financial Times (FT).
The two companies are to second 1,000 workers in the US, UK and Spain. According to the Financial Times, the workers are to create the new cloud-based storage and analytic portal that will host the telecom company’s data. Nucleus will be the name of the cloud-based storage portal that will process up to 50 terabytes of data a day within the cloud.
As part of the six-year partnership, Google and Vodafone also intend to sell consultancy services to other multinational businesses. The service will target companies looking to move huge amounts of data to the cloud in the future.
According to the Financial Times, the strategic partnership underscores the growing relationships between telecommunications companies and tech giants. Telecoms are increasingly partnering with tech giants as they look to lessen the burden of having to run their own data centers. The companies are also relying on strategic partnerships to develop artificial intelligence and predictive systems. Telecom companies like Vodafone are a perfect fit for the likes of Google, Microsoft (MSFT), and Amazon (AMZN), given that they have an enormous amount of data. The key to unlocking the huge troughs of data is inking strategic partnerships.
Vodafone has already confirmed plans to transfer data from its servers to Google cloud as part of the partnership.
The inking of the Vodafone strategic partnership follows Google reporting impressive 1Q 2021 financial results. According to Baird Equity Research analyst Colin Sebastian, revenue growth was significantly above expectations, driven by strong consumer retail trends.
“We note continuing strength in shopping/commerce-related search ads, while YouTube strength was a combination of direct response and brand recovery. While Q1 likely benefited from a “perfect storm” of strong e-commerce trends, improving ad prices, easier late-quarter comps, and a rebound in travel/ recreation searches, our estimates move higher for the remainder of the year.”
The analyst has since reiterated a Buy rating on the stock with a $2,700 price target implying 15.23% upside potential to current levels.