Q1 2024 Alvopetro Energy Ltd Earnings Call
the caller Stefan Kleberd, our CEO , and Bernd Brinker, our CFO .
Our chief financial officer.
Stefan will begin today call with the highlights of the first quarter. Berndt will then cover the business and financial review before Stefan takes over again for the Outlook 2024. Afterwards, we open up the call for the Q&A session.
Hi everyone, thanks for joining us this morning. Just a couple of administrative points before we begin. We will be recording today's webcast and there will be a replay on our website later on this afternoon.
In addition, just a reminder that everyone is placed in listening only mode for the duration of the presentation. We will have a Q&A session at the end and you can log your any questions that you have through the Q&A button on Zoom. If you've dialed in by phone, you can send your questions to social media at elvopetro.com And we will get to all of those questions at the end of the presentation. Lastly, just a reminder that we do go through some non- GAAP measures throughout the presentation and we do make some forward looking statements. So please read through our cautionary statements and other advisories that are included on the presentation that's on our website.
Please be aware of the cautionary language that is included in our safe harbor statement as in the material that we have distributed today. And with that, I hand over to Stefan.
Thank you very much, Oliver. In the good afternoon, everybody. It's my pleasure to welcome you to our conference call today.
Before I start with the highlights of the first quarter, I would like to congratulate Berndt.
To his contract extension, I'm sure you have read that. Last week, the supervisory board has decided to extend the appointment of Dundas G financial officer until end of June 27.
Great. Thank you, Alison.
I'm very pleased for this decision and dear Bernd, I'm very much looking forward to continuing our excellent working relationship.
So just to start again with our average daily production, I think we presented this quite a few times. A reminder, we came on production in July of 2020. We've added this black dash line to this slide for this purpose just to show you the firm volumes that we had committed with Bahia gas.
The market environment in the first quarter of 24 has not materially changed since the last quarter of 23. We are still facing high interest rates, negative FX development and geopolitical uncertainties.
So you can see when we first came on production, we were almost exactly equal to that amount, and that was equal to our share of the cabaret unit production plateau at the time.
But once again, here delivered organic sales growth and the strong EBDA margin expansion.
As a reminder, we came on production in July of 2020.
that production plateau increased and we also were able to increase our production from the unit.
We've added this black dashed lines. This slide for this purpose is to show you the firm volumes that we had committed with the heat of gas.
We have continued our profitable growth journey.
In our last conference call, we indicated that order intake in the first quarter of 24 will not match last year's record order intake in Q1, which was almost at 1.6 billion euro. The current decline in Q1 is therefore in line with our expectations.
well above those pre-commercialization expectations, and Bahia gas was able to sell all that gas on a flexible basis under our contract.
So you can see when we first came on production we were almost exactly equal to.
Okay.
We'll see.
Sure.
Okay.
Starting in the second quarter of 2023, our partner started nominating for more gas.
Okay.
Bye.
Yeah.
and we've been back bouncing around closer to that Bahia gas firm level since then. Our production, we had previously announced this was, it had increased quite a bit in the fourth quarter and then decreased back down in the first quarter of 2024. And we did, with yesterday's announcement, announced April production of 1,800 barrels of oil equivalent per day. So that was up about 6% from our Q1 average.
And since we are still seeing postponements of orders, order intake declined organically by 9.7%. On a reported basis, this decrease has been at 13.6% because of negative currency translation effects.
Okay.
Right.
Increased.
Well about the commercial update.
Okay.
Yeah.
Yeah.
<unk> basis.
Correct.
Starting in the second quarter of.
However, sales rose organically by 2.7% in line with our full year guidance of 2 to 4% organic sales growth.
2023.
Her nomination.
Mortgage.
Kind of going back.
Closer to that.
For levels.
EBDA before restructuring expenses increased by 5.1%
Our production.
The other thing that has happened, there's been, I think about four months through this period of time where we have had behea gas limiting our production because of some demand disruptions. And you can see that reflected in a couple cases where we're just slightly below the beheia gas firm levels.
Alastair.
It increased quite a bit.
year over year to 181 million euro despite lower sales.
Yeah.
Okay.
Speaker Change: For sure.
Work that we did.
The corresponding EBDA margin rose significantly by 103 basis points from 13.5% in Q123 to 14.5% in Q124.
Sure.
Speaker Change: Yeah.
From a production levels.
Just talk about a couple things. You know, our strategy here is to add more 100% working interest production to our portfolio so that no matter what's happening with production from the unit,
Okay for Q1.
Yes.
Okay.
Months.
Return on capital employed decreased slightly by 0.8 percentage point to 32.3%, which is, however, still, an excellent value.
Great.
Yes.
Okay.
Okay.
we can be up closer to our 3,000 barrel of oil equivalent per day goal. The other thing that's happened and I'll talk about it is we just finished our first redetermination of the unit. So once that becomes effective, our share of unit production of the plateau goes up to about 2,300 barrels of oil equivalent per day.
And disruptions.
Next question please.
Hello, Josh.
Let me now provide you with an update on our share buyback program. As you know, this program amounts to up to 400 million euro and will run until early 25.
Speaker Change: From levels.
Speaker Change: At this time.
Josh: A couple of things.
Josh: Sure.
Working interest production to our portfolio.
The first launch of the program with a volume of 150 million euro was launched on 9th of November and is supposed to run for six months.
Josh: Production from the U S.
So with that re-determination result and with an expanding production base from our other projects, then that will position as well to also increase the firm volumes under our contract so we can increase this black dash line up and increase the guaranteed minimum amount of our cash flow levels.
Josh: Close to 30000 barrels.
Josh: Well equivalent per day.
The other day.
Until 31st of March, we already bought back 3.1 million shares worth 1-11 million euro in total.
Josh: We just finished our.
Josh: Termination of the units.
Josh: Yes.
Josh: Our.
Josh: Production.
Josh: It goes up to 300.
Josh: Perfect.
As of May 7th, though the most up-to-date figures, we have already repurchased 3.8 million shares and spent 135 million euro. This means that we are approaching the end of the first tranche.
So just a little bit on the cabaret unit redetermination process. Our unit operating agreement did contain their somewhat typical redetermination provisions.
Josh: So.
Josh: Thanks resolved and with an expanding production base from our other projects then that will position us well to also increase the firm.
which can happen from time to time. The first of these was completed in April this year, and the result is that our working interest in the unit increases to 56.2% from 49.1%.
Josh: Volumes under our contracts. So we can increase this black dashed line up and increase the guaranteed minimum amount of our cash flow levels.
If there are just 15 million euro left to be spent under the first tranche, it is a
Josh: Yeah.
Josh: So just a little bit on the cavalry unit Redetermination process. Our unit operating agreement did contain theyre somewhat typical REIT redetermination provisions, which can happen from time to time. The first of these was completed.
clear that we have completed this tranche soon and we will, as you might have read, start soon with a second tranche, with a volume of 250 million euro.
Sorry, there's a typo there, increases from 49.1.
What that does is as I mentioned on the previous slide, it increases our production entitlement from the unit to almost 14 million cubic feet a day. We did have GLJ prepare pro former reserves reflecting the redetermined working interest as though it had happened when we completed our reserves at December 31st, 2023. And what that shows is that our 2P volumes increased by 11% up to 9.6 million barrels of oil, equivalent
Josh: April of this year and the result is that our working interest in the unit increases to 56, 2% from $49.
GIA is clearly a sustainability pioneer and we have underpinned this role once more by being the first member of the Ducks Index family to conduct a say on climate vote.
Josh: 1%.
Josh: Sorry, there is a typo there increased from $49 one.
Josh: Sure.
Josh: And.
Josh: What that does is as I had mentioned on the previous slide and increases our production entitlement from a unit to almost 14 million cubic feet a day.
At our general meeting,
which took place last week, we gave our shareholders a say on our climate protection activities. More specifically, we asked them to approve our climate transition plan 2040 as part of a consultative vote.
And our 2PN pvs go up by a similar amount, 11% up to $342 million.
We did have Doj prepare pro forma reserves, reflecting the re determined working interest.
As though it had happened when we completed our reserves at December 31 2023.
Our unit operating agreement does stipulate that expert decisions are to be binding and that the redetermination is to be effective on June 1st and it does provide the right for Alvopetro to operator as a result of that decision.
And the result was outstanding. 98.44% of our shareholders approved our plan. This is an outstanding achievement and confirms that our shareholders support our transformation to a net zero company.
And what that shows is that our <unk> volumes increased by 11% up to $9 6 million barrels of oil equivalent and our <unk> Npv's go up by a similar amount, 11% up to $342 million.
We have noted in our previous disclosures that our partner is disputing this result and because of that, Alvopetra moved to file an emergency arbitration injunction process.
We firmly believe that climate action is not only urgently called for
Our unit operating agreement done stipulate that expert decisions are to be binding.
but also pays off economically.
to seek to make the decision effective as prescribed in our unit agreements.
Josh: The Redetermination is to be effective on June one and it does provide the right for our Petro to operator as a result of that decision.
Only companies that consistently act sustainably can remain competitive in the long term. With that statement, I hand over to them.
I think regardless of that decision in the emergency procedure, it is likely that the dispute will ultimately be heard by a full arbitration panel or tribunal, but our attempt with this emergency process is to make it effective in the interim period here.
Josh: We have noted in our previous disclosures that our partner is disputing.
Thank you, Stefan. Good afternoon, ladies and gentlemen.
Josh: This result, and because of that album Petro move to file a emergency arbitration injunction process to seek to make the decision effective as prescribed in our unit agreements.
On the back of the record order intake in last year's Q1 of almost 1.6 billion euro, the order intake declined as expected year over year by 13.6% to 1.37 billion euro in Q1, 2024.
Just talk about our gas sales agreement with Behea Gas.
Josh: I think regardless of that decision and the emergency procedure. It is likely that the dispute will ultimately be hurt by a full arbitration panel.
Just a recap, our gas sales agreement gets reset semi-annually on February 1st and August 1st of each year. It's based on three different international benchmark prices, which are the gray dash lines that you see here. So this lower one is U.S. Henry Hub prices.
Josh: Tribunal, but our attempt with this emergency processes is to make it effective in the interim period here.
But important to notice that it improved sequentially from the level seen in Q3 and Q4 last year.
Josh: Okay.
Despite a good project pipeline, postponements of orders and here especially large orders continued.
Josh: Just talk about our gas sales agreement with <unk> gas.
This upper one is UK NBP prices and then this dash line that you see through here is Brent Oil equivalent prices. So left of this vertical red dash line is all the historical prices.
Josh: Just to recap our gas sales agreement gets reset semi annually on February one and August one of each year.
Two large orders with the total value of 51 million euro were received in this quarter in comparison to five large orders totaling 126 million euro in Q1, 2023.
And then in the future, this is the forward strip pricing as of May 6 that you see here. So the black line is the output of the formula within our contract. We also have a floor and a ceiling in red and green respectively. Both those do escalate based on US inflation. And you can see we're pretty close to the ceiling based on these forecast prices. It drops just slightly below it on the reset on February . And
Josh: Based on three different international benchmark prices, which are the gray dash lines that you see here. So this lower when as U S. Henry hub prices. This upper one is UK and BP prices and then this dash line that you see through here is Brent oil equivalent prices. So lack of this vertical red Dash line is all of the historic.
21, 24 was another quarter of attractive, profitable growth.
Sales was up by 2.7% year over a year on an organic basis. This was driven by strong organic service sales growth, while organic new machine sales slightly declined.
Josh: Oil prices and then in the future of this is the forward strip pricing as of May six.
EBTA before restructuring margin increased by 103 basis points to 14.5% because of a higher gross profit margin and lower operating costs.
Josh: That you see here so.
of 2025 based on these prices. And the black dash line that you can just barely see here is the price that was used in our reserve report. So we're almost exactly still at that price expectation.
Josh: Black line is the output of the formula within our within our contract. We also have a floor or ceiling in red and green respectively. Both those do escalate based on U S inflation and you can see we're pretty close to the ceiling based on these these forecast prices have dropped just slightly below on the reset on February.
Return on capital employed declined slightly from a very high level of 33.1% to 32.3% since the improvement in EBIT before restructuring expenses was not enough to compensate for the higher capital employees resulting from an increase, especially in networking capital.
So just moving on to results from this first quarter of 2024. We'll talk about our operating net back here on this slide. Reminder that that's a non-gap measure that measures our operating profitability. We express it in per barrel of oil equivalent and that's computed as our realized sales price, which is at the very top of the bar chart.
Josh: 2025 base based on these prices and the Black Dash line that you can just barely see here is that as the price that was used in our reserve report. So we're almost exactly still spill out that price expectation.
Net liquidity decreased year over year by 56 million euro to 218 million euro.
Josh: So just moving on to results from the first quarter of 2024.
And then we subtract off our royalties, which are in orange and our production expenses, which are in gray. And then the green bar is our overall operating profit or operating that back here. So this quarter, our realized sales price in per BEO was $75.94. That was a slight decrease from last quarter. Our royalties were relatively consistent from last quarter. As a percentage of the sales price, it worked out to about 2.4. 7%.
Josh: We will talk about our operating net back here on this slide reminder, that that's a non-GAAP measure that measures our operating profitability. We express it in per barrel of oil equivalent and that's computed adds our realized sales price, which is at the very top of the Bar chart and then we subtract off our royalties mccarran Orange and <unk>.
Looking a bit deeper into the group performance.
Similar to the last quarters, the top line of Q1, I am talking about order intake and sales, was adversely impacted by translational FX effects due to a strong Euro against some of our main currencies.
Speaker Change: <unk> great.
Josh: The Green bar is our overall operating profit our operating netback here so.
Our royalties on natural gas are based on an A&P reference price, which is more closely similar to Henry have a proxy for the value of the raw unprocessed gas. So overall, that's the effective rate is lower than the stated royalty rate on our fields in Brazil. And then production expenses, those were higher at $7.76 this quarter. Most of our production expenses are fixed in nature. So when we have that 21% reduction sales volumes from Q4, our overall cost per BOE did go up. In addition, overall our costs, our operating costs in Q1, we're about 49% of the
Order intake was negatively impacted by 62 million Euro translational FX effect, which, together with a lower amount of orders above 5 million euros, explains most of the year-over-year decline.
Josh: This quarter, our realized sales price.
Josh: <unk> was $75 90, <unk> that was a slight decrease from last quarter, our royalty relatively consistent from last quarter as a percentage of the sales price it worked out to about two 7%.
Food and healthcare technologies has been reporting an organic order intake growth, while the other divisions saw a decline on the back of a very strong, in many cases even record prior year quarter.
Josh: Our our royalties on natural gas or based on an A&P reference price, which means it's more.
Josh: Closely similar to Henry hub.
From a customer industry perspective, food and once again farmer were growing.
Josh: Our proxy for the value.
Josh: Unprocessed gas. So overall effective rate is lower than the standard royalty rate on our fields in Brazil.
When we look at the sequential order intake development, there are two important messages.
First message, order intake in Q1, 2024 was up by more than 100 million euro quarter on quarter.
Josh: And then production expenses those were higher at $7 76.
higher than Q4 that was mainly due to some workovers that we completed in the first quarter. So that gave us a netback this quarter of $66 and $16. And while that's down about $3.53 from last quarter,
Josh: This quarter most of our production expenses are fixed in nature. So when we have that 21% reduction in sales volumes from Q4, our overall cost per BOE did go up in addition, overall our costs.
Second, all order size brackets showed a positive sequential development.
Sales grew organically by 2.7% driven by once again strong organic service sales growth of 9% year over year to which all divisions contributed.
When you look at that relative to our realized price of just under $76, that's a profit margin or netback margin of 87%, which
Josh: Our operating costs in Q1 were about 49000 higher than Q4 that was mainly due to some workovers that we can create completed in the first quarter.
This is now the 15th consecutive quarter with organic service sales growth.
you know, is very high in this industry. When you look at other peers operating in Latin America and North America, this is best in class. And when we layer onto that, this is expressed before income tax.
Josh: So that gave us a net back this quarter at <unk> $66 16, and while that's down about $3 53 from last quarter.
New machine sales, however, have been muted, declining organically by 1.1% year over year in the quarter.
Josh: When you look at that relative to our realized price of just under $76. That's a profit margin or a netback margin of 87%, which.
The divisional performance has been a bit mixed here. While the new machine business at separation in flow, farm and heating and refrigeration technologies has been growing nicely organically, liquid and powder as well as food and healthcare technologies reported a decline.
But our income tax rate in Brazil is just over 15% due to this benefit that we get on virtually all of our profits in Brazil. So overall this helps us to generate very strong funds flow.
Josh: It's very high.
Josh: Industry. When you look at other peers operating in Latin America, and North America. This is best in class and when we layer on to that this is expressed before before income tax.
which we'll go to here. So again, funds flow from operations is basically cash flow from operating activities before changes in working capital. When we compare to Q4, which is the bar on the left-hand side there at 12.4 million, we did see a decrease of about 3.9 million this quarter. Most of that was due to that 21% reduction in sales volumes.
Due to the strong service sales growth, the service sales share stood at 38%, one percentage point higher than last year. This service sales share marks a new record level.
Josh: But our income tax rate in Brazil, let's just over 15% due to the benefit that we got.
Josh: On virtually all of our profit in Brazil. So overall that helps us to generate very strong funds flow.
EBTA before restructuring expenses rose by 9 million euro to 181 million euro resulting in a corresponding year-over-year margin expansion of 103 basis points to 14.5%.
Josh: We'll go to here. So again, thanks, both from operations as is basically cash flow from operating activities before changes in working capital.
Also, the realized price reduction that I talked about on the previous slide. Those production expenses, as I mentioned, were a little bit higher. GNA in Q4 was a bit lower because we had reductions for final 2023 bonus amount. So consequently, GNA this quarter is a little bit higher. Overall, very strong funds flow still at 8.5 million.
Josh: When we compare to Q4, which is that are on the left hand side. There at $12 4 million. We did see a decrease of about $3 9 million. This quarter. Most of that was due to that 21% reduction in sales volumes.
Now, let me continue with the figures for the division separation and flow technologies, which reported solid organic sales growth and significant EBTA margin improvement.
Josh: Also the realized price reduction that I talked about on the previous slide.
On the back of a record order intake in Q1, 2023, the order intake decreased organically by 5.3% year over year.
Moving on to net income, so despite that reduction in our fund flow, we did see a 3.9 million increase in our net income from the 652,000 last quarter to 4.6 million this quarter. Most of that was due to changes in impairment.
Josh: Production expenses as I mentioned, we're a little bit higher G&A in Q4 was a bit lower because we had.
Please bear in mind that the prior year quarter contained a large order of 24 million euro in chemicals for lithium processing equipment.
Josh: Reductions for final 2023 bonus amounts. So consequently, G&A this quarter is a little bit higher overall very strong funds flow cell at $8 5 million.
Therefore, the year-over-year decline is mainly resulting from the customer industry's chemical and dairy processing while food and beverage were growing.
Just under 11 million of impairment losses booked.
Josh: Moving on to net income so despite that reduction in our in our funds flow we.
in Q4 and that is partially offset by foreign exchange losses this period versus gains last quarter and then higher deferred tax last quarter was impacted by you know deferred tax asset recoveries on those impairment losses so overall the quarter of 4.6 million net income.
Josh: We did see at $3 9 million increase in our net income from the 652000 <unk>.
When looking at the order intake development on a reported basis, an adverse translational FX impact of 31 million euro needs to be considered.
Josh: Last quarter to $4 6 million this quarter.
Josh: Most of that was due to changes in impairment we did have.
Organic sales grew by 5.2% year over year driven by solid growth rates in both new machine as well as service sales.
Josh: Just under $11 million of impairment losses booked in Q4.
On the balance sheet side, these green bars here show our progression of working capital through the various quarters since coming on production. As of March 31st, we have over 15 million of working capital, which is current assets, less current liabilities. That includes cash of just under 17.5 million. And a reminder that we've fully repaid our credit facility back in September of 2022 and have been debt-free since then. And so we are well positioned with a very strong balance sheet going forward for our plans.
Josh: And that is partially offset by foreign exchange losses this period versus gains.
The organic service sales growth would have been however higher if we hadn't had a change of a logistics provider as part of our move into a new logistics center.
Josh: Last quarter, and then higher deferred tax.
Josh: Last quarter was impacted by deferred tax asset recoveries on those impairment losses. So overall.
Problems that occurred during this change were caused by our partner and led to a temporarily slower service sales recognition in Q1 with postponements to the coming quarters, predominantly to the second quarter 2024.
Josh: Quarter, $4 6 million net income.
Josh: On the balance sheet side. These are these green bars here show our progression of working capital through the various quarters coming on production as of March 31st we have over $15 million of working capital, which is current assets less current liabilities that includes cash of just under 2017.
The order intake in service, however, has been growing year over year. As a result of the temporarily lower service sales growth, the service sales share declined on a very high level by 1.5 percentage points to 42% in the quarter.
All right, thank you, Alison. So we did previously announce our Q1 dividend. We did reduce that based on the production decrease that we talked about and the anticipated reduction in cash flow.
Josh: $5 million and a reminder, that we fully repaid our credit facility back in September of 2022 and have been debt free. Since then so we are well positioned with a very strong balance sheet.
or funds flow from operations.
consistent with our longstanding policy to return roughly half of our cash flows to stakeholders and reinvest the other half in organic growth.
This is expected to positively reverse already in Q2, 2024.
Josh: Going forward our plan.
Speaker Change: Alright, well. Thank you Allison So we did previously announced our Q1 dividend.
In total, since we started the dividend in the third quarter of 2021, we paid out over $40 million US or the equivalent of $1.13 per share US of cumulative dividends to shareholders.
The profitability impact resulting from the lower service sales share has been offset by a scheduled sale of a property in the United States.
Speaker Change: We did reduce that based on the production decrease that we talked about it and we anticipate a reduction in cash flow.
Speaker Change: Our funds flow from operations.
As a result, EVTA before restructuring expenses increased by 2 million to 96 million euro, and the corresponding EBTA margin improved further on a high level by 1.5 percentage points to 27%.
Speaker Change: Consistent with our longstanding policy to return roughly half of our cash flows to stakeholders and reinvest the other half in organic growth.
Based on our current share price, that 9 cent dividend translates and we yield just over 10% right now.
Speaker Change: In total since we started the dividend in the third quarter of 2021.
So, you know, this disciplined capital allocation model that we talk about, again, the idea is to reinvest half of our cash flows in organic growth and return the other half to stakeholders.
Speaker Change: We paid out over $40 million U S or the equivalent of $1 13 per share U S of cumulative dividends to shareholders.
Let's move on to liquid and powder technologies.
Order intake for the quarter was down organically by 21.6% compared to a strong prior year's quarter, mainly driven by a decline in orders above 15 million euro.
This chart here, all the black dots and the green line that you see here is the funds flow from operations that we've had quarter over quarter. Allison walked you through the 8.5 million that we generated this quarter.
Speaker Change: Based on our current share price at 99, 9%.
Josh: Dividend translates into a yield just over 10% right now.
Josh: Yeah.
Josh: So.
Liquid and Powder Technologies has received one large order of 31 million euro from the customer industry beverage this quarter versus four large orders of 102 million euro in Q1, 2023.
Josh: This disciplined capital allocation model that we talk about again.
And then each of the bars just shows where we've invested that money. So a reminder at the very beginning.
Josh: As to reinvest half of our cash flows and organic growth in recurring the other half to stakeholders through this chart here all of the black dots in the Green line that you see here is the funds flow from operations that we've had quarter over quarter. Alison walked you through the $8 $5 million that we generated this quarter.
We pre-invested in the cabaret unit to get that on production. So we had very little capital requirements in yellow, and almost all the cash flow went to an accelerated repayment of our outstanding debt.
While the customer industry's food and farmer showed a positive development in this quarter, all other industries reported a decline.
We did buy back some shares in the third quarter and then we also of 2021 and then we also started the dividend in the third quarter of 2021. So the dark green wedge that you see there.
Josh: In each of the borrowers just shows where we've invested that money. So a reminder, at the very beginning.
Important to notice that the order intake has stabilized sequentially being slightly up from the level in Q4 last year.
Josh: We pre invested in our in the camera unit to get that our production. So we had very little capital requirements in yellow and almost all of the cash flow went to an accelerated repayment of our outstanding debt.
And then more recently you have seen us investing in capital expenditures, which are in yellow. In total, if you look at that since we came on production from the Cabaret unit to the end of the first quarter here, you can see this has been quite balanced.
Sales declined slightly by 0.7% year over year on an organic basis.
Service sales continued its strong growth trajectory of the previous quarters with an outstanding 15.7% year-over-year organic growth rate, marking now the fifth quarter in a row with double-digit service growth rates.
Josh: Did buyback some shares in the third quarter and then we also have 2021 and then we also started the dividend in the third quarter of 2021. So the dark Green works that you see there and then more recently you have seen us investing in capital expenditures, which are in yellow in total if you look at that since we came.
We've had 48% of our cash flows, which have totaled now $139 million.
About half of that has gone back to stakeholders in the various forms of either the capital lease on our gas plant.
At the same time, organic new machine sales decreased by 5.7%.
The lower new machine sales results from a decline in the order intake in the second half of 2023 as well as in the first three months of 2024.
Josh: On production from from the Cavalry unit to the end of the first quarter here you can see this has been quite balanced.
debt and interest payments and the vast majority of that's in the form of dividends and about 43% has been reinvested. The rest of it, this is the blank portion of the pie here. 9% of that's gone to build the cash and working capital position that Allison walked you through a couple slides ago.
Josh: Had 48% of our cash flows which have total now.
Due to the strong service sales growth, the service sales share increased by 3.6 percentage points to a record level of 26.9% in the quarter.
Josh: $139 million.
Josh: Half of that has gone back to stakeholders in the various forms of use of the capital lease on our gas plant debt and interest payments and the vast majority of that's in the form of dividends and.
So,
Just to talk about our organic growth plan going forward, again, our near-term objective is to be at 18 million cubic feet a day or 3,000 barrels of oil approval per day.
EBTA before restructuring expenses decreased by 4 million euro year over year to 26 million euro resulting in a corresponding EBTA margin of 6.8 percent down from 7.8 percent in Q1 2023.
Josh: And about 43% has been reinvested the rest of it.
From our core business, we did expand the gas plant back in the middle part of 2020.
Josh: A portion of the pie here, 90% of that is going to build the cash and working capital position that Allison will walk you through a couple slides ago.
The cabaret unit has been performing quite well. We expanded the productive capacity of that along with our partner. And then the biggest part of this is, you know, because of the redetermination, result, our share of the unit production is expected to increase here once that becomes effective.
Slightly higher gross profit resulting from the improved service sales share has not been enough to compensate for the increase in operating costs.
Josh: So just to talk about our organic growth plan going forward again, our near term objective is to be at 80 million cubic feet, a day or 3000 barrels of oil equivalent per day.
Continuing with food and healthcare technologies.
Josh: From our core business.
Josh: We did expand the gas plant back in the middle part of 2022 days to a cap rate unit has been performing quite well, we expanded the productive capacity along with our partner and then the biggest part of this is because of the Redetermination result, our share of the unit production.
With respect to our Merica Chitou asset, which sits so sorry, the cabaret unit sits right here, the gas flows down this pipeline to our gas processing facility that sits to the west.
Order intake for the quarter was up in organic as well as in reported terms, which is a very encouraging development.
The year-over-year growth was driven by orders below 1 million euro and a large order of 20 million euro in the customer industry farmer.
Our main growth acreage sets immediately north of the Cabaret unit. It's all 100% working interest. We call it Murakutu. We've got three existing wells. They're all pipeline connected back to the unit here. We're just in the process of doing optimization projects on each of those three wells.
Josh: As expected to increase year once that becomes effective.
Not surprisingly, the custom industry farmer showed a positive development this year while the food industry reported a decline.
Josh: With respect to our Merck, a Q2 asset, which so sorry, the cavalry unit sits right here the gas flows down the pipeline to our gas processing facilities. It sits to the west our main growth acreage fits and immediately north of the cap or a unit.
Sales decreased organically by 2.6% year over year, despite a very strong organic service sales growth of 8.8%.
We just completed a chemical treatment program on our 197 one well and that well is in the process of being brought on production now.
The service business has been growing organically by 15 quarters in a row now, raising the service share from 27% in Q3 2020 to 36% in the first quarter of 2024.
Josh: All 100% working interest we call it <unk> <unk>.
The re-completion that we've got planned in the 183 one well is expected to start here in the next couple of weeks. And then following that activity, we'll do the final completion in our 183A3 well, targeting a number of the carousou zones that we encountered in that well. And then the idea is to take that recipe that we have and then apply that to a much broader development plan. It's a multi-year, multi-zone development plan covering this entire asset.
Josh: Got three existing wells Theyre, all pipeline connected back to the unit here. We're just in the process of doing optimization projects at each of those three wells. So.
Josh: We just completed a chemical treatment program on our 197 to one well on that wells on in the process of.
The new machine sales declined organically by 8.1% resulting from the lower order intake in freezers, as well as in processing lines for the food industry in the second half of 2023.
Josh: Being brought on production now the re completion.
Josh: Planned in the 183, one well.
Josh: As expected start here in the next couple of weeks and then following that activity will do the final completion in our what 80 383, well targeting a number of the <unk> that we encounter in that well.
As you know, the profitability of food and healthcare technologies had been impacted by the execution of insufficiently priced projects in the last quarters, and as expected, we are still seeing a small impact in Q1.
We have had this asset assessed by GLJ, our independent reserve evaluator, and they've assigned a combination of 2P reserves and risk best estimate and contingent and prospective resource to this of
Josh: So and then the idea is to take that recipe that we have.
EBITDA before restructuring expenses decreased by 3 million euro year over year and the respective margin dropped from 10.4% in Q1, 2023 to 9.5% in the quarter.
4.6, 5.4, and 9.6 million barrels of oil equivalents, respectively. So there's a lot of growth potential for us here. We can execute this on an organic basis, and we're looking forward to migrating this this resource into production and cash flows over the coming years.
Josh: And apply that to a much broader development plan, it's a multiyear multi zone development plan covering this entire asset.
Josh: We have had this asset assessed by AGL, Jay our independent reserve evaluators.
However, when we're looking at it sequentially, the profitability has improved continuously since the second quarter of 2023.
Josh: And they are assigned the combination of <unk> reserves and risks best estimated contingent and Perm.
So just to conclude,
Josh: Spectrum resource to this.
Josh: 465, 4% to $9 6 million barrels of oil equivalent respectively.
To re-summarize this, I think I've said this before, but I do firmly believe Alpo Petro continues to offer a very attractive investment proposition no matter what your focus is.
While the EBTA margin has been as low as 6.1% in Q2, 2023,
Josh: So theres a lot of growth potential for us here, we can execute this on an organic basis on that basis, and we're looking forward to migrating this resource into production and cash flows over the coming years.
Q3 reported a quarter on quarter improvements to 6.8% followed by 7.2% in Q4, and now 9.5% in the first quarter of 2024.
I think our results speak for themselves, but we're generating industry leading operating margins off the back of a very attractive gas prices. We've got a clean balance sheet with extremely strong free cash flow generation capacity that helps
Josh: Okay.
Speaker Change: So just to conclude.
Speaker Change: To re summarize this.
As stated in previous conference calls, we are optimistic to bring the business back on track within the second half of 2024.
Speaker Change: I think I've said this before but I do firmly believe abo petrol continues to offer a very attractive investment proposition no matter what your focus is.
really underpin this balanced reinvestment and stakeholder return model that we've got.
For value investors, we're trading at about one-third of our 2PNABs. For yield investors, the dividend represents about a 10% dividend yield with dividends paid quarterly in US dollars.
and we are targeting for the full year and EBTA margin between 9.5 and 11.5 percent. A strong improvement compared to the 7.6 percent in financial year 2023.
Speaker Change: I think our results speak for themselves, but we're we're generating industry, leading operating margins off the back of a very attractive gas prices, we've got a clean balance sheet with extremely strong free cash flow generation capacity that helps.
And for growth investors, you know, we certainly have a very exciting and organically funded capital program that has a lot of potential, especially when you compare it to our current enterprise value.
Speaker Change: Really underpin this balanced reinvestment and stakeholder return model that we've got for value investors were trading at about one third of our <unk> for yield investors. The dividend represents about a 10% dividend yield with dividends paid quarterly in U S dollars and for growth invest.
Moving to farm technologies.
The first quarter of the year is showing strong organic sales generation and significant margin, EVTA margin expansion. But let me give you some details on Q1 here.
So with that, I'm going to stop sharing the presentation and we'll turn it over to a question and answer.
As you might remember, we have stated several times that the environment for our dairy farming business is quite mixed. On the one hand, the farmers are facing higher financing costs, but on the other hand, there is this unbroken trend for optimization and consolidation.
Okay, the first question that we have is, are you inclined to exercise your right to operate cabaret? Are there clear advantages to that?
Speaker Change: <unk>.
Speaker Change: We certainly have a very exciting and organically funded capital program that has a lot of potential, especially when you compare it to our current enterprise value.
Yes, you know, with a working interest over 50% our preference would be to operate the field. There is a development plan that we've agreed to with our partner. We'd like to see that executed on an expedited basis. There's five wells planned there. And yeah, that's our intention.
Speaker Change: So with that.
On the back of a record level for orders in the prior year quarter, order intake declined organically by 14.7% year over year.
Speaker Change: Stop sharing the presentation and we'll turn it over to.
Speaker Change: A question and answer.
Speaker Change: Okay.
Also, sequentially, the typical quarter on quarter improvement from Q4 to Q1 has been less pronounced as the years before, and the market sentiment is still affected by the uncertainty, mainly caused by high interest rates and lack of subsidies, which are now expected for the second half of 2024, but also by the very wet weather conditions in large parts.
Speaker Change: Okay. The first question that we have is are you inclined to exercise your right to operate cavalry are there clear advantages to that.
Can you give an update on how you see the Brazilian gas market demand and more specifically the region you are working in? Has there been a significant impact from strong renewable power generation and how much of this is structural versus transitory?
Speaker Change: Yes.
Speaker Change: Working interest over 50% of our preference would be to operate the field. There is a development plan that we've agreed to with our partner we'd like to see that executed on an expedited basis Theres five wells planned there.
Yeah, so a couple parts there. So we'll talk about Bahia gas. One of the things that they are due to they have, you know, I think up to 10 suppliers of natural gas now. So they've been, you know,
Speaker Change: And yes, that's our attention.
of Europe .
In terms of products, farm technologies had slight order intake growth year over year in the service business, while new machine order intake declined, especially in manure and automated milking carousels due to the lack of larger orders.
Speaker Change: Can you give an update on how you see the Brazilian gas market demand and more specifically the region. You are working in has there been a significant impact from strong renewable power generation and how much of this is structural versus transitory.
one of the leaders probably in diversifying their portfolio of gas as the gas market opened up in Brazil. And then they've got hundreds or thousands of customers that consume the gas. I think there has been, you know, probably...
Speaker Change: Yes, so a couple of parts. There. So we will talk about Bahia gas one of the things that they are do they have I think up to 10 suppliers of natural gas now so they had been.
When looking at the order intake development on a reported basis, an adverse translational ethics impact of 70 million euro needs to be considered.
close to 8 or 9% impact on demand that's happened to their demand base. It's otherwise pretty stable. They are impacted from time to time due to plant turnarounds or temporary disruptions within their
Sales has been virtually unchanged in reported terms, but increased organically by 10.4% year over year.
Speaker Change: Yeah.
Speaker Change: One of the leaders probably in.
Speaker Change: Diversifying their portfolio of gas as the gas market opened up in Brazil, and then they've got hundreds of thousands of customers that consume the gas.
The strong organic sales growth has been driven by both outstanding service sales growths of 14% and strong new machine sales growths of 7%.
Speaker Change: There has been.
within their customer base.
Speaker Change: You'll probably.
The other thing what they did is they basically committed to all their supply on a firm basis for both 2023 and 2024 quite far in advance.
Speaker Change: Close to eight or 9% impact on demand that's happened.
The service share increased further on a high level by 0.3 percentage points to 47.8%.
Speaker Change: Sure.
Speaker Change: Their demand basis, otherwise pretty stable they are impacted from time to time.
gross profit rose significantly due to the consistent implementation of price increases in the last month and a higher service sales share.
So, especially for this year, it reduces their ability to kind of manage any of those demand decreases that I talked about. But for 2025,
Speaker Change: Due to plant turnarounds or temporary disruptions within there.
Speaker Change: Within their customer base.
The increase in gross profit over compensated higher operating costs resulting in an EBDA improvement of 4 million euro to 27 million euro in the quarter.
Speaker Change: The other thing what they did is they basically committed to all of their supply on a firm basis for both 2023 and 2024 quite far in advance so.
They've completely, you know, they're going through a process now to contract all that firm supplies. So they'll be able to make those adjustments and we have the ability, you know, the ideal thing for us would be to increase our firm volumes under our contract and they're still
The corresponding EVDA margin increased significantly by 198 basis points from 12.5% in Q1, 20203 to 14.5% in Q1 2024.
Speaker Change: Partially for this year it reduces their ability to kind of manage any of those.
keen to be prioritizing alveo petro gas, partly because we're directly connected into their distribution network. So it helps improve our net realized price, but it also helps reduce the absolute cost of the gas to the end consumer.
Speaker Change: Demand decreases that I talked about but for 2025.
Speaker Change: Completely.
Speaker Change: They're going through a process now to contract all of that firm supply so.
Finally, let us turn to heating and refrigeration technologies. This division delivered again strong organic sales growth and a significant EBTA improvement.
Speaker Change: And there'll be able to make those adjustments and we have the ability.
Speaker Change: The ideal thing for us would be to increase our firm volumes under our contract and they are still quite keen to be prioritizing elbow petrol gas, partly because were directly.
The second part of your question is, you know, renewables, yes, Brazil has been, you know, quite aggressive on adding
Also, heating and refrigeration technologies faced a high comparison base for order intake in the first quarter of the year because the prior year quarter had an unusual high volume of orders above 5 million euro.
renewable electrical generation. I would say that demand wedge is kind of treated separately so that, you know, the natural gas component or competition for that would be in thermal power plants.
Speaker Change: Ah connected into their distribution network so it.
Speaker Change: It helps improve our net realized price, but it also helps reduce the absolute cost of the gas to the end consumer.
The year-over-year organic order intake declined of 11.6% was purely driven by the reduction of these large orders.
Speaker Change: Yeah.
Speaker Change: The second part of your question is renewables, yes, Brazil has been.
And I would say, you know, Brazil generates a lot of their electricity through either hydroelectric or renewables. So, you know, there certainly has been an impact on the thermal power side with respect to how often those plants are dispatched because of that renewable energy.
Base orders, that means orders below 5 million euro, have been up year over year. In terms of customer industries, food had in good demand while most other industries reported a decline.
Speaker Change: Quite aggressive one on adding renewable electrical generation.
Speaker Change: I would say that demand, where it just kind of treated separately so that.
Speaker Change: The natural gas component or a competition for that would be in thermal power plants.
Sales continued its growth trajectory and the division reported for the 11th quarter in a row a year-over-year organic growth.
Can you give an update on expected CAP-X for 2024 and how this has changed from guidance in the 2023 annual filings?
Speaker Change: And I would say, Brazil generates a lot of their electricity through either hydroelectric for renewables.
A 5.8% organic growth rate was driven by both in solid new machine sales growth rate of 4.2% and a strong service sales growth rate of 8.4%.
So I can do that. Great. We don't really give guidance on the overall CAP-X, but we do go through the specific projects we have in detail within the MD&A that we file. So nothing, there has been no material changes since the
Speaker Change: So.
Speaker Change: There certainly has been an impact on the thermal power side with respect to how often those plants are dispatched because of that renewable energy.
Since the service business was growing stronger, the service sales share increased by 82 basis points to 39.2%.
Speaker Change: Can you give an update on expected capex for 2024, and how that can change from guidance in the 2023 annual filings.
Q4 filing in on March 19th so our main projects
EBTA rose to 19 million euro and the according margin improved significantly from 11.8% in the Q1, 2023 to now 13.4% this quarter.
Speaker Change: So I can do that and we don't really give guidance on the overall capex that we do go through the spin.
On the Merrick-2-2 field, we have the projects
on the two wells 183-1, the rec completions on 183-1 and 183A3, as well as
Speaker Change: Specific projects, we have in detail in the MD&A that we filed.
Speaker Change: So nothing there has been no material changes since the.
Cross-profit was up year over year due to the higher volume, positive mix and margin effects which overcompensated the increase in operating costs.
planned on 1971 to optimize production there. So those total for the year, about 4.2 million. We did have some spending in Q1, so about 3.7 million remaining for the rest of the year. At Cabaret, we have this five well development planned at the unit that Corey referred to. That'll go 2024 into 2025. At our new working interest,
Speaker Change: Q4 filing on March 19th so our main projects.
Speaker Change: America Q2 feels we have the projects.
Speaker Change: The <unk> hundred one the re completions on 183, one in 180 383.
Closing the divisional chapter now with the overview on the EBTA growth contribution.
Speaker Change: As well as.
There are two important messages.
Speaker Change: Our plan.
We have been able to increase our EBTA before restructuring expenses by 9 million euro.
Speaker Change: 197 wanted to optimize production there.
That's estimated at 7.1 million with 4.2 million in 2024. We have the facilities upgrade plan, that's 100% Alvo Petro. That totals 3.2 million. There was about
Speaker Change: So those total for the year about $4 2 million. We did have some spending in Q1, so about $3 $7 million remaining for the rest of the year.
The positive EBTA growth contribution of separation and flow, farm and heating and refrigeration technologies overcompensated the profitability decline of the two other divisions.
Speaker Change: At Catarina, we have this five well development planned at the at the unit that Corey referred to that will go in.
This shows once again the resilience and strength of our business model due to our product diversification.
There was 1.4 million in Q1, so approximately 1.8, 1.9 million remaining on that. And then on our exploration blocks, we do have a stimulation planned on one well there, and that's about half a million. So those are the main things with respect to the
Speaker Change: 2024, and 2025 at our new working interest.
Let me give you some additional background information on the positive EB-50 growth contribution from the other and consolidation line.
Speaker Change: That's estimated at $7 1 million with $4 2 million in 2024, we have the facilities upgrade plan, that's 100% alcohol Petro that totals $3 2 million there was about <unk>.
The year-over-year change in EBTA is mainly attributable to the allocation of centrally incurred expenses in line with causation, leading to a higher cost burden on the divisions.
unit and the redetermination there, you know, once that's finalized and effective, there is some historical catch-up on the CAP-X at the new working interest. So that would be added on top of that. That's estimated at 1.2 million right now.
Speaker Change: Was $1 4 million in Q1, so approximately one.
Speaker Change: 181 $9 million remaining on that and then on our exploration blocks. We do you have a stimulation planned on <unk>.
And the second important message is that translational FX has been a drag on our reported EBTA. It has lowered our EBTA by 6 million euro in the quarter.
Next question. Given the continued strong free cash flow, large cash position, decline in share price, and the cut to the dividend, what are your thoughts on buybacks?
Speaker Change: While there and that's about half a million. So those are the main things with respect to the unit and the Redetermination there once that finalized and effective there is some historical catch up on the Capex at the new working interest so.
Excluding this FX translational effect, our EBDA would have been improved, would have improved by 14 million euro from 172 million euro in Q1, 2023, 186 million euro in Q1, 2024.
Yeah, we've talked about this a lot. I think, you know, this is something that the board, especially at these valuations, will be looking at as we make decisions on the stakeholder return portion of the pie.
Speaker Change: That would be added on top of that that's estimated at $1 2 million right now.
Speaker Change:
Speaker Change: Next question given the continued strong free cash flow large cash position decline in share price and the cut to the dividend what are your thoughts on buybacks.
Coming now to another important topic, which is net working capital.
And particularly, I think, as we increase the cash flow back up, you know, I think it's a good opportunity to reevaluate that.
As in the last years, the first quarter is showing the typical seasonal uptick in networking capital from year-end.
So.
Speaker Change: Yes, we've talked about this a lot I think this is something that the board, especially at these valuations will be looking at as we make decisions on the stakeholder return a portion of the pie.
Ultimately it's up to the board and it's something we'll be looking at in the context of dividends and or buybacks.
This quarter on quarter increase is driven by a reduction in trade payables as well as a slight increase in inventories.
Okay, and I just checked the social media email and there's no questions there and I think that is the conclusion of the questions that we have through the Zoom portal as well.
Speaker Change: And particularly I think.
In a year-over-year comparison, networking capital increased by 88 million euro to 457 million euro, despite a significant reduction in inventories of 64 million euro.
Speaker Change: As we increase the cash flow back up.
Speaker Change: It's a good opportunity to reevaluate that.
All right, thank you Allison. Thank you for everyone joining today. If you didn't have a chance to ask your question, as always feel free to reach out to myself or Allison and we're looking forward to updating you on the next call. Thank you very much. Thank you.
Speaker Change: Ultimately, it's up to the board and that's something we'll be looking at in the context of dividends and or buybacks.
Trade receivables have increased, which is not surprising to see as we are facing a tougher economic environment for receivables management due to the higher interest rates.
Speaker Change: Okay, and I, just checked the social media email and Theres No question, there and I think that is the conclusion of the questions that we have through the zoom portal as well.
The decrease of trade payables needs to be seen in connection with the reduction of inventories.
Speaker Change: Alright. Thank you Allison. Thank you for everyone. Joining today, if you didn't have a chance to ask your questions as always feel free to reach out to myself or Alison.
In Q1, 2023, the inventory level was on a high level due to the creation of risk buffers to mitigate the potential risk of material shortages.
Hi, my name is Sendeep, a developer advocate on the Google Cloud Platform. Welcome to the Google Data Center at the Dallas, Oregon. Take a look around.
Speaker Change: We're looking forward to updating you on our next call. Thank you very much. Thank you.
The subsequent reduction of inventory, especially at liquid and powder and food and healthcare technologies, led to a decrease of trade payables between Q1, 2023 and Q1 2024.
Before we go inside, we need to make sure that we have the appropriate security clearance. Most Google employees can't even get in here. So, let's go on a special behind-the-scenes tour.
Like in the previous years, free cash flow has been negative in the first quarter of the year. But let's have a look at the details.
I'm here with NOAA from the Site Reliability Engineering Team. Noah, can you tell us a little bit more about the SRE role at Google? Yeah, SRE is right and maintain the software systems designed to keep our services running. So what happens if one of these systems goes down?
Operating cash flow was negative 42 million euro, which can be explained by the following factors.
Firstly, the networking capital outflow because of the quarter and quarter build up. Secondly, the 82 million euro outflow in others.
We've designed our systems from the ground up to be able to handle any unexpected failures that might occur. We have highly redundant power, networking, and serving domains, so that even if we do lose an entire cluster, we're able to redirect those workloads and live migrate data in order to minimize any impact.
This position contained the outflow of bonus payments for fiscal year 2023, which was, as you all know, again, a very successful year.
In addition, we have a team of S3s on-call 24-7 that can tackle any problems that might arise. Thanks, Noah. Now we learn more about the systems that manage our fleet at Google. Let's take a deeper look at the data center infrastructure itself.
In addition, we paid out the second and final trance of the inflation compensation payment to all employees in Germany, which accounted for roughly 10 million euro.
The Cappex-related outflow of 27 million euro has been rather low in comparison to our full year 2024 guidance of around 260 million euro. So the step-up in Cappex will be seen in the coming quarters.
Welcome inside. Before we can continue further, we need to go through the biometric iron scan and circle lock. These only allow one person in at a time and require dual identification to continue further. I'll see you on the other side.
As a result, free cash flow stands at minus 57 million euro, leading to a net cash flow of minus 78 million euro after deducting lease payments and interests paid.
Welcome to the Data Center floor. As you can tell, we have a lot of servers, and this is a single cluster and a single floor in a single building. Managing all these servers on a global scale is quite a challenge. To utilize our fleet, we use tools such as Borg, Colossus, and Standard. You may be familiar with similar tools, such as Kubernetes, mobile storage, and BigQuery. These tools allow Google engineers and cloud customers for easily managed infrastructure, allowing everyone to both innovative and scalable applications. Here at Google,
The negative net cash flow in combination with the cash out for our ongoing share buyback program reduced the net cash position from 371 million euro at the end of Q4 2023 to now 218 million euro at the end of Q1 2024.
Hence, the typical seasonal net cash reduction in the first quarter of the year has been more pronounced this year due to the additional cash outflow for the share buyback program.
With that, I hand back to Stefan for the Outlook.
Thank you, Bernd. Let me now come to our outlook for the fiscal year 24.
A lot of our infrastructure is custom-made. This gives us the flexibility and performance we need to run all of our services at scale. Oh, hey, it's Virginia, one of our network engineers. Hey, Cindy. Virginia, what are you working on today? Today I'm working on a hardware option to expand the data center network to deploy additional machines in this building. Our lead is constantly growing to support new capacity for Google products and our cloud customers. That sounds like a lot of work to be constantly adding capacity around the globe. Well, we designed our network so that this kind of capacity growth isn't very hard. Jupyter, our current data center network technology, is a hierarchical design using software-defined networking principles. So, just like with our server, we abstracted away the specific details of our network and just managed them like they're software.
After a solid start into the year with further organic sales growth and excellent margin development, we confirm our full year 24 guidance. Organic sales growth of between 2% and 4%
an EBDA margin expansion to a level between 14.5 and 14.8 percent and a return on capital employed in the range of 29 to 34 percent.
In our last conference call, I mentioned that we will hold our next capital market stay on 1st and 2nd of October . Let me now share some more details with you on the evening of October 1st.
and data. Abstracting seems to be a common theme here at Google. I've also noticed a lot of hardware running in our data center. That's right. A single building can support 75,000 machines and carry over one petabit per second of bandwidth, which is actually more than on the entire internet. This allows us to reliably access storage and compute resources with low latency and high throughput. So how is this data center connected to all of the other data centers around the globe? Well, Google runs V4, our own private, highly efficient network. This is actually growing faster than our internet-based network. It connects all our data centers together and allows services to efficiently access resources in any location. Nice. I finally know what all this Google fiber is really used for.
We will invite you to an informal dinner and Ron's gastro bar. In Amsterdam, Ron's gastro bar is known for its culinary entrepreneurial dishes.
And we are looking forward to spending a nice evening with you there.
Amongst other things, we will serve new food, which is produced by our customers.
The next day will consist of two parts first presentations on strategic topics, helped by my colleagues and myself.
in the morning and second in the afternoon a site visit at our customer Innocent in Rotterdam.
Thank you for. Thank you, Virginia. No problem. So now you've seen all the compute and networking horsepower required to run your workloads in the cloud. Let's take a look at where your data is safely and securely stored. Go! Whether you're querying kary bytes of data on quick query or storing petabytes in Google Cloud storage, all of your data needs to be stored on a physical device. Our data center infrastructure allows us to access our storage quickly and securely. At our scale, we need to handle hard drive and SSV failure on a daily basis. While your data is replicated and safe, we need to destroy or recycle used hard drives so no one can access your data. From the time I disk is removed from the server,
As you know, we have built the world's first carbon neutral juice production plant for them at the harbor in Rotterdam.
And we are offering you the opportunity to see our machines and engineering solutions live in actions on their premises. The formal invitation to the event will follow in due course.
Finally, our roadmap 24. The next important date will be the release of our Q2 figures on August 7th.
And then our Capital Markets Day on 1st and 2nd of October in Amsterdam and Rotterdam. We are looking forward to see you there.
This concludes my presentation and I hand back to Oliver for the Q&A session. Yeah, thank you very much, Stefan and Bernd. And over to you, Sarah, and please be so kind and open up the lines for the Q&A.
To the time it's decommission, we maintain a very strict chain of custody. But this was completely wiped and then destroyed in a huge shredder. Let's go shred some hard drive.
Thank you. If you would like to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. And to withdraw your question, please press star one and one again.
Thank you. We will now take our first question.
Bye.
This is from the line of class Bergeland from City. Please go ahead.
We've looked at a lot of the hardware that runs in our data centers, but it doesn't end there. We need to cool and power our infrastructure in an environmentally sustainable and reliable way. Let's take a look at how we cool our servers.
Thank you.
Thank you, Esteban, Claude and Stéphane.
First on the real estate gain, I think was 10 million in SFT, but which against temporary lower service growth
Welcome to the mechanical equipment room. Looks pretty cool, doesn't it? Oh hey, it's Brian , one of our data center facilities technicians. Hey Brian , Brian , can you tell us a little bit more about this room? Sure, well, this is a cooling plan for one of the data centers that we have on site. So a lot of heat is generated on the server floor. That all has to be removed, and that starts right here in the cooling plan. So it's basically two loops. We have the condenser water loops, and we have the process water loops. The process water loop are these blue and red pipes over here. They take the heat off the server floor and they transfer to these heat exchangers here. The condenser water loop are these green and yellow pipes here. They take the cold water from the basin underneath us. They transfer it to the
was a wash. There was a 10 billion hit to EBITDA from lower service growth. I'm trying to understand this better because I struggle a bit to see it as a wash. And my math
it would have meant that the underlying growth in service must have been 15, 16%, with a drop-through around 60% on the last volume. Total understand that the drop-through is always higher in service, given that you have more amount of people there, are still pretty big numbers. Or put differently, the 15% is actually quite high, considering the slowdown in service growth throughout last year. I thought more like 8 to 10%.
So, sorry, a lot of details, but I just want to understand this better how it could be a wash. Thank you.
The U-Cent Exchangers here, and they send it up to the cooling powers up on the roof. And notice our pipes are Google colors. Pretty cool. So how efficient is our data center? Well, Google has some of the most efficient data centers in the world. In fact, when we started reporting our power usage effectiveness for our PUE in 2008, most other data centers were around 100% overhead. At that point in time, Google was 20% overhead. Since then, we reduced it to just 12%. And that even includes our cafeterias. Whoa, that is so low. Also, what's this big green machine for? Well, this is a chiller. We very rarely use them, but it helps keep the process water temperature in the desired temperature range when it gets really hot outside. Basically helping the cooling tower do its job.
Thank you for your question. I think this all goes around the question of profitability in the service business. And I think if you will not be surprised to hear us saying that we don't provide further information on profitability of the service business. However, I can reconfirm that on the one hand side we had the income from the real estate sale and this was a wash with the business which we didn't.
form in the Q1 as part of the change in the logistics center and we expect this service revenues to
crystallize
predominantly in Q2, 2024, and we will see also the profit contribution of this element in Q2, 2224.
to the majority. So therefore, this will come later. There is a wash on the hand between the missed revenues so far and real estate sale. Sorry, I'm just giving you more indications here. Okay.
Wow, what a view up here.
So, Sandeep, this is the cooling tower. It uses evaporation to rapidly cool the water from the condenser loop and sends it back down to the basin. You could say we're making actual clouds with the cloud. Clouds making actual clouds. Welcome to Google.
I totally get that the service margin is much higher, but just to keep it simple, can you give us the underlying service growth, perhaps? What would the service growth have been?
So Brian , how do we power the cloud? Well, that all starts at Google's power station. Let's go take a look.
Nice question, but I will not provide more details on that.
So this is the Google-owned power substation. This is where the high-voltage power enters the site, it's reduced, and then sent to multiple power distribution centers, such as this one right here. What happens if the power distribution center loses power? If it loses power, we have multiple generator and utility backup sources available to maintain power to those servers.
All right. Then quickly on the corporate line of 10 million versus what I thought was more like a mid-teens level, these costs, as you say, Berent, are now at a divisional level. Was this just this quarter or should we model the corporate line at around 10 million per quarter for the rest of the year?
And where does all the power come from? It actually comes from multiple hydroelectric power plants that are nearby. I love how Google uses reliable green energy whenever possible.
So we have given an indication as part of our outlook early this year for the, let's say, for the line of other in consolidation. We indicated that we expect an EBTA margin of negative 1% to negative 1.5%. What I can indicate you is will be on the lower end of this range, so you should expect roughly negative 1%.
We are 100% carbon neutral, actually. That's pretty cool. You know, it seems like Google builds reliability from the ground up, from the power and cooling all the way to the software system and manage our fleet. Thanks for showing me around, Brian . No problem. Have a great day.
Thank you for joining me on the special behind-the-scenes tour. Please check out cloud.govogood.com to learn how you can build what's next.
as part of this EBTA line for others in consolidation. So it will be a little bit more than the 10 million per quarter, but it will be on the lower end of the range.
Okay, very clear. My very final one for you, Stefan, on the orders,
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It seems like we have the seasonality with orders improving first quarter over fourth quarter, but at the same time, I think the message from you today is that you see the second half of last year as the troffer orders. Does that mean that you think sort of the 1.3, 1.4 billion is sort of the new level as to go through the year, when you think about the pipeline, the conversions,
And is there any end market where you feel things could perhaps improve quicker than others, coming back to the day-reside, for example, given the outlook for improved subsidies, etc.?
I mean, like also Bernd mentioned in his speech, I think
If you look at the last quarters, we can see that sequentially we are picking up again all the intake. So we are also having an interesting and full pipeline also of large projects.
Google is one of the world's leading software and technology developers. Every year, Google introduces new technical discoveries and advancements that are amazing and beneficial to people all around the world.
However, and this is also nothing new. So far we saw a certain postponement of these large orders. I would say if we look out into the economy and to the situation at the...
Because more individuals are using cloud, the Google Cloud platform has experienced and increased in utilization in recent years. A variety of Google Cloud services for global consumers have been introduced in response to the high demand of computing resources.
interest rates we expect that
There is definitely the peak that we also might see interest rates coming down. And I'm quite optimistic that this also will have an impact in the near future
So on realizing the popularity and the need for learning about computing resources of GCP, I have brought a new video of Simply Learn on Google Cloud in-depth tutorial 2022.
on our auto-intake situation and that we will see continuously improving situation during the year when it comes to auto intake.
In this video, I'll take you through crucial GCP services and their in-depth concepts.
Thank you.
We will now take our next question.
So without doing any further ado, let's get started.
This is from the line of Sven Via from UBS. Please go ahead.
But before diving deep into the concepts, we will first cover the basics, starting with understanding what is GCP, followed by the GCP tutorial in which we will explore GCP services.
Yeah, good afternoon. Thanks for taking my questions. The first one is also regarding the order outlook. And I guess in the past, you've also made that a bit more rate sensitive and dependent on rates coming down in the second half.
and its infrastructure. Then we will have a quick comparison between GCP, AWS and Azure, along with hands-on experience with GCP.
I would just wonder how rate sensitive is it really to begin with because you know I guess in the US the rates don't come down as much there's also an economic reason for that and
Then we will move on to GCP web hosting and then we will understand Google machine learning with proper demonstration and at last we will look into the essentials of Google Cloud Platform fundamentals.
And so customers might be doing better than you would have thought. Is not the need to invest more pressing than maybe having a quarter point of lower interest rate at the end of the day? And so the second half
And how to exactly prepare for it? By the end of this video, I can assure you that all your GCP related concepts would have been clear.
is not so dependent on what the Fed does specifically.
Yeah.
Very good question, Sven, but my answer would be 50% of economy psychology.
So for this training with me, I have an experienced GCP specialist. Together we'll work you through the different crucial GCP keynotes.
And that has not only to do with the pure effects, but we see that a lot of customers
So let's start with an exciting video on Google Cloud in debt tutorial 2022. Before we begin, make sure to subscribe to our YouTube channel and hit the bell icon and never miss an update from Simply Run.
I have been not sure how everything is continuing, with all this volatility within the world. And if we get a situation which is a bit more stable and interest rates are coming down a little bit, I personally expect that this will also change the mood and the courage to invest more again. And that is maybe more important.
Good morning and good evening everyone. So welcome to this session on Google Cloud Platform. My name is AJ and I'm an instructor with Simply Learn and also working as a big data and cloud architect for various clients across globe. In this session, we learn about Google Cloud Platform, wherein we will learn about what is cloud computing, why Google Cloud Platform, what is GCP, that is Google Cloud Platform,
then the pure effect interest rates down by 10 basis points or whatever or 100 basis points.
And just to make sure I got this right when you just said,
to class question around the, it will get better every quarter now. Is that kind of a sequential comment? You're comparing this to Q1, or is it as previously a year on year comment?
Google Cloud Platform domains,
about a use case that is Ferreiro use case and also a quick demo on using services from Google Cloud platform.
just to get this right, yeah.
So when we talk about Google Cloud Platform, we also need to know what is cloud computing. So cloud computing is the use of hardware and software competence to deliver a service to a network.
Yeah.
I think I'm quite optimistic that we can see quite solid Q2 in order intake.
I also can say that it started quite well.
Users can access these files and applications and services provided by a cloud provider from any device that has access to Internet.
And yeah, that is my comment. We are still living in a volatile world, but we see that things somehow are moving in the right direction and the situation is
In short, cloud computing is a way where cloud provider provides access to different services such as resources. And when we talk about resources here, we talk about computing, we talk about memory, we talk about processing power, we talk about storage, and we also talk about different services which cloud providers make available for the users. Now, that...
bit more bullish than we saw it in the last six months, let's say like that.
That sounds good. Thank you. And my final question is just
on the topic of MNA, which I guess will also be again a topic at the capital markets day, but it's probably fair to say that in the last couple of years, things have been tough, things not available, things too expensive, and I guess that doesn't really change.
allows us for automatic software integration,
backup and restoring data, unlimited storage capacity, having a reliable use of different services, and having a cost-efficient solution.
I mean, does that change anyhow you're thinking around capital allocation in general and just giving more importance also to the topic of buybacks?
Or do you think the capital allocation is something that shouldn't change too much for the next?
Now, we know that cloud computing models, there are different service models. So you have platform as a service, you have infrastructure as a service, and you have software as a service. And these are the prominent models which are offered by different cloud providers such as Google Cloud.
Yeah, I think you are completely right. It was challenging in the last year to find the right targets. We made some smaller acquisitions, like you know, but it's often not that we stopped talking to potential targets. You can be sure that every month I have minimum one or two meetings with potential targets, which we look at. And sometimes it's not the right company. Sometimes it's not the right time.
such as Google, you have Amazon, you have Azure, and also some organizations build their own private clouds using open source open stack.
Let's focus more on Google Cloud Platform and what it has to offer and how it is gaining popularity in the market with different organizations which would want to work on a cloud platform or which would want to work.
But sooner or later, I'm quite sure that we will also make something here.
And if we will not be
successful, let's say like that, in finding the right target for the right price in the next year or next two years.
on an infrastructure
which is modernized. So when we talk about cloud computing, this is one of the approach which organizations can take to instantaneously benefit from modernization using different services, different platforms, and also newer technologies for their various requirements such as scalability or dynamic businesses.
Then of course we also need to think about capital allocation and we might think about what is then the right allocation like we do at the moment the share buyback.
And then we might continue to do something like that if we don't have any other ideas or maybe we have other ideas. But it's something where I cannot tell you exactly what is going to happen in the next one or two years. Because this depends heavily on the question, can we be successful in finding right targets or finding the right companies or the right price? But we are still active in that area and we still talk frequently and often to potential targets.
Before we get into Google Cloud platform, it is also
good to understand where you can find some useful resources about Google Cloud platform. And here you have a website which is from your Google Cloud. So this is Cloudacademy.com slash library slash Google. And here you can create a free account. Now that would give you just seven days trial, but that has a lot of
But as I always said, we don't want to do any stupid things. When we do something, it should be very clear that this will be a success story, that the price is the right one, the markets are a right one. We have a company we can trust on and then.
videos which talk about your Google Cloud platform and essentials and it has various certification related videos which you can access and then after seven days after you have tried you can obviously go for a paid account where you can take detailed learning from here
Understood. Thank you, Stefan.
Thank you, man.
Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone and wait for your name to be announced. And to which were your question, you can press star one and one again.
We will now take our next question.
Now, this is your training library, which shows your different cloud providers such as Amazon, Microsoft, Azure, GCP, and then you have various other topics which are specifics to organization.
This is from the line of Sebastian Kurner from RBC Capital Markets. Please go ahead.
Yeah, thank you for taking my questions. I first relates to liquid and powder, where you have...
You can obviously look at the pricing and you can also look at resources which will give you a good experience in learning from these videos
decent revenues, you have a nice shift towards services and also higher gross margin.
But at the same time, you talk about higher operating costs. I was wondering what's behind that? Is that something we should expect going forward that maybe capacity utilization is not as good or pricing is coming back at it? What's the reason behind the drop? That would be my first question.
You can also create a free account, which I will walk you through later. So you can create a free account on cloud.gov.com. Now, when I say free account, that basically means it allows you to create an account, and every user who creates an account gets a $300 free credit, which can be used to practice, brush up your skills, and also explore and learn about different Google Cloud products, which are offered by Google.
So, Sebastian, I think with regard to
liquid and power technologies. The main thing here for us is coverage of capacity by sufficient order intake.
Now, coming back to our Google Cloud Platform, let's understand why Google Cloud Platform. So Google Cloud Platform is popular for many reasons. Now, let us see a few of most important reasons why it stands out.
And as you've seen, the order intake is on a low level. Also, organic sales scores is slightly down, so therefore,
It's a question of adjusting capacities and so therefore operating costs, managing operating costs is in the center of our activities. We have already adjusted is
When you talk about pricing, pricing is one of the significant factors that make Google Cloud stand out among the other cloud providers.
as part of some activities at the end of last year and we need to carefully consider whether we need to adjust further
It offers a monthly pricing plan which is billed according to monthly usage and when we talk about billing here, the billing can be in hours, it can be in minutes and it can also be in seconds. There are different options when you talk about your pricing which can be found from your Google Cloud web page. Now pricing could be
Okay, so there are some costs potentially coming in the next
on that.
I'll be good now.
No, I would not expect that. I would not expect that. Whenever we do adaptations, let's say we can do it with a normal fluctuation here or with nothing on top which you would need to think about.
based on preemptive machines. Pricing could be based on reserved instances or reserved resources. I'll show you the link where you can find more details on pricing part of it. So Google Cloud really has various pricing options which help customers in their different requirements, whether they would go for any of the service models such as infrastructure as a service, platform as a service, or even software as a service. One more attractive thing about Google Cloud pricing is that it provides committed use discounts.
Okay.
My second question is on something that Clairce already addressed and I think
you should, it would be good if you could give a bit more detail on this and this on the SFT, on the gain from a property sale and then the push out of
[inaudible]
service revenues have been pushed out. If you lose 10 million EBIDAR, does that mean 30 million, 40 million of service revenue being pushed into 2? And if it's such a large number, what happened there with this logistics partner? I think it's a substantial
For example, under this scheme, you can purchase a specific amount of virtual CPU course and memory for up to 57% discount off.
regular prices if you commit usage for either one or three years. Now this is just one option. There are various such options which you can learn about from the Google Cloud's page and that really suits different customers for their different requirements.
number and maybe you can shed a little bit more light on that situation and whether it could be recurring or whether this is a one-off.
Yeah, so what we have done is we have built a new logistics center in Germany.
Now when we talk about speed, we don't need to really challenge this aspect when it comes to Google services. So Google provides its Google Cloud and Google app customer speed up to 10 terabytes because of its faster cable system. There are different kind of machines which can be used if you are talking about computation, if you are talking about memory, hungry applications or even storage intensive workloads. All in all, speed is one of the defining characteristics of Google Cloud services.
We have transferred in during Q1 at the beginning of Q1 the entire business into this new logistics center.
And when we start this new logistics center, we also changed the collaboration with the service provider. Now we have also a new service provider on board. So we started with the new factory, so with the new logistics center and the new service provider at the same time.
And we've seen we were faced with significant IT issues on the service provider side, so they were not able to do the picks for the service business as required. So there was a significant underperformance compared to demand. So therefore we couldn't fulfill all the orders.
The cable has connections over US West Coast.
main cities in Japan, and even major hubs in Asia. This speed enhances performances and leads to customer satisfaction. Now, when we talk about customers, any or every customer would prefer to have low latency, high throughput based services. They would want to use higher speeds to process their data in as less time as possible. Google provides a low latency network infrastructure. In fact, you can see. say that when you are using Google Cloud services, you are using the services from the same infrastructure which Google uses for its popular services such as Google Search or even
on time and this led to a postponement of execution of orders from the first quarter into as I said earlier into predominantly into the second quarter so we basically expect to entirely catch up in the second quarter and what I also said we have even seen in the meantime pick up in the order intake on the service side so if we want to understand whether there is a negative impact on the business side itself we can say that we did not experience that so therefore we only see move of revenue as well as profitability from this business into the second quarter
YouTube, which is one of the second largest repository which can be accessed for videos. Now when we talk about big data, big data is data which is very complex, has lot of other characteristics such as your volume, you have velocity, you have variety, you have veracity, validity, volatility, virality and so on. So if an organization is working on big data, go, Google Cloud can be a better choice because Google has many innovative tools for cloud warehousing, for example such as BigQuery and even real-time data processing tools such as data flow. BigQuery is a
But could it not be that customers are now seeing that there are delays and therefore they bring service orders forward just in case?
No, I think we- Was a genuine service order.
that you see.
So we
We identified the issue quite early in the quarter and we were able to prioritize the execution of the orders in line with expectations of customers.
and we manage closely the customer relationship so we even don't expect any negative impact on the customer side.
data warehouse that allows massive processing of data at high speeds
And finally, again, so the impact was 10 million on Ebedah.
basically working on your structured data. Google also has launched some new machine learning from artificial intelligence tools. Now, there are various other services which we can use from Google Cloud Platform. But let's understand what is Google Cloud Platform and what are some of the services. Even the services which are not listed here can be found in your console from Google Cloud. So what is Google Cloud Platform, GCP, and the
what do you then say is to push out in terms of Q1, Q2? It must be a large number, right? Otherwise, the math simply don't work.
Or as I said earlier, we will not comment further on this.
Okay, thank you very much.
Thank you.
We'll now take our next question.
This question is from Christoph Dullochal from HSBC. Please go ahead.
It is a set of cloud computing services provided by Google that runs on the same infrastructure, as I mentioned, that Google uses for its end-user products like YouTube, Gmail, and even Google Search. The various set of services offered by Google Cloud Platform are, so you have services which are specific to computing requirements, and again, in computing, you have
Yeah, good afternoon everyone. First of all a question on the very strong currency effect seen in SFT and farm technologies. It was at least higher than I expected. Could you explain which countries this primarily came from and what their revenue share was?
supposedly high inflation countries or high
various different options available. You have machines which are compute optimized, machines which are memory optimized, machines which are storage optimized, and also we have certain machines such as preemptive, which basically means that you could get a machine to work on at a far lesser price than any other machine. But when we talk about preemptive, these are the machines which can be requested on demand and they can be taken back by Google at any time. You have networking related services.
Yeah, you're absolutely right. So major currencies where we see this impact are hyperinflation countries, Argentina as well as Turkey.
Those were the biggest contributors, but we also see an impact from the Chinese Raminbi. And also, let's say that, so those are the most important currencies. So those three would like to mention.
And because obviously the shares then of those countries must be higher than on average for the group, can you give us a bit more detail on what the revenue shares of Argentina and Turkey are for SFT and FT?
which can be very useful when you are setting up your applications or your services across globe. You also have different services which are specific to machine learning and organizations which would be interested in working on machine learning or artificial intelligence would be really interested in using these services. There are also innovative solutions to work on big data and big data related technologies. Now, when we talk about Google Cloud Platform domains, so we can break down these services into specifics such as you have compute. Now, the compute service allows for computing and hosting.
Because it has been a problem for a few quarters now, right? That's true.
Just bear in mind that in Argentina we have seen basically inflation in the months of December as an example by 100%. This has continued since then. So the impact is surprisingly high.
And can you give us an idea how much roughly of revenue is coming from Argentina and Turkey?
the cloud.
Now when you talk about computing, here there are different services.
or you don't disclose it on the second level.
such as app engine, you have compute engine, you have Kubernetes, you have cloud functions, and cloud run. When you talk about storage and database, so the storage and database service allows application to store media files, backups, or other file-like objects. Now, various services under this are as follows. You have cloud storage, cloud SQL, cloud big table for unstructured data. You have cloud spanner, cloud. data store, persistent disks, and cloud memory store.
Let me just check whether we can provide those. So we will check and we will provide that number maybe later in the call. So maybe we can continue to get a follow up on.
on LPT as you already indicated in Q4 and also to, yeah, at the results you said you were starting to adjust capacities because the order intake situation is not as it was expected. I was just wondering whether you can give us an update there and what kind of a capacity adjustment should we think about. I mean we were at, let's say, 450 to 500 million.
When we talk about networking, the networking service allows us to load balance traffic across resources. Now as I mentioned earlier, resources could be your different resources which you would be using from a cloud platform such as your devices, your instances, memory optimized or CPU optimized instances or other resources creating DNS records and much more. So various services under this are VPC. that stands for virtual private cloud. You have cloud load balancing, cloud armor, cloud CDN. You have cloud interconnect DNS and network service T.S. When we talk about the big data service, this allows us to process and
a quarter and now we are rather at levels say about 400 million is that a fair assumption basically let's say from from one
0.8 to 1.6 in order intake.
Is that a fair?
judgment. Yeah, I mean, you have to have in mind when we talk about the LPD business, this is a business where
have a very high proportion of material and equipment higher than in other
divisions because the large project has a higher
Yeah, higher spend here. And then it depends very much. What do we do in LPT? It's difficult to give you here numbers.
But I can tell you that you don't have any fear
query big data in cloud
Now, various services under these are as follows. You have BigQuery, Cloud, Cloud Data Proc, Cloud Composer, Cloud Data Lab, Cloud Data Prep, Cloud Pub, which is Published and subscribing system. You have Cloud Data Studio. Now, you also have the developer tools, and developer tools service includes tools related to development of an application. Now, various services under these are as follows. That is, you have Cloud SDK, Software Development Kit. You have deployment manager, cloud source repositories, and cloud test lab.
that any restructuring costs are coming here up.
That's not foreseeable. First of all, because we have a very interesting pipeline and we see and feel that we will get interesting orders in the
in the course of the year.
And secondly,
It is nothing which we just start. We already started at the end of last year, in the beginning of this, in the first quarter.
to take out people where they are not needed and adapt the organization whenever necessary. So there's nothing which should worry you here.
When we talk about identity and security, which is one of the primary concerns for any organization or any user who would be interested in using a cloud platform, Google Cloud really has taken care of this.
I recall that I was just wondering when we see the margin moving up again because you've already started taking those measures. So as of Q2, we expect the margin to improve again?
So when you talk about identity and security domain, this deals with security services. Now various services here are cloud identity. You have identity and access management that is cloud IAM. You have identity aware proxies. You have cloud data loss prevention API, security key enforcement, key management service and many more.
I mean, the margin will come back when sales is picking up. That's very clear because we need additional sales to really bring up the margin.
Okay, then also on LPT one more you said you saw postponements, but you didn't see cancellations, right?
No.
You also have cloud services which are related to internet of things. So very much would be used by organizations who would be working on IOT devices or the data generated by these devices. So various services here are cloud IOT core. You have edge TPU and cloud IOT. Also, when we talk about cloud AI, that is artificial intelligence, this comprises of services related to machines. learning and much more so you have cloud auto ML cloud TPU cloud machine learning engine job discovery
And then last but not least on prices, at the Q4 call you indicated that you see wage growth in the region of 3% and said, okay, that is most likely to be compensated with price increases.
Were they already executed or are price increases
going to come the year. It's not that we have one single date where the whole Gia Group Worldwide is increasing prices.
depends on countries, it depends on divisions or even business units.
In some of our businesses, we have price list and others. We do project calculations, so it's
Dialogue Flow Enterprise, Natural Language Cloud, Text to Speech, and much more.
It's not that we can say, has it been executed yes or not. It's more a continuous process in which we are in, where we are talking and challenging our businesses frequently and regularly.
If you would be interested in services related to API platform, then there are different services under this category or this domain. So you have Maps platform, you have APG API platform, monetization, developer portal, analytics, that is API analytics, APG sense, cloud endpoints, and service infrastructure.
And also this year we had already meaningful price increases in different areas.
All right, thank you.
I would like to come back to your earlier question on the currencies. I would like to refer to our presentation and in the backup on slide.
So these are some of the listing of services under each cloud platform domain.
Now let's look at Ferreiro use case and let's also understand what was done here. So Ferreiro is one of the famous chocolate and ranks third among worldwide chocolate and confectionery producers. It was found in 1946 in Italy. I'm sure you would have seen the Ferreiro chocolates when you would have gone out to buy some
34.
You can find all the information on our currency exposure there. So there you see based on order intake, the split,
for the Q1 2024.
and just to name the countries and currencies which I've just named here,
China, we have an 8% share of our entire orders on group level. For Turkey, we have 2% of total order intake and for Argentina 1%. So we share that only on group level and not on divisional level.
So the challenges here was that federal, as we know, is sold in every supermarket and is known for its quality. Once the business grew, some issues arose, right? And that's what happens when the business grows, you have issues popping up, which could be related to the volume of data, the speed with which the data is getting generated, the variety of data, and also looking at your platforms with support,
Yeah, I mean I've seen that and that from these numbers I wasn't able to really conclude why the other numbers were down so much, but I'll try to do the math on the back of that. Thank you. Okay, thank you. Welcome. Thank you.
different dynamic applications or your scalability requirements, performance requirements, and so on. So it needed data storage, processing and analysis system for a wide customer database.
We will now take our final question.
The last question is from the line of Sebastian Grower from BMP Paribati exam. Please go ahead.
Hello, everybody. Thanks for taking my questions. First one would be around the FHT segment. You had a more than 200 base points margin recovery. I'm now hitting the lower bound of the 24 target range, so 9.5 to 115. And that is despite the
There was a huge gap between the company and the people who bought its goods because the company relied on data given sales outlets. Now, that's one of the challenge. Ferreiro wanted to create a digital ecosystem where there was a point of contact with its customers and also a foundation for an innovative data-driven marketing strategy.
say it's dropping 20% roughly, sequentially that is.
So I guess my question against the backdrop is how should we think about the trajectory from here, both from a mixed perspective as per what's in your order backlog. And as you also gave a bit of color around the LPT segment and the order pipeline, how should we think about the outlook in terms of demand going forward for the segment?
What was the solution here? So one of the service of cloud platforms or Google Cloud Platform is Big Query, and this was an answer to Ferrerose challenges since it was capable of hyper-fast and efficient data analysis as a solution.
Then I would have one more, but maybe you can start here first.
Now, as I mentioned, Big Query is a data warehouse which allows you to store structured data. Now, this could directly be used as a service where you could store in any amount of data and you would not be paying for storage. So there are different pricing models and...
I think what you can see is that we, and that is also what we guided and told in the last call that
We can get rid of the issues in FHT. We will get rid of the issues in FHT. That is also what you can see here.
For data up to 1 terabytes, you would not be charged anything. And if you would be accessing the data, that is reading the data or processing the data from BigQuery, that's where the pricing model kicks in.
which is, that we are now in Q1 already at the margin, which is already at the lower end of the guidance range we have for this year for FHT. So we are here quite good underway and a lot of measures are in place.
Now, using Google Cloud's BigQuery, business analysts of Federal were able to store and analyze massive datasets in a very reliable, fast, and affordable manner.
So that I can confirm, like I promised you, that we have identified the issues, we have addressed the issues and we are managing the issues.
Consumer behavior and sales pattern data reports were easy to build and automate.
So we'll be fair to assume that with the sort of better mix in the backlog that there's a lot of self-help just from executing more of the newer projects within new structures and then if volumes were to come on top and maybe you can comment on the pipeline.
And the analysis also followed Ferrer to adopt.
advertising across various marketing channels to serve the customer needs in a better way.
What was the result?
then there would be additional leeway is that the right sort of framework? Yeah, sounds good. Yeah, I think so, yeah.
They could divide their database into real-time, actionable consumer clusters to generate more accurate user profiles. Ferreiro was also able to personalize its marketing strategies to match the user needs.
Good, then out for the pipeline.
Thank you.
Now, Google Cloud Platform completely tailored the website, mobile content and advertising, and created a very cost-effective media by strategy.
And there are no further questions, so I will now hand the conference back to Mr. Claybird for final remarks.
Yes, thank you very much. Thank you all for your good questions and for your interest. I hope that we could show you that Gia is delivering again and again and again. We are delivering what we promise. We are again a bit better in terms of profitability like you might have expected.
Now, these were some basics on Google Cloud. Now, as I said, you can always find a lot of details about pricing, about services, and also, all the services are accessible in your free trial account. Now, let me just walk you through here. So one is...
You could always find details on documentation on each of these services. So if I would click on getting started, you have Quick Start, which basically shows you short tutorials. You have trainings and you have also certifications. Now if we click on Quick Start,
and we are in line with our growth rate of sales.
We are also optimistic that the order intake will pick up during the course of the year.
and that is my summary from today.
So stay tuned and thanks for your continuing interest and then we will talk to each other again when we release our half-year numbers. Thank you very much and have a good day.
Now that takes me to this page which shows me
Big starts.
Or if you would want to understand about different projects, if you would want to look into the documentation of creating a Linux virtual machine or storing a file and sharing it, deploying a container, Docker container image, and so on. So you have a lot of quick starts here. You can also look at Cloud Minute.
On the same page, on the right side you have docs, and once you click on that, it takes you to these
links. Now this shows you build solutions which shows you top use cases, best practices, all the solutions. It's always good to learn from these use cases which are available. And here you have different feature products and all the different services which Google Cloud offers. Now you can click on featured products.
and that basically shows you a list of these products. Now here we have all the solutions which you can look at architecture, database, enterprise, enterprise, enterprise, game-related, internet of things, and so on. Now if you go down here, it shows you featured products and that shows you
Some of the important products such as compute engine, which is belonging to the compute domain. You have Cloud Run. You have Anthros, which is for migration and basically cloud adoption.
when organizations would want to move from on premise to cloud-based solutions, you have vision AI, you have cloud storage. Now, that basically allows you to store any kind of data, whether that's an object. So this is acting as an object storage. You have cloud SQL, which is basically a ready-to-use service where you would be using MySQL, Postgres, or any other SQL server database services. You have BigQuery, which is a data warehouse, which basically allows you to store, you. your structured data, and then you have your AI and machine learning related products. So you have auto ML, vision AI, video AI, text to speech, space to text, and so on.
Now, you also have different platform accelerators, which can be used. And in any of these cases, for example, if I would click on compute engine, which is a featured product from Google Cloud, now that shows you basically your quickstarts.
using your Linux machines, how to guides, which tells you completely working on a VM instance or working on storage, working on persistent disks and so on. And it shows you the documentation here. Now, you also have products and pricing option, which you can see for GCP pricing. And you could straight away go to the pricing. You could be looking at solutions, which talks about infrastructure modernization. Now, this is something which, obviously, organizations are interested in when they would want to move from their on-premise solution to your Google Cloud. Now here I can say, for example, I click on infrastructure modernization. You can always find some case studies.
what are the different solutions you have here right when you talk about Google cloud so you can always click on C solutions and you can look at VM migration or SAP Cloud right by Google Cloud what it can be used for VMware as a service or HPC that is high performance computing and about these services we will learn in detail later now I can go back on the same page where I was clicking on the services so you have quick starts you have
how to guides, you have deep understanding of different concepts, right? And here, if I click on all how to guides, so that shows me what are the different ways in which you can work with compute engine and working with different instances, although it's quite exhaustive content, but then if you follow steadily, then you can learn a lot about Google Cloud.
Now here I can just go back. So this is just giving you some idea on the different products which are available from Google Cloud, looking into different sections, finding, right, documentation here, right? And you can always look into each one of these in detail for each product which Google Cloud offers.
Now, if we scroll down, we could see all the options or all the domains which we see here, right? Let me just go back because we got into solutions. Now we have quick starts, right?
And then you can basically scroll all the way down to look at Cloud SDK, which can be set up on your Windows machine. Like I have set it up on my Windows machine.
Plus, when you use Google Console, you have a GUI, which I'll show you in a couple of minutes, and also a Cloud Shell where you can use your command line options to work with Google Cloud Platform. You have Cloud Console, which is nothing but your GUI to access your resources. Now, you can also look at in-depth tutorials, pricing, and you have different other options. So let's just click on pricing here. and then we have
your price list, which basically gives you details of different services, what are available, and what are the services or what are the prices. So, for example, if I click on compute engine, right, and this shows me the pricing aspect of compute engine, which belongs to compute domain. And here you can see you have VM instance pricing, you have networking pricing, sole tenant nodes, which are specific to particular organizations. or if organizations would want to have dedicated notes, you have GPU-based pricing. So general processing units, you have disk and image pricing, and you can click on any of the links, and you can see pricing, which also shows you your different kind of machine types. So here
you have different kind of machine types which says N1, N2, N2, D, E2. You have memory optimized machine types. You have compute optimized. You have premium images. And you can basically look at all the categories. You can look at disk pricing, which involves your persistent disk pricing for SSDs or SDDs. What are the kind of images? What are the different network services? And you can always look at your machine types. you can choose a particular region, right? There is the concept of region and availability zones here. And as per region, you could look at the prices.
You can also look at standard prices. You could be looking for what are the free tier machines. If I'm specifically looking for VM instance pricing, I can click on this one. And that takes me to the VM instance pricing. What is the billing module? What is the instance uptime? What is it a source-based pricing? And then you can also look at different kind of discounts, such as sustained use discounts, committed use discounts, discounts for preemptible VM instances, and so on. And this is how. you can be looking at pricing for all different resources and you can choose the resource which you are interested in and then look for the pricing, benchmarks,
reservations if you would want to use and you would want to benefit if you would want to look at what are the quotas and limits and so on. So please explore this link and you can find a lot of information when it comes to technical options looking at different Google Cloud products which we briefly discussed when it comes to domains.
and what each product can be used for. You can always come back to the main page where I was showing you different services. We went into pricing straightaway, right? Now you can always come back to this page on your cloud.gov.com and then you have your solutions.
which talks about different products, right? And you can click on these or you can look into technical documentation. So this talks about your different featured solutions, infrastructure solutions, you have data center migration related, and so on.
So I could be talking more and more about Google Cloud platform. It's a ocean. It's a huge chunk of different services for different organizational requirements.
So look into this link and also what you can do is create a account on Gmail. I mean, you could create a free account or you could go to cloud.goggle.com and then you could create a free account like I have created here and I can just click on console. Now that's my GUI or Google Cloud console, which basically allows me to work with Google Cloud. Now there are a lot of options here by default when you create an account. Now in my case on the top it says it's a free trial account. I have $300 credit and out of that $251 is left and two 37 days out of a year are left for my account. Now here I can basically see
the project, right, and by default, we can create a project or by default there is a project existing for any user. So when you log in, it creates a particular project and you could create a new project and project would be to dedicate your different services or different resources per different project.
So this is your dashboard, which basically shows your project, which shows you a project number and a project ID, which is always unique. Now, you can click on this and this, if you would want, you can hide this information. You can also look into the documentation part of it. Then it shows you the different services or a graphical information of services which you might have used in past. So you have compute engine, which shows you how much percentage of CPU was used. You can always go to compute engine as a service. You can look at your Google route platform status and look at the Google Cloud status. Now, this is billing. Now, since this shows me the billing period for April month, and I can always look at details.
charges, I can look at reporting, I can look at different APIs which Google offers and for your different kind of work, you can always go to the API overview or the API link and enable or disable any API. Now once you enable or disable any API, then you can use that.
So you have news section, you have documentation, and you have getting started guides which tells you how to work or enable different APIs. If you would want to deploy a pre-built solution at dynamic logging, monitoring errors, deploying a Hello World app and so on. Now, this is your dashboard. I can click on activity and that would show me what kind of activity I would have done in my cloud platform. I can always choose the kind of activities by saying activity type. I can choose the resources. Now, it shows me that I created some VM instances. I deleted them. I updated some metadata. I basically worked on instances. I changed
some firewall rules here. I have then also worked on some other services or APIs. So I created some buckets which is for object storage.
And again, I have been working with some instances and creating some firewall rules. Here, I have granted some permissions. I am setting up a policy, right? So this activity gives me a history of what things I have done over the past couple of months while working on Google Cloud platform.
Now,
On the top left corner, you have the hamburger menu, which you can click on this. So that's your navigation menu. And when you click on this, this shows you home. It takes you to the marketplace. It specifically takes you to billing. You can always look at APIs and services. So here in API services, I can pretty much go to a dashboard and I can see a report on the traffic or errors or latency and the kind of APIs, which I are available. So you have compute engine API. You have BigQuery API, BigQuery data transfer API, BigQuery storage, cloud data prox. So these are some of the APIs or services I've used in past. Might be I was evaluating a product. Might be I was using
using a particular product. So you have whenever you would want to use a particular service from Google Cloud platform, you would be enabling these APIs. So here we see some APIs for data proc. You have
logging, monitoring, you have resource manager API, you have CloudSQL, which allows you to directly use MySQL or Postgres, you have cloud storage, right, and so many APIs. So if I would want to enable a particular API, which is not right now required, but then it's good to know, you can always click on this one, you can search for an API. So for example, if I would say data proc, right, and that shows me the Cloud Data Proc API, which manages Hadoob, base clusters and jobs on Google Cloud Platform so I can spin up a Hadoop cluster and I can start running some jobs on a Hadoop cluster on demand and as I'm done with it, I can just get rid of it. So this is an API which I
would have to enable and then for every particular service you also have an admin API which you would enable
Now, going back, so coming out from this API library, I got into API and services. Now there is, you can look into the library, you can look at credentials, and you can also look at different time intervals for which you can see the usage of your different APIs.
Now going back to the menu, you have support.
wherein you can always reach out to the Google support team if you are using a paid version. Even with free trial, you can try to reach out and you will find someone to help, but it is always good when you have a billing cycle reaching out the customer care.
You have identity access management and admin, and this is required when you're working with different APIs or services.
when you would want to have relevant access. You have getting started. You have security related options. You have anthos, which is mainly for migration. Now here, you can look at your different domains, such as which we discuss, so you have compute. And in compute, you have different services. So you have app engine. You have compute engine, Kubernetes. You have cloud functions and cloud run. You can look into the storage aspect, which shows you bit table, which is usually and mainly. for your unstructured data.
BitTable, which is something which gave rise to popular NoSQL databases like Edgebase and Cassandra. You have Data Store, which can be used. You have Fire Store, File Store, Storage, which can be used to put in data of any kinds. You have SQL for structured data. You have Spanner as a service. You have memory store and you have data transfer.
Now, when it comes to the networking domain, you have all these services such as VPC, Virtual Private Network,
network-related services for your load balancing, for using a cloud-based DNS or cloud-defined network. You have hybrid connectivity, network service tiers, security and intelligence.
Then you have other options for your operations which can be used and here you have different other tools which can be used such as cloud build. You have cloud tasks, container registry, deployment manager and many more.
Big data specific, you have the services here, so you have data proc which can be used to spin up your clusters. You have published subscribed messaging systems such as now Kafka, which you might have heard of, originates its idea from here. So PubSub, you have data flow, you have IoT core, BigQuery, which is a data warehouse package or data warehousing solution from Google Cloud.
Now, then you have your artificial intelligence related services and other Google solutions.
So you can always find a huge list of services or you can say at high level solutions offered by Google Cloud.
And we can use these to basically test some of the solutions, use them, and work on them. So I'll give you a quick demo on different services which can be used here from your Google Cloud Platform. Now this is your Google Cloud Platform and this is your console. Now this also gives you a Cloud Shell which can be activated so that you can work from command line. And you can always find a lot of documentation on that. So you can also set up your cloud shell that is SDK on your Windows machine. And if you have set it up, then basically you could be doing something like GCloud.
Right? If the cloud has been set up. So in my case, I had set up the cloud SDK and basically I can get into that.
by looking at what path I have set up. So Cloud SDK, and then I can be using it from my Windows machine. As per my comfort, I can also activate the Cloud Shell here, which will basically open up a terminal. And at any point of time, you can open up this one Cloud Shell in a different window. It is preparing the Cloud Shell where it will by default set up your project. It will set up the metadata. And now I am logged into my Google Cloud account, from from command line and here I can basically use GCloud right and that basically shows you the different options which are available which you can be using so if you would want to use a particular service you can also try giving a help
and that shows you how do you manage your Google Cloud platform, right? So you have different options for billing, to work with your different services, and basically, you could be working on Google Cloud using this Cloud shell from your command line. Usually for people who are learning Google Cloud in the beginning, it is always good to go for console and use your different services from here in an easier way. But as I said, you can always use the command line. For example, if I would just go ahead and type G Cloud, create instances.
and that will directly take me to the cloud console documentation, which shows you different options which you can use to work with instances. So I could do a GCloud, compute instances create, and then I can give my instance name and so on. And I'll show you some examples on that. So you can be using your cloud console, right? That is your cloud shell and you can straight away start working from command line. However, I would suggest using console in the beginning, and when you are well experienced, then you can start using Cloud Shell to do things from command line. And when you are fully experienced, you can always switch. And certain things are usually useful or easier when done from command line. And some are easier when you do it
from the console and you can use any one of these options.
Now, we can go to Google Cloud Console. Now, as of now, I can close this one. I still have my Cloud Shell open if I would want to look into it. I can click on this one, and I can straight away go to Compute Engine, where I would want to work on creating some instances on Google Cloud Platform using the Compute Engine service, and then basically connecting to those instances and basically trying out some basic things. So you can click on VM instances. And then once this comes up, I can always create some instances. Now, if you see here, I have some instances already created, right? And I can continue working on those. I can create new instances. I can use different options while.
creating instances and I'll show you that in a demo in quick seconds.
So let's have a quick demo on setting up GCP instances. Now, before that, let's have a quick recap. So when you talk about instance or a virtual machine, it is hosted on Google's infrastructure, right? And you can create your Google Cloud instance using this Google Cloud console, that is, by clicking on this and then going to compute engine and clicking on VM instances. Now, you can also do that. from Google Cloud command line tool that is Cloud Shell and you can be doing that using compute engine API.
So compute engine instances can run the public images for Linux or Windows servers
that Google provides, you also have option of creating or using custom images that you can create and import from your existing systems. You can deploy Docker containers which are automatically launched on instance running containers, optimized OS.
Now when you talk about instances and projects, always remember that in each instance belongs to a Google Cloud console project and a project can have one or more instances.
When you talk about instances and storage options, each instance has a small boot persistent disk, which I will show you in further screens that contains the OS. You can add more storage space if needed.
And when you talk about instances and network, a project can have up to five VPC networks. So VPC network is virtual private networks, wherein you can, virtual private cloud networks, where you can have your resources within your own subnet.
and each instance belongs to one VPC network.
Now, instances in same network can communicate with each other through local area network protocol. An instance uses internet to communicate within any machine. So that could be virtual, physical, or outside its own network.
When you talk about instances and containers, you should remember that compute engine instances support a declarative method for launching your application using containers.
Now you can create a VM instance or a VM instance template. You can provide a Docker image and launch the configuration.
So there are different ways in which you can create these instances. And once you create these instances, you can say for example, you're creating a Linux instance. You can associate SSA keys with your Google account or your G Suite account and then manage your admin, non-admin access to the instance using IM roles.
If you connect to your instance using GCloud or SSH from console, which we will see later, compute engine can generate SSH keys for you and apply that to your Google Cloud or G Suite account.
Now, what we can do is we can see how we can create your Google Cloud instances from your console or from the command line. Let's have a look in creating instances using GCP console. Now that, we have learned on some basics of Google Cloud platform, what are the different services, what are different domains, basically looking at your Google Cloud console or even Cloud Shell.
Let's go ahead and create some VM instances. Now that's from your compute engine service. And let's try connecting to these instances and see how this works. Let's also see what are the different options which are available when you would want to create the virtual machine instances here. So when you click on your drop down from the top left and choose compute engine, so it brings you to this page. So I can show that again. So you can click on compute engine, click on VM engine. instances and that basically brings you to this page. Now here it tells you compute engine lets you use virtual machines that run on Google's infrastructure so we can create micro VMs or large instances running different distributions of Linux.
or Windows using standard images, that is public images, and you can also have your own image. So let's create a VM instance by clicking on create. Now that's basically helping me to create an instance here. So it shows me the instance name. I can give it something. So let me see C1. Now I can add labels. So what is label? It basically allows you to organize your project at arbitrary labels as key value pairs to your resources. So this is basically categorizing your labels and projects if you have multiple projects. Now remember if you have your Cloud Console and if you have created your free trial account, it will allow you to do these things.
you may have to go back to the billing section and see if the billing is enabled, which also means that when you are creating your Google Cloud account, it will ask you to key in your credit card details, but they do not charge anything. Or they might charge, might be $1 or $1 or $1 depending on your location, and that's also refunded, but that's just to verify your card. Now, once I've given the name, I can choose a region. So I would basically choose Europe . Since I'm in Europe , I would be clicking on Europe . West 3 and here I can choose an availability zone. Availability zone is basically to make your services or instances or any other resources highly available. So you can choose one of the availability
zones now I would choose save s3 now this one we can scroll down and here it says machine configurations you have general purpose machines you have memory optimized machines which is m1 series and you can always go back to the google cloud page and see what a particular kind of machine specializes in so I would click on general purpose and in general purpose you have different categories so you have n1 which is powered by intel sky lake cp u platform or you have e2 which is CPU platform selected selection based on availability so let's have n1 selected now this one shows me the machine type and if you are using your free tier account then you can start with correcting a
micro machine, which is one virtual CPU core. You can go for a G1 small, which is one virtual CPU core and 1.7gb RAM. You can even go up to a high-end machine. And then you can basically see if you are using a free account, how many of these machines you can use. If I would be selecting eight virtual CPU cores and 32-gigabyte of memory, then it would allow me to create at least two instances by this configuration. We will use N1 standard, which is one, virtual CPU core, 3.75 GB memory. Now, then we can also deploy a container image to this VM instance. If you would be interested in deploying a container image, let's not get into that right now. Here, it shows
you the boot disk and it shows you DBN, G and U9 Linux 9. What I would do is I can go for this distribution or I can choose a Linux distribution of my choice. So here you have public images, you have custom images, you also have snapshots if you have created backup of your previous images.
Here, I can choose, for example, Ubuntu, and then I can choose a particular version. So let's go for Ubuntu 18.04. You can go for the latest one also. 18.04 would be good enough.
And here it tells me what is a boot disk. So you have SSDs or you have standard persistent disk. Now SSDs are little expensive in comparison to your standard persistent disk or your SDDs, but then SSDs are faster. So as of now, we can choose standard persistent disk as it is and we can let the gigabyte be 10. Now depending on your requirement, you can increase this. You can even add disks later. That's not a problem. click on select. Now here I have access scopes. So here I will say allow default access. You can also set access for each API or you can give full access to all cloud APIs. So that based on
your requirement you can any time change later also we will also say allow STTP traffic and we can also choose allow STTPS traffic that basically allows me to access this machine or services which are STDB based accessible from this machine now I can just click on create however it would be good to basically enable connectivity to this machine now we can do that in different ways one is when you bring up your machine it will have an SSH access which you can log in from the cloud platform here itself or what you can do is you can create a private and a public key using some softwares like putty or putty gen so for example if you do not have that on your machine you can doubt
Download, you can just type in download Puti. That takes you to the Puti.org page. And here you can click on Download Puti and scroll down, which shows you for your 64-bit machine, which I have in my case, you can download putti. .exe, which is basically your SSH Intelnet client to connect to your machines. You can also use Puti Gen, which will be allowing you to create a private and a public key.
which I have done in my case. Let me show you how. So what you can do is you can go to Puti Gen to begin with. And here you can click on Generate. Now then to have this key generated, just move your cursor on the top here in the empty space and that creates your key. You can give it a name. So for example, let's give a username. I would give HDU. Now I can give a password for this one. So let me give a simple password.
And what I can also do is I can copy this public key from here and for my later usage, I can just keep it in my notepad file, which I can use later and I'll show you when. So now we can save this private key and this will basically allow me to save my private key. I can choose desktop and I can give it a name. So let's say new key.
new key and that will be getting saved in a .pk file.
So let's save it and that's done. So we also have our public key and we have saved our private key. Now we know that when you would want to connect using SSH, you need your private keys to the client and public key also has to be existing. So let's take this public key. So let's do a control A. I'm going to copy this and I'm going to come back to my Google Cloud console. And here you can click on security. So you can click on the security tab here, scroll down. and just give you a public key. Once you give that, it resolves and shows you the name. And this is good enough so that I can use my SSH client to connect to this machine. I can click on create and this will basically create my VM instance.
It will take some time and then your instance will have an internal IP which will show up here, external IP, and it will also show you options to connect to these machines. So this is my internal IP, this is my external IP which I can use to connect from a client. I can easily connect from the option here, which says SSH, and I can say open in a browser window. I can even open this in a custom port. I can look at the GCloud command, which you can give from Cloud Shell or you can use another SSH. So let's first do a open in browser window and let's see if this connects. So we can easily connect to our instance, the Ubuntu 18 instance, which I use.
just set up here easily in couple of seconds. Now this is trying to establish a connection using your SSH keys and when you do that it also basically brings up this web browser so I'm already connected. It shows my username which is my cloud account username and I have been connected to this machine here using SSH. It did not ask me for any password.
And basically now I can just check what do I have in my Linux file system, right? And I can anytime login as root by doing a pseudo-su. For example, let's try installing a package and I can say AppKit install WIM.
or AppGet installed W get or Apptget install open SSH and all these packages are already existing. So not an issue. Now I can start using this instance. I can just look at the disk what is available. Okay, now we gave around 10 gigabyte out of which we see 8.3 gigabyte here.
for the dev SDA1 and then 1.8 gigabyte available. And you can continue using this machine. This was the easiest way of connecting to a VM instance using SSH.
Now, what we can also do is I can just leave this and I will now try to connect using an external SSH client, right? And here you can copy the public IP. So when you want to connect to an instance, you will have to get the public IP.
Also remember that if you select and stop this machine, which will stop your billing counter, and if you start it again, the internal IP will remain same, but the external IP is the one which will change.
I can obviously select this machine any time and I can do a cleanup and I can delete it.
I can do a start of the machine if it is stopped.
and I can even import the virtual machine to be used later. So there are different options which you can always use.
So this is my instance and if you would want to look at the details, click on this one, C1, and that should basically allow you to look at the details. So it shows you what is the instance ID, what is the machine type, is it reservation specific, what is the CPU platform, what's the zone and all the other details.
At any point of time, if you would want to edit, you can always click on edit and you can change the details as you need. Now, you can also look at the equivalent rest command to basically use the rest API to connect to this instance. For now, I have copied the public IP and I would want to connect it using Puti. So let's go in here and let's give it the host name. So I can give Ubuntu. I can give my IP address. So that's in my session. Now I will click on SSH. I would go into authentication. I'll click on browse and this is where I need to choose the PPK file. So this is the one which we created new key. Let's select this.
And then I can come back to session. I can even save this and I can call it as my instance one.
Let's save it and you can create any number of instances. So you see I have created different instances here for my Google Cloud or Amazon related instances and I can click on open. It says the service host keys not cast in the registry. That's fine. Just click on yes.
and basically it says no authentication method supported. Now this could be because we have not enabled your SSH access. So let's look at that. So now let's see if we were trying to connect using Puti, what was the issue here? So if I go back to my
Puti, select my instance, load it, it says 422. I'm giving the username which is Wyn2 or sorry, that's the wrong username we gave and that might be the reason we had set up the user as SDU. So let's save this again and now let's try connecting to this one and it asks for my password and you are able to connect this. Now if there was any other issue related to network connectivity, then we could look at the rule the inbound and outbound rules which allow us to look into the machine. Now we are connected to our machine here using HDU user. I can log in as route and I can continue working.
So not only from the SSH within the cloud console, but you can use an external SSH client and connect to your machine. So this is your open to machine and we can basically look at the space and that basically confirms we are connecting to the same machine, which shows 8.3 gigabytes here and 1.8 gigabytes here, which we were seeing from the SSH in the browser. Now, let's close this and let's go back to our instance page. Now here, you can always look at the network. details and this will show you your different kind of rules that is ingress or egress rules which basically allows to connect to this machine from an external network or for this machine to connect to an external network.
So here we have different firewall rules which shows default allow STTP. That's your Ingress rule and it tells you apply to all. It shows me what are the IP ranges where I can specifically give the IP of my machine. It shows the protocols. It shows what are the different ports which you have used for these services. For example, RDP or SSH, which shows 22. You have ICMP, STTP and STTPS. Now anytime, if you would want to make. make a change to these rules that can be done by going into your network details and say for example you would want to work on firewall rules. So we have these
firewall rules here you can click on this one so right now we are looking into the network domain and we are looking into VPC network right and this shows me what are the different rules we have now if I would want to create a different firewall rule for a different protocol I can always click on create firewall rule I can give it a name okay I can say
What if you would want to turn all the firewall logs, you can basically say what is the kind of traffic. So ingress applies to incoming traffic and egress applies to outgoing traffic.
And you can then basically choose what are the IP ranges from where you want that connection to be coming in or to going out. You can choose a particular protocol. You can give a protocol here with comma separated values and you can create a firewall rule. So this might be required depending on the services which you are running wherein you might want to enable your access to your machine from an external service or to an external service or to an external. service. So you can always go to network details from here. You can then go into firewall rules, create a firewall rule, apply that to your instance and restart your instance. So as of now, we don't need to create any network details here.
because my ingress or egress rules are already available right now I can basically then have my instance stopped and removed so I can just do a stop or since this is running the ideal way would be to do a stop I could also do a reset now what does reset do reset does not basically delete the machine what it does is it does a cleanup of the machine and it brings it to the initial state so sometimes we might have installed certain things on our machine we will would want to clean them up and at that time reset can be useful I can basically click on delete right and I can select this and I can do a cleanup and this is good always when you are using a free trial account try to use
use different services, play around with them, and then you can clean up so that you do not waste your free billing credit, right? And you can use it for meaningful stuff.
Now, I have clicked on delete and within a few seconds, my instance which I had created will be deleted. Also to remember is if you are creating multiple instances,
then you can connect from one machine to other machine using SSH by using the private file. So for that we can learn in detail later. So this is just a simple example of using your compute engine, creating your instances, connecting to it from an internal SSH or from an external SSH client such as Puti, where you have already created your private and public keys.
Now, I can click on the browser here and then I can basically come out and I can basically be looking into any particular service. So we just looked into compute engine, right? You have different other options. You have instance groups. You have instance templates. For example, let's click on instance templates here. And that basically shows you that you don't have any instance template. And this basically facilitates. Say, for example, you are working as an admin and you would want to create an instance template. So that using that you can describe a VM instance and then you can basically use this template to create different instances. You can go for sole tenant nodes. You can look for machine images.
can also look at your desks, you can create a snapshot, and you can look at different options here. Now let's come back here and let's click on home, and that should take you back to your home page, which basically shows you if a particular API, which you have used recently, which shows me in the graph here,
So I can go to the API's overview, right? And that basically shows me if there were any errors, if I was using the compute engine API to basically create a VM instance. And that's why we were seeing some spike in the graph.
So this is a quick demo of using your compute engine service provided by Google Cloud, wherein you can create VM instances and use those VM instances for your application installation for any other purpose.
Now that we have seen how you use your Cloud Console to create an instance and also clean it up. Let's also understand how you can do using your command line options and let's see what it takes or what are the different commands which you can use to create your instances.
Now, you can always, when you're creating an instance, you can use compute engine which provisions resources to start the instance. So instance basically has different states which we can see when we are creating the instance.
So you basically start the instance, instance moves into staging that is prepared for your first boot.
Finally, it boots up and then it moves into running. So when you look at instance states, which we will create instance and see, it will basically have different states such as provisioning where resources are being allocated for instance, but instances not yet running. Then it goes into staging where resources have been acquired and instance is being prepared for your first boot. Then instance is booting up and running. And if you are stopping an instance. instance, it goes into being stopped status and it would be moved to the terminated option. You can also do a repairing of instance and finally you can terminate your instance or clean it up by stopping.
and then deleting it.
Now when you say stopping and resetting an instance, you can stop the instance as I showed earlier if you no longer need it. But if you need for future use, you can just use the reset option, which will basically wipe the contents of instance or any application state. And then finally, you can stop it and have it terminated.
Now, when you would want to do that using your Cloud Console, we have seen the options. Now, let's also see from the command line tool, how you can do it.
So here I have the Cloud Shell, which I brought up from here, and I basically opened it in a new window. So Command Line tool enables you to easily manage your compute engine resources in a friendlier format than using your compute engine API. Now, GCloud, which is part of Cloud SDK, is the main command here, and then you can always auto-complete the different options here. So when you would want to create or work on GCloud, you can just type in G Cloud here.
And then, for example, I could just say help to see different options of GCloud, which will show me different options which you can use here. Now, we would be interested in compute instances. So I could also do a G cloud compute.
compute instances and then I can basically say create and then I can do a help. Now that should show me different options which work with GCloud compute instances create command which is expecting an instance name.
So your Google Cloud SDK, which we can set up on our Windows machine or even on your Linux machine, is set of tools that helps you to manage resources and applications.
hosted on your GCP, that is your Google Cloud platform. Now here you have options such as GCloud, which I'm showing you right now, you have GSTUTil, and then you have BQ. So that also can be used. So you can set up a Google Cloud compute if using GCloud.
Now, what we can do is if we are setting up our SDK on our Windows machine, then we would have to do a G Cloud Init, which basically initializes your configurations for G Cloud.
Now here we are using a Cloud Shell which was started from the console and we don't have to basically give your G Cloud Innet command because it's already initialized.
Now you can always look at your default zone, you can look at your region, what is being used, all those things are coming from the metadata which is being used. So for example, I could be looking at the metadata for my particular project by just doing a G Cloud and then I can say compute
and I would be interested in project info
So I can just do a project minus info.
And then I can do a describe. And then I need my project ID. So I can say minus, minus project. And I can get my project ID from here. So you can click on this one. And that's my project ID. So I can click on this one.
And here I can just do a right click and if it does not paste then you can do a control V.
And then I can try to look at my project info. So this basically will give me the metadata, which is by default set. And we can always look at what are the regions or what is the zone which has been set. So if it has been set. So I'm looking at my details, it is showing me my SSH keys.
and then it can be using your default region and your default available zones. It also shows my username and other details.
So this is basically to look at the metadata which is available. Now at any point of time, I can basically say add metadata. I can basically choose metadata option and I can say my default region should be Europe
which I was choosing earlier. So I can just bring up this command again. And what I can do is I can say here, where I have GCloud Compute Project Info, where I did it describe earlier. Now what I could also do is I can just say add metadata.
And then I can specify what is the metadata I would be interested in adding. I can then say Google compute.
default region and then I can basically give a region for example Europe and then I can say West 3
And if you are not well experienced, you can always do it from console or you can be doing it from here. So I'm giving Google Cloud Compute Google Compute default region. Then I can also give a Google Compute default zone.
And then I can pass in a value for default zone, so I can say Europe ,
where's three
And then basically I can give an availability zone.
So if
It is basically giving me some error where I'm trying to pass in these values. So I can just give it this way. And then it basically says that if you can look into particular help to see what is the command, which you would have to do.
Now, I can basically do a G Cloud
In it here, initial configuration, and this basically says that it is initializing my
default configuration, it says re-initialize this configuration from Cloud Shell.
you want to create a new configuration. So if I had updated my metadata,
Then basically I could just do a crowd in it.
and I could be re-initializing my default configuration or properties which I have passed in. So as of now, I will not activate or change the default region. Let's go for a simple way in which you can create your compute engine. So for example, I'll just say one and it is re-initializing. It asks me what is the user name and let's select that. It says what is the project.
and let's select that and do you want to configure a default compute region and zone right and I will just say yes
And basically then it shows me different options which we have here.
So there are too many options here and then here we were interested in
Europe West 3, so let's choose 21, right? And then that basically allows me to choose my region and my zone. So it also gives you some specification. So it says your project default compute zone has been set to Europe West 3A. You can change it by running GCloud config set and you can give a compute zone.
Right? So I can always give these commands. I can get help information here. So I can just say GCloud config set and I can be specifying the compute zone. So I can say compute slash zone and I can give a zone. I can say compute slash region and I can give a region name if I would want to do it or the easier ways like what I did right now. So you can basically do a command GCloud in it and then basically it allows you to change your configuration or set
default things here. You can all the times you can say G Cloud config unset
to basically remove a compute zone or a compute region.
Now, there are different ways. So if you were working on a Linux machine, you could always use an export command, something like this. So you could do export, compute, sorry, cloud SDK, and then you can say compute underscore zone, and then give your zone name or compute underscore region and give your region. Or you could add it in your bash RC file, right? Now, that is when you have your cloud SDK. set up on your Linux machine or on Windows machine, and you would want to specifically set a zone and a region for all your compute-related resources.
So we don't need to do that. The default settings are already given here, right? And what we can do is we can start by quickly looking into
G Cloud Compute Instances Options. So I can say GCloud, compute, compute,
instances and then I can just do a list at any point of time if you would need help you can just do a G cloud compute and then say minus minus help or I could just do a G cloud compute and that shows me different options which I have here from which I use instances. I can always type instances and again hit enter and it shows me different options what you would want to do so I can initially just type list which should show me what are the list.
What are the instances available? And as of now, we don't have any instances. I can always do a list and then I can specify minus minus format and then try to get the information in a JSON format or ML or minus format text.
So you can always do a list, you can do a filter. So there are different options with your list and you can try doing a help here and that basically shows you what are the options.
So for example, if I do a help and it shows me with list, what are the things you can do? So you can give a name. You can give a regular expression. You can say in particular zone. You can use a minus filter. So there are different commands which are available and you can always find all those options here as I showed you earlier. So now what we would be interested in is basically going for your compute instances. I can always do a SSH. I can create an instance
I can add and remove metadata, right, for my instances.
by giving a particular zone, by giving a particular region, and if you would want to do that. Now here, what we can do is we can basically create an instance by just giving a name to that particular instance.
and we can then go back to our console and see what has it done. So I can say,
Here, create. So that's an option. Let's see. What does the create do? So it says, okay, you are giving a create option, but you would have to give a name.
So let's say, let's call it E1, and that will be the name of my instance. And this one is an easy command from your Cloud Shell, which basically creates an instance. You see the zone which has been set.
It is a standard machine type, it is not preemptible, it has an internal IP and it has an external IP.
Now I have created an instance and here I can just go back and then I can just do a refresh on this page and that already shows me the instance which I've created and then you can use the same method to connect to it using an SSH. So I have an instance created from my Cloud Shell.
And what I can do is I can basically look into instances and see what are the different options with instance. So if we did a create,
Right? You have an option delete.
We did I create, you have an option delete. You can be in deleting the instance from the command line, or you can use other options. So you can do a list, you can do a stop,
You can start. So I can basically do a stop and let's say even. Let's go ahead and do a stop. Commands are pretty easy here to remember or you can always use the help option. And now I'm trying to stop the instance and then basically I can go ahead and delete it.
So this is a simple way where I created a instance from the command line or from the console which I showed earlier. And similarly, you can be working with other options.
So now I've created stop the instance. Let's do a listing to see if my instance shows up. It shows up, right, and it says the status is terminated. So you have stopped it.
It's in the terminated status and now what I can do is I can go ahead and delete it and
So it says this will be lost. Are you sure you would want to continue? Just say yes and that should take care of deleting your instance.
So this is a quick demo on creating your instance. We have already seen how you can connect to these instances using SSH.
Now that we have created instances, let's also see how to use Google Cloud's storage service, which can be used to load data
or upload data. So for this, we will have to look into your Google Cloud Storage options. And here you can look in Cloud Storage. So let's go back here on the top.
which shows me different services which we have here. And let's look into storage. So this one shows me your storage option.
Now you can click on browser and that basically shows me your storage browser which shows me on the top. You have options for creating a bucket.
Now, Google Cloud Storage allows you to store any kind of data here. The easiest and the simplest way would be by using Cloud Console, although you can again use Cloud Shell and in that you can use your GS Util Command.
and GSUTil basically has different options where you can be
using, say for example, I would want to work on buckets. So I can be using MB and then I can use my command line option to create buckets. I can put in data there, I can browse it and I can access the data from command line.
So let's create a bucket here.
Click on this, let's give it a name. So let's say my data important. That's the name. Now, I can click on continue straightaway. I can look into all of these options if I'm interested in.
So you can basically be looking at your monthly cost estimate in the beginning. Now I can click on continue or you can say choose where to store your data and this one shows you different options so you have region specific.
So let's also give the bucket name with all lowercase. That's what is required. Yeah. So coming back to the location type, you can choose multi-region, which basically allows high availability. So your bucket or your storage option will be accessible across regions.
You can also give dual region and high availability and low latency across two regions. I can also say region specific. So for our use case, we can just give region specific, which can keep our cost low. But in business use cases, you would be going for multi-region. Now here you have location and I would again go for, say, Europe .
And let's choose Europe , West 3, Frankfurt. It is always a good practice that when you create your instances, when you create your storage, or you use different services, try to have a geographical region chosen, and then you would try to put things or your services within the particular region, within a particular zone, unless you would want to make it accessible and available across regions.
Now, I can then choose a default storage class. So when you say default storage class, there are different storage class and each one is for a different use case. So you have standard which is best for short term storage and frequently access data. You have near line. So this is basically best for backups and data access less than once a month. You can also have cold lines. So these are basically like your cold storage or freezing storage, which you might have heard generally as terms. So you can choose one of these storage classes depending on what will be the use case for this particular storage bucket. So let it be standard. Now how to control access to objects. So you can basically say specify access to
individual objects by using object level permissions,
Now you can give permissions to the bucket. You can just say
uniform access to all objects in the bucket by using only bucket level permissions. So you can choose that. You can also go into advanced settings and here you can see different ways in which you can have configuration setup. Now you can also have a retention policy to specify the minimum duration where that this bucket's object must be protected from deletion and you can set a retention policy. We will not get into all that. We will just first try creating a bucket.
So just click on create and that should create your bucket wherein I have my bucket. Now I can click on overview to see the details, what is the region,
which region it belongs, what is the storage class. Anytime you can always click on Edit Bucket and make some changes here.
You can look at the permissions. So bucket users find the access, allowing you to specify access to individual objects. And then you can basically look at who has access to this. So in my case,
editors of the project they basically are the bucket owners
owners of project, viewers of the project, right? And you can basically choose what kind of access you need. So for this, you can always go into cloud storage and then you can decide what kind of access you would want to give, whether that's a storage admin, it's an object admin, object creator, object viewer, and so on.
You can always look at storage legacy.
and for any other services depending on what APIs you have enabled right you can always control your omissions so right now it is storage legacy bucket reader and that's fine and this one is bucket owner and then might be i was using some other services like data proc which uses cloud storage and that's why i have given data's prox service agent also so these are some of the members you can remove
You can view by specific members, you can view by roles. So what are the different roles which have access to this? So it says storage legacy bucket owner. There are two owners.
based on this particular project. So these are auto controlled, but then you can add or remove machines. You can save storage costs by adding a lifecycle rule to delete objects after the duration of current retention policy. So you can add different policies.
and you can basically control your bucket. Now, my bucket is already created, right? So I can go back and then I see my bucket is already here. I can click on this option and you can anytime edit the bucket permissions. You can edit the labels, the default storage class. You can just go ahead and delete the bucket. You can export it to Cloud Pub Sub. So basically, if you would want to have the content from this bucket being accessible in a message queuing system, you can go for Pub Sub, you can process with cloud functions and you can scan with cloud data loss prevention. So there are different options which are available. We can always select this bucket and delete it. Now I can click on the bucket.
And that basically shows me different ways in which I can upload some data here. So I can just click on upload files and here, then I can choose some files. So for example, I'll go in here, I'll go into data sets and I have different data sets. So for example, let's choose this one, which is a CSV file. And then I'm just uploading this to my cloud storage, right? It's as simple as this. So you can drag and drop your files or you can just upload your files. And
and my file is uploaded here. Now I can basically edit permissions for this one, right? So this is in the bucket. So anyone who has access to this bucket can basically download this file. They can copy, move or rename this. You can export it and you can look at the permissions of this file. So let's look at edit permissions and it says,
For this project, whoever is the owner, it has access. I've also given a specific user, my Gmail ID, and I've given access. So at any point of time, you can just say add item and then you can start giving different kind of accesses.
So let's click on cancel here. Now my data is already uploaded into this particular bucket. And that's a simple usage of your cloud storage. Now what we can also do is I can basically select this and I can delete it. I can also create specific folders and then basically load data into it. I can click on this one. I can just do it download and then I can download it anyway. on my machine so let's go to desktop and let's download this file so we not only uploaded some content in the bucket but we also downloaded that in a different location which will be accessible now what I could have also done is
I could have created a folder here and I could have specified, say for example, immediate data.
Okay, and I'm clicking on this one. So that's my immediate data. I can click on this one and now
I can upload my data specifically to this particular folder. By using the same mechanism, you can just do upload file. Let's choose Air Passengers. Let's do A open and my file will be uploaded.
So you can always choose what is the retention expiry date for this one. So as of now, there is nothing, right? But you can be deleted. Objects can be deleted or modified until there is a minimum duration. You can control all of that. You can basically download it, right? You can copy it and you can move it and rename it.
So this is a simple example where I created a particular bucket, right? Now, if for example you click on this transfer, so it says cloud storage data transfer products have moved,
You can now find storage transfer service on premise data and transfer appliance in new data transfer section, right? So you can always go back
to cloud storage. You can also look at transfer options which are mainly when you are using a on-premise service and you would want to upload data in a Google Cloud. So this is my bucket here. Now I can go to Cloud Console and here what I can do is if I would be interested in working so I can just say G as Util, right, and then we have for example let's try a help okay and that basically shows me my Gs Util. Now you can always go to quick start Gs Util tool and this is one more way wherein basically you can do it from the command line. So working with buckets. So you can do a Gs Util Mb minus B.
and then on a particular zone if you would be interested in and then you can say g s colon and give a name so my awesome bucket this is how you will create a bucket
which will show you it is creating a bucket and then basically you can upload an image or some data from internet you can just do a w get download the file and then you can just do a gs utile copy command and that basically will pick up the file from your cloud shell location put it in your bucket
Once you have done that, you can always do a copy.
Right. So here you are doing a copy from your local machine, that is your Cloud Shell machine to your bucket, and you can do the reverse of that. That is, you can do a copy and you can point your bucket and the file and download it to your desktop. So you can just download that using the command line.
and you can copy the object to a folder in the bucket. So that is by creating a particular folder.
and you are pushing the file into a particular bucket. You can list the contents of a bucket using LS and then give your bucket name. So G.S. So we can just try this one to be simple and rest. You guys can try. So here you can just do a Gs Util.
You can do a LSGS colon slash slash and then I need to give my bucket name. So in my case, the bucket name was my data important. So let's try that. So let's say my data important and I'm trying to list the bucket and the content it has. Right. And then you have a folder and then you can look into the folder and look into the files.
So this is a simple quick option wherein you can use your Cloud Shell. You could be using your Google Cloud SDK from your local machine or you can be using Cloud Console to create a bucket, upload some data on it, download the data, see if the data is accessible and that basically shows you the power of Cloud Storage where you can easily upload any kind of data. Now, what we can also do is as you're using a free account or even a paid account unless and until you would want to keep the bucket, you can select it and you can just go ahead and delete it. So this will basically ask you to key in the bucket name and let's say my data important. You need to confirm your bucket name.
Click on Confirm and you could have done that using GS Util and a delete command from the command line that is from Cloud Shell. So we have now created a bucket. We have uploaded some data into it. We saw how you can download it or create a folder and upload some specific data into it. And also you can do the same thing using GS Util tools.
wherein you can list your bucket, create your buckets, delete it, create some folders into it, and do everything from the command line. So this is in simple way you can use your GCP where either you can spin up your machines or you can use cloud storage to basically use a storage or a easy to use instance on Google Cloud Platform. Welcome to this tutorial about Google Cloud Platform.
And here we will learn about cloud computing. What is cloud computing? What is GCP?
That is your Google Cloud Platform. What are the benefits of Google Cloud Platform and what are its different services?
a little bit about Google's infrastructure, a comparison of different cloud providers,
such as Google offering GCP, that is Google's cloud platform, Amazon offering Amazon Web Services, and Microsoft, which offers Azure. We will also learn about Domino's Pizza use case and then have a quick demo on using some of the services on GCP.
Before we begin, let's understand why cloud computing.
And it would be always good to learn about cloud computing based on a use case. There are varied use cases where organizations are adopting or moving
their solutions or their infrastructure into cloud, or I can simply say integrating with cloud. Now here is one use case. Nina started a company that relates to website development.
The challenges which Nina was facing were low memory space whenever required for processing or for any other kind of application related work, high traffic to website that crashed it, and also less number of servers.
Now, with these challenges, she was then referred to concept of cloud computing and how that could benefit and help her in solving her issues.
Most of her issues were solved
When she started using cloud computing and with cloud computing, she could increase her memory space as required, that is on demand, control the load to the website. That is basically load balancing and handling more requests on the website or requests per minute.
buying servers at a lower price that is scaling up or down based on the requirement
When we talk about cloud computing, cloud computing is use of hardware and software components which a cloud provider offers as a service which can be accessed over network.
Cloud computing is use of these resources which could be either dedicated resources or coming from a pool of resources which cloud provider offers to deliver a service to clients.
Users can access these different services, applications, files from any device which can basically access internet.
Cloud computing allows automatic software integration. It allows backing up and restoring of data.
It basically offers unlimited storage, memory or computation capacity.
It gives access to reliable sources which usually the cloud provider themselves are using for their use case.
And it is a cost efficient model which helps organizations to quickly integrate or basically modernize their infrastructure.
Cloud computing is usually used with IT or within IT space wherein there are five traits.
if there is a requirement of resources
as the business dynamically changes or grows. So for this cloud computing offers on demand self-service,
So users could be using on-demand computing resources or memory resources, storage, network and so on provided by cloud provider and also do a self-service.
All this is possible using a simple interface and users can be using processing power storage network as they need and pay as they go. So there is least or no human intervention required.
When it comes to projects which might need scalable network access,
Cloud computing offers broad network access that is accessing the sources over network across geographical regions or what we call as availability zones which might be multiple sites within a particular geographical region.
Cloud providers also have what we call as resource pooling. So this basically provides a huge pool of resources.
which are shared and can be accessed by customers at a lower cost. Now there might be customers which are interested in not sharing the resources and would be interested in dedicated resources. And in this case, cloud provider also have sole tenant offerings which help such customers.
If an IT business or any other business needs rapid elasticity,
Then cloud providers also have resources.
which are offered which are elastic
You can get more resources rapidly as needed and thus you can scale up and down.
Think of a gaming company which would be interested in launching a new game and they would have predicted a certain number of users which would get onto the portal playing the game and what happens if the request per minute or if the number of users who are joining in might increase
Now in this case, organization would want an underlying solution which handles this dynamism scales as needed on demand and once the demand is done scales down.
This is possible using a cloud computing solution.
Cloud computing solutions also include measured services that is pay as you go model for the usage or for the reservations which a user or organization would have made for resources offered by cloud computing. So when we talk about cloud computing, one of the questions which always arises is,
Why is this model so compelling? Why is this so interesting for organizations or users who would want to use one or many services from cloud computing? So first wave of trend which brought storage cloud computing was what we call as co-lo, that is co-location.
IT shops that have been using or managing huge amount of data from decades basically wanted to build
their infrastructures to handle their business needs. Now, instead of building costlier data centers, they would rent space or share facilities. And this was being done by organizations even in past.
Thus, they would free up the capital for other use cases.
Now, this was more of user configured, managed, and maintained by them. Later, organizations started thinking of virtualization.
So that was again user configured, but provider managed and maintained
So components of a virtualized data center matched that of a physical data center and organizations would have virtual devices separately managed from underlying devices.
Then later came container-based architectures or basically automated services.
So within Google, services are automatically provisioned and configured
letting your infrastructure scale on demand. There are various reasons why an organization would think of integrating with cloud or benefiting by using cloud and thus
instantaneously reaping the benefits of modernizing their infrastructure.
Now, few famous cloud providers are here. So you have Amazon, which offers Amazon Web Services and a huge list of services.
which come in with this.
You have Microsoft's Azure, you have Oracle's Cloud, you have SAP's Cloud Solutions, GCP, which is offered by Google, Salesforce, and so on. There are many other small players which are also providing different services which are cloud-based or organizations which are partnering with these main cloud providers, thus offering cloud services to their customers.
When we talk about why Google Cloud Platform, there are various reasons why someone would choose Google Cloud Platform.
GCP has better pricing compared to its competitors.
When it comes to speed and performance, it is very fast and increases the performance of the project.
Live migration of apps and there are huge number of solutions which I will show you further and for the screens which help an organization to adopt to a cloud platform and integrated with cloud platform or even completely migrate into a cloud platform.
None of Google's competitors provide live migration of apps.
When we talk about big data, AI, machine learning kind of solutions, GCP provides a lot of innovative solutions in comparison to other cloud providers such as AWS, Azure and so on.
So what is Google Cloud Platform? It has a set of cloud computing services.
provided by Google that runs on the same infrastructure that Google uses to and for its end user products like YouTube, Gmail and so on.
Let's learn about benefits of Google Cloud Platform.
such as high productivity,
working from anywhere, quick collaboration, high security, fewer data stored on vulnerable devices, reliable resources which can be used across organization, across geographical regions, across countries,
very flexible which allows organizations to scale up and down as the demand rises or as the demand declines.
and cost-effective solutions for various use cases. These are some of the benefits. And if we look into different services which Google Cloud Platform offers,
We could look into detailed benefits which each service offers in a different use case, which basically helps organizations working in different domains, handling different kind of small, mid or larger businesses and with different business goals.
When we talk about Google Cloud Platform Services, here is a list of services or I could say high level domains or categories of services.
So you have compute related services, you have storage and database, you have networking, big data, developer tools, identity and security management, internet of things, cloud AI management tools, and also data transfer solutions.
When we talk about Google's infrastructure, Google has one of the most powerful infrastructure in the world.
The infrastructure is available in two levels, the physical and the abstract layers. You have physical infrastructure and then you have the abstract infrastructure.
Physical infrastructure consists of data centers, extensive development of high efficiency back end data centers.
You have a very strong backbone network which is used by Google itself and also offered as services to customers via GCP platform services.
So you have global Mest redundant backbone network.
Points of presence, when we talk about Google, it has 110 plus edge points of presence in more than 200 countries. And when we talk about edge caching, edge caching platform at periphery of their network.
So this is what defines the physical infrastructure of Google. Now there is much more to it rather than just these four points. When we talk about abstract infrastructure, that is divided in global regions and zones.
When we talk about zone, a zone is roughly equivalent to a data center.
and a single point of failure. So you could have your compute engine,
which is within a zone or you could say computer engine is a zonal resource. You have regions which are geographical areas which contain multiple zones.
So you would have a region for US Central or Europe Central, Europe West and so on. And within a region, you would have one or multiple zones. And zones basically would allow high availability of resources.
So you have cloud load balancer as an example which is regional resource. Then you have global resources and they are available and shared across the planet.
So you have various global resources such as network, which could be even your IP addresses and so on.
Now let's do a quick comparison of AWS West Azure West GCP and let's look at what each cloud provider offers. Later we will also look into different services in detail when it comes to Google Cloud Platform what each service does.
What you can benefit from, which service should you use in what case? We will learn about those in later slides.
If I compare your different cloud providers,
When we talk about Amazon,
and it's cloud offerings that is Amazon Web Services or AWS as we well know it.
Amazon Web Services has 69 availability zones within 22 geographical locations and soon it will have 12 more in future. So this number keeps growing based on the spread of the services which a particular cloud provider offers.
Here we are talking about availability zone specific information. When we talk about Microsoft Azure, it has 54 regions worldwide and is available in 140 countries across the globe.
When we talk about Google Cloud, Google Cloud platform is available in 200 plus countries across the globe.
When we talk about virtual servers, Amazon's EC2, that is Elastic Compute Cloud,
It is a web service which basically helps to resize your compute capacity where you can run your application programs on a virtual machine.
So using EC2 service, you could launch virtual instances that could have any distribution of Linux, Windows, you could have different specifications when it comes to RAM or CPU course or disk. You could also decide on what kind of storage a particular instance should use.
whether the storage should be local to the instance or whether that should be an elastic file system or even an object storage.
When it comes to Azure or Microsoft's offering as your virtual machine, that is infrastructure as a service gives a user the ability to deploy and manage a virtual environment inside a virtual network on the cloud.
And this virtual network on the cloud would be managed by cloud provider.
Google Cloud or the offerings from Google Cloud Platform, that is GCP VM instances, enables users to build, deploy and manage virtual machines in order to run different kind of workloads on the cloud.
Now when we talk about compute engine, here it would be good to discuss a little bit more about compute engine and what are the different options which Google Cloud offers. So when you talk about your compute engine,
You have scalable, high performance virtual machines.
Computer Engine delivers configurable virtual machines which run in Google's data center with access to high performance, networking infrastructure, and block storage. And you could select VMs for your needs.
That could be general purpose or workload optimized. And when we talk about workload optimized, you have predefined machines or you have custom machine sizes.
You can integrate compute with other Google Cloud services such as AI or ML and go for your data analytics. You have, when we talk about your GCP VM instances, just to expand on that, you have general purpose instances which we call as N2.
which provide a balance between price and performance and they are well suited for most workloads, including line of business applications, web servers, and databases.
Google Cloud also offers compute optimized instances
which we call a C2 instances.
which offer consistent high-end virtual CPU performance
which are good for AAA Gaming, EDA, HBC, and other applications.
Now, when we talk about compute optimize your general purpose, how would we leave
memory optimized instances. Those are M2 machines which Google offers. So these offer highest amount of memory. These VMs are well suited for in-memory databases such as SAP HANA, real-time analytics, and in-memory caches. So if I would summarize this when we talk about
different instances, AWS,
also offers different kind of instances which are memory or compute
or
disk optimized, you have general purpose and each category of machines has a different pricing model. You can always go to an AWS website, look for the pricing models, and that will give you an idea of on-demand instances or dedicated instances, reserved instances and so on. Similarly, if you talk about Google Cloud, Google Cloud also has instances with
various options which become the key features of why customers would choose Google Cloud Platform, such as live migration for VMs.
So compute engine within your GCP can live migrate between host systems. And when I say live migrate, it basically means without rebooting, which keeps your application running even when the underlying host systems require maintenance.
You also have preemptible
virtual machines wherein you can run bad jobs and fault tolerant workloads on preemptible VMs to reduce your virtual CPU and memory cost by up to 80% while getting the same performance. So these are your preemptive or preemptible virtual machines. The only deemate is these can give you a really cost efficient
resource usage however can be taken off the shelf anytime and that's why we call them preemptible virtual machines you also have sole tenant notes which are physical compute engine servers dedicated explicitly or exclusively for
Users use case.
And when we talk about sole tenant nodes, these are usually good when you are dealing with or when you're working with your applications, which we call as bring your own license applications. So sole tenant nodes give you access to same machine types and virtual machine config options as regular compute instances.
So there are different options which Google Cloud offers when it comes to these instances which we are talking about and it takes care of different use cases in comparison to other cloud providers which are also offering these services such as you can have predefined machine types, you can have custom machine types, preemptible VMs, as I said, live migration of VMs. You can use persistent disks which could give you durable high performance block storage. You have local SSTs. You also have GPU accelerators which can be added to accelerate computational intensive workloads such as machine learning, simulation, medical and
analysis and so on. And you have features such as global load balancing, which makes Google Cloud a unique choice.
When we talk about platform as a service, Amazon has platform as a service offering, which we call as elastic beanstock among one of its services. It's an orchestration service for deploying applications and helping in maintaining these applications.
Azure Cloud Service provides a platform to write the user application code without worrying about the hardware resources. Google App Engine is a service used by developers for building and hosting applications on Google's data centers.
When we talk about server less computing,
So Amazon's AWS Lambda is a serverless compute service. It is used to execute back in code and scales automatically when required. When we talk about Azure, you have something called as functions which allow users
to build applications using serverless simple functions with a programming language of their choice.
When we talk about Google Cloud,
GCP has cloud functions which is easiest way to run your code in the cloud and it is highly available and fault tolerant
So in these days, when we are talking about microservices architecture, which organizations are prefering, when we are talking about organizations which can scale, which can dynamically change their underlying architecture, organizations would be interested in serverless computing where they do not have to have a infrastructure setup.
planned in advance before going for their use case and this is where monolithic applications are really not a preferred choice.
A lot of organizations are decomposing their applications into microservices based on
business capability or decomposing based on subdomains. We can learn about microservices architecture later, but just to know that serverless computing
which basically helps any organization. For example, if you have a web application that receives nonlinear traffic and you cannot keep an eye on your server always.
it would be good to have someone to auto scale your application
Serverless is basically a computing model where cloud service provider is responsible for managing the piece of code without the developer having to bother about infrastructure, setup, management, maintenance and so on.
Now, when we talk about applications being serverless or benefiting from serverless computing, one of the key things would be zero administration. So deploying application without any provisioning and management, auto scaling capability, that is, let the service provider worry about
scaling the application up and down.
You have pay per use model which any customer would want to benefit from. That is pay only for the resources that you have used or that you are continuing to use, right? Shorten the time between idea implementation and employment and this is something which any organization would want that
you would want a faster bring to the market solution timeline in comparison to getting entangled with deployment, management and maintenance of your underlying infrastructure when your applications are facing a high demand.
So when we talk about serverless, it is a function as a service because each part of your application is divided as functions and can be hosted over multiple service providers.
You have serverless apps which are usually divided at separate units or functions based on functionalities or domains and so on. So serverless computing is gaining quite popularity these days.
in comparison to the traditional three-tier architecture,
where you had a presentation layer, you had an application layer, you have a database layer, now that kind of infrastructure is not really preferred in today's modern times when organizations are working on different kinds of newer applications.
When we talk about object storage, Amazon has simple storage service that is S3. It provides object storage, which is built for storing and recovering information or data from anywhere over the internet.
as your
comes up with blob storage, that is binary large objects. Storage offers large amount of storage and scalability. It stores the object in the tiers and depending on how often the data is being accessed. Now, same thing applies to even S3, which is from Amazon. So S3 also has different kind of storage classes.
which can be selected when a user or an organization intends to use a storage service. And when I speak about storage classes, it basically means having a frequent access storage or an infrequent access storage or what we call as just an archival solution.
Google Cloud has cloud storage and it provides unified object storage for live or archive data. The service is used to store and access data on GCP infrastructure.
When it comes to advantages, Amazon Web Services has enterprise-friendly services, easy access to resources, increase in speed and agility, and that too on-demand, and takes care of your security and reliability of resources which are offered.
When it comes to Azure, it has better development operations, strong security profile, provides a lot of cost-effective solutions and operation execution-friendly.
When we talk about Google Cloud, one of the key features here is better pricing than competitors.
Live migration of virtual machines which really interests a lot of organizations would want to modernize their infrastructure without having any kind of disruption in their existing services, improved performance, redundant backups and so on.
When it comes to disadvantages in AWS, you have limitations when it comes to EC2 service. Well, there are different options in the kind of machines which you can choose, which you can work on. You have a technical support fee, which is incurred, network connectivity, and then also downtime, which might be in case when you're migrating.
Azure, it has different code base for Cloud and Premise. Platform as a service ecosystem is not really as efficient as infrastructure as a service, poor management of GUI and tools, integrated backups.
When we talk about Google Cloud, support fee is quite hefty. It depends on what kind of solution or support you would or organization would be interested in. It has a complex pricing schema.
although it has different use cases for which any user or any organization can benefit from
Downloading data from Google Cloud Services is an expensive option. Storage might not be. However, uploading data or downloading data would be an expensive option.
When we talk about Domino's Pisa use case, now while we were discussing over these features, I would really want to spend more time in discussing each of these features or services in detail, such as you have compute engine, you have storage, you have Big Table, you have data proc and so on. So there are a huge list of services. Now before we get into your Domino's Pisa use case, let me show you this page on Google Cloud. where you can
look at different services. So if you go to cloud. Google.com and if you look at
Get started option under doc. So here you can find build solutions, look at different use cases, learn from basics of what is your Google Cloud, what are Cloud basics. Then you can look at different cloud products.
So here you have products in different categories such as AI and machine learning, API management, compute, containers, data analytics, databases, developer tools and so on. And you can always click on.
any one of these to look into different solutions which are being offered what are the different use cases what are the best practices when it comes to migrating VMs to compute engine or operating containers or building containers and so on you can always look at featured products and that gives you a quick snapshot of what are the different products
such as you have compute engine, you have Cloud Run, Big Query, which is a data warehouse, you have Cloud SQL, which is a Manage, MySQL Postgres, you have cloud storage to basically push in any kind of data there, you have security key enforcement, AI and machine learning, and so on. So you have different feature products. Now if you scroll down,
to the lower end of this page, you can again look at
different solutions and that would be really interesting to read and learn from. So you have infrastructure modernization, you have application modernization, you have data management and so on. So if I look at
infrastructure modernization
You could basically look at the solutions which Google Cloud offers.
and what it does when it comes to having your
infrastructure modernized or benefiting by integrating with cloud
and having immediate benefits of infrastructure modernization. You can look at different use cases, what they are doing, how Google Cloud really helps when it comes to migrating the workloads to a cloud.
and how your different cloud solutions such as VM migration, you have SAP on Google Cloud, VMware as a service and so on, and you could learn from these different solutions which are offered. You can also look at application modernization. So not only infrastructure modernization, but organizations would also be interested in re-looking at their applications, re-looking at how these applications
could be moved from monolithic to microservices architecture or how applications can benefit from modernization and cloud computing offerings. So you have again different use cases here.
which talks about different ways in which Google Cloud can help, how you can modernize your applications, how you can use different solutions which Google Cloud is offering. Now, when you talk about cloud computing services, you can always go into
Cloud. Google.com. If you have created a free account, then you can just log in and every user by default gets a $300 free credit.
So wherein they can try out different products where they can use different services. So here if I click on console where I'm already logged in with my Gmail account or my Google Cloud account, wherein I have...
$300 free credit out of which some is being used. You have a Google Cloud console and here from the hamburger menu you can click and you can look at different services within different domains. So you have compute domain which has different services such as app. You have compute engine and that basically allows you to use your VM instances which we were talking about previous slides.
Different instance groups, create your templates, use sole tenant nodes, create snapshots or backup of your data, use different zones. You can go for Kubernetes, which is containerized based,
Engine, you have cloud functions.
you have Cloud Run and then you have storage related different options such as Big Table, you have Data Store, Fire Store, File Store, Storage and so on. And for each of these services you can read about from the Google's documentation or anyways, I will be explaining that later.
You can also look at networking related, operation related, and other tools which are offered by Google Cloud. So these are huge list of services which Google Cloud platform offers in different ways for different use cases.
Now, let's look at this Domino's Pizzer use case and see what it helps us learn about. So you can always access this page by going to this link which talks about customers and then which shows you different use cases.
So Domino's increasing monthly revenue by 6% with Google Analytics Premium, Google Tag Manager and Google Big Query.
So this is basically when Domino's started using GCP and what was the result of that. Now let's look further into this.
So we all know that Domino is most popular PISA delivery chain operating across the globe. But how was that possible? Let's take a look.
So the challenges were they wanted to integrate marketing measurement across various devices.
connecting CRM and digital data to create a clear view of customer behavior.
To make cross-channel marketing performance analysis easy and efficient. Now, for these challenges which Domino's was facing, the solution was using Google Analytics Premium.
Google Tag Manager and BigQuery, which were used to integrate digital data sources and CRM data.
Reporting was made easier and more efficient by implementing Google Analytics premium because it had the ability to access a single Google Analytics account to evaluate web and app performance.
By using the new Google Tag Manager implementation, dominers were able to act fast.
They were able to connect CRM data with digital analytics, which basically provided Domino with greater visibility on customer behavior. What was the result? There was an immediate 6% increase in monthly revenue, 80% of costs in ad serving and operations were saved.
increases agility with streamlined tag management
They obtained easy access to powerful reporting and customized dashboards. Now that was just one simple use case. Before we go on to hands on, we can also talk a little bit
back about the services which Google Cloud offers, as we discussed, and some of these services which can really make you think
Why not Google Cloud Platform?
So when we talk about your different cloud platform services, let's learn about some of these services in brief in what each service is, what it does, and how it can help us in handling our use cases or working with different services.
products.
So let's learn briefly about different services which Google Cloud Platform offers. Now, one of the domains is compute, and then let's look at the compute services which GCP offers.
Now here I can log into the console and this hamburger menu on the top left corner I can click on this one and go into the compute engine section. So this is the compute domain which has app engine, Kubernetes engine, cloud functions and cloud run. So these are your different services which are offered within the compute domain. And here we can get into compute engine by clicking on this one and then basically going to VM instances. So before we see how we can use. use this compute engine, let's understand about some of the features of compute engine, which basically offers scalable, high performance virtual machines which are configurable and which runs in Google's data center with access to
high-performance networking infrastructure and block storage. So from here, you can select VM for your needs for your general purpose or workload optimized, predefined or custom machines. Now, here you can integrate compute with other Google Cloud services such as AI, ML, and other data analytics services. You have different machines which are offered here, such as general purpose, which provide a balance between price and performance, which are well suited for most workloads, including line of business applications, web services, and databases. You also have compute optimized machines which offer consistent high-end virtual CPU core performance
and which are mainly good for gaming, EDA, high process computing, and other such applications. Apart from general purpose compute optimized, you also have memory optimized machines which offer highest amount of memory. And these VMs are basically well suited for in-memory databases such as SAP HANA, real-time analytics, and in-memory cache. Now, we can see these options here. You can click on VM instances. while you are logged in into your Google Cloud console. Here you can even create an instance template which can be used to spin-up instances. For example, if I click on new VM instance from a template, there are some templates which I have already created.
created for my usage. Now here I can basically use one of these templates or what I can do is I can go back. I can go into instance templates.
And this basically allows me to create a template. So you can click on create instance template, which basically allows you to create templates, which can be used to spin up different instances. We can give a name to the template. For example, we can say template instance. Now here I can choose machine configurations. And this is where you have different options. So you have general purpose, as I mentioned, which provide a balance between price and performance. You have memory optimized, which are. large memory machine types for memory intensive workloads. You also have compute optimized, which basically give you high performance machine types for compute intensive workloads. So you can choose any machine configuration which is available
here based on your requirements now if you click on general purpose that has different options here so you look into the series where you have n1 series you have e2 which are CPU platform selection based on availability you have n2 and n2d so let's just have n1 selected now you also have here which talks about machine types and here we can choose the configuration which we are interested in depending on the application which will run within the machines we can choose a machine so by default it shows one virtual CPU core and 3.5 gigabyte of memory or RAM you could choose a higher end machine so as of now i'll just say n1 standard now that
basically allows me to choose these machines. So there are different features which your compute offers, such as you have live migration for VMs, you have preemptible virtual machines, you have sole tenant nodes, and all those options can be seen here. Now, in this machine for my boot disk, I can select a distribution which I would be interested in. For example, I could be going for oblique images, and I can choose, for example, Ubuntu, and then I can choose a version. So it shows me, 16.04 and you also have latest versions such as Ubuntu 20. You can choose one of these and here it asks you to choose the boot disk type. So that could be standard persistent disk, which is HDDs, which
are low in performance and you can say low in cost in comparison to SSDs. So SSDs give you better performance but then they are little expensive than using standard persistent disk. We can choose this and we can give a disk size for example 20 gigabyte and I can click on select. Before clicking on select I can click on custom images and that shows me if you have any other images created in your project you could use those. You could also learn about about images by clicking on this link. So we'll click on public images. We have chosen this distribution. Let's do a select. And now here you have identity and API access management. So let this be default. You can say allow default access.
And what you need is, depending on the services, we can choose. It allows HTTP and STTPS traffic. Now, we would also need some way to connect to these machines. So when you set up an instance, by default, you can do SSH into it using the Google Cloud Console or from Cloud Shell. You can also give a private and a public key. So here you have the option where you can give all these details. So when it comes to management, it tells you, would you want to go for reservations? And you can say automatically use created reservation. You could also say, no, you would not want to use a reservation. You can also set up or provide a startup script, which you would want to give whenever your machines
come up and here you have the options of preemptibility so compute offers preemptible virtual machines so that is mainly when you would want to run bad jobs and fault tolerant workloads on these machines and you can benefit with a reduced cost for your virtual CPU and memory by 80 percent so these are virtual machines which would be lasting less than 24 hours now by default this is off and it purely depends on your workload what you would want to run on these instances I could just go ahead and select preemptible being on that and use this feature of compute you also have on host maintenance which talks about what would be happening with this compute in
engine instance. So when compute engine performs periodic infrastructure maintenance, it can migrate your VM instances to other hardware. And this is one of the features which compute engine offers, which we call as live migration for VMs. Here, your compute engine can live migrate between host systems, that is, the underlying systems on which these VM instances are based on without rebooting, which will keep your application running even when host system require maintenance. And here it says migrate VM instance recommended and let that be as it is. You can also say that if there is a maintenance happening, you can terminate the VM instance.
Now, it also talks about automatic restart, which is on, which basically means compute engine can automatically restart VM instances if they are terminated from non-user-initiated reasons.
So these are all the settings which are available in management and it also tells us the different features which we have. There is also a feature called sold tenancy, which basically means sold tenant nodes which can be chosen. So you can have physical compute engine servers dedicated exclusively for your use. And this is usually good when you're talking about bring your own license applications. So sole tenant nodes give you access to same machine types and we have. configuration options as regular compute instances however these might be a little expensive we can choose this one we can also look into networking which basically shows the default setup which goes for auto subnet you can also
choose a particular IP if that is required but that would cost more. You can click on desks which talk about what do you want to do with the boot disk when the instance is deleted. What is the encryption mechanism you would want to use? And here finally you have security. So basically as I said you can SSH into instance using the cloud console option and you can also provide a public SSH key. So one way of doing that if you intend to use an external SSH client such as Putte to connect, you can create a key.
So for example, I can go into POTEGEN and here I can say generate. Just move my cursor over here and that will create a key. I can give a name to this one. So I'll say SDU will be username. I'll give a simple password which I will use to log in to this machine and then I can save this private key which will get saved. So let's say, HDU, new key and this gets saved in a dot ppk file which is usually used when you use an external SSH client to connect. So save this one and that saves a PPK file on your desktop. What you can also do is you can copy this public key content from here and this is what we would want
to give in our instance here so so that the public key gets stored on the instance and private key is what we will use to connect. So once I paste it here, it resolves the name to HDU and we have given the public key. Now in certain cases, you may want to use a software which uses SSH to connect to the machine and that software might not be such as your putty. So in that case, you may want a PEM file or a private. key which is saved as a dot PEM file so you can also do that by going to conversions and do export open SSH key and then save it so I'll say HDU new key but then this one will be saved as a PEM file on my
machine. So you have PPK file which allows you to use Puti to connect to the instance. You have a PEM in case a software needs directly SSH to these machines. You also have the public key which we have already provided in the machine. Now once this is done, I can close Putty Gen. I can go back to this page where I'm creating an instance template and then I can just click on create. So this has created an instance template which I can use to spin up my instances. Any number of instances using the same template. Only thing which I would have to do is change the region where I would want the instance to run. So now that we have created instance and that's my this one, the third option, I can go back to VM instance.
Now I can click on create and here I can either create an instance from scratch by giving all the details again or I can just use my template so I can click on new VM instance from a template choose my template, click on continue and once this is done I can give my instance name. So let's say C1. I can choose the region. So I will choose Frankfurt and then rest everything is auto populated based on the template what you have given and you click on. on create. Now this basically allows you to spin up an instance and you can create any number of instances using your template. You could have already created a new instance right from scratch. Now once the instance is created, this has a public IP and
a private IP. Private IP will not change unless you would want to set up a new machine, but public IP will change every time you stop and start the machine. Now this is what we need to connect to this machine. I can also do a SSH from here by doing this and open in a browser window. Let's click on this. So this is an internal way of connecting to your instance using SSH. Let's wait because it would be transferring the SSH keys to the VM. It has a single. establishes a connection and I am connected to my machine. What we can easily do is to confirm if we are in the right machine. We can just do a LS
To look at the file system, what we can also do is we can basically log in as root by doing a pseudo-su, and that allows you to get into the machine as route. And from here, I can switch to HDU user, which will have a .sSh directory in home, and that basically has authorized keys. And if we would want to see if this one contains my public key, I can just do a cat.s.S.h, and then look into authorized keys. and this shows me the public key which we had initially added to our instance.
So this confirms that we are locked into the machine which we created. Now I can close this and what I can also do is I can copy this public IP. So let's do a copy to clickboard. Now go to putee and here I will say host name where I'll say HDU give my public key. I'll click on SSH and in SSH I'll go to authentication. Now here we need to give our PPK file. So the PPK file was SDU new key. select this one come back here come to the session give it a name for example c1 save it and then you can just say open and say yes and you are locked in to your machine now once you're logged in you can always do a
as SSH and that shows you the file. So this is how you have just used the compute engine to spin up an instance, but we used a template which basically allowed me to create this instance and then I can connect to this instance and then I can start working on this. So when we talk about features of compute engine, it has predefined machine types as we saw. So compute engine offers
different predefined virtual machines and this they have configurations for every need from small general purpose instances to large memory optimized instances with up to 11.5 terabytes of RAM. You can have fast compute instances optimized up to 60 virtual CPU cores. You also have custom machine types so you can create a VM that best fits your workload and by tailoring a custom machine type to your specific need, you can realize that you can realize significant savings. There are preemptible VMs which we saw. There is also a facility which allows you to take the benefit of live migration. For VMs, you have durable high performance block storage for virtual machine instances.
the form of persistent disks where data is stored redundantly for integrity, flexibility, and to resize storage without interruption. And you could be choosing SDDs or SDDs for your instances. Now, you also have options such as GPU accelerators. So for example, if I just click on create instance and I can look into that. So here, let the instance name be instance one. And what I would be interested in looking at this one, say CPU platform and GPU. So CPU platform configuration is permanent. You can also do add GPU. So GPUs can be added to exhilarate computationally intensive workloads like machine learning, simulation, medical analysis,
and virtual workstation applications. So you can add and remove GPUs to a VM when your workload changes and pay for GPU only while using. So these are some of the features which basically compute engine offers. And we already know that Google bills in second level increments. So we only pay for the compute time. Now there are different savings which are possible. So you have commitment savings, which basically means you can. can save up to 57% with upfront cost per instance type lock-in.
You have container support. So you can basically run, manage and orchestrate Docker containers or compute engine instances. So here, when we are setting up our instances, there is an option which basically allows you to use or deploy Docker images. Now that can be done. You can also benefit from sustained use savings. That is sustained use discounts, which are automatic discounts for running compute engine resources for significant portion of the billing month. You can create a reservation for VM instance in a specific zone, which is basically seen under your management section here. And you can ensure your project has resources for future increases in demand. And if no longer needed, delete the risk.
So these are some of the features of compute engine. What we have done is we have created compute engine using the console. Now you can go back. You can also do that using Cloud Shell and you can click on this one which activates Cloud Shell. You could also have the Cloud SDK support on setup on your machine which can be used. Now I can just open this in a new window and from here I can start giving commands if I would be used. interested in setting up an instance from my command line. So here you have different options. Now to begin with, you can just do a G Cloud and just hit enter and that will show you different options which are available, which can be
used. So you have G Cloud Compute here which shows an option to create and manipulate compute engine resources. Now I can just do a Q to quit. I can do G Cloud Compute and that basically will again show me different options which are available if you would be interested in setting up instances from the command line. So here I can say G Cloud compute and then go for instances and if you do not know the commands, you can just hit Enter. That will show you all the different options which we have. So here we have different options such as list or create or start or update. For example, I can just do a list here.
to see what instances I have and the instance which we just created shows up here. It says that status is running. I can just stop this instance. I can delete this instance. I can even create an instance by using a create command here and you can just do a create help which will show you what are the different options you can give. So it says instance name is what you need. You can choose an accelerator. You can choose the boot disk and various other options. So, I can just say create and then I can give a name for example C2 and once I click on this one it says did you mean Europe West 4 zone so it is asking me for the region and the zone and I can
say yes and these settings are coming from my default profile I can always change those by changing the metadata so now we have created an instance it says running if we do a list again to see we see two instances created one was in Europe West three one was on in Europe yes West four both of them have internal and external IPs now you can do a
describe to look at the different options here. So GCloud basically allows you different commands which you can use to work with your instance, to create instances to change the metadata. If you would want to change the region, if you would want to add a startup script, all those options are possible from the command line, which we can learn in detail in later sessions.
So this is your compute engine as a service.
Now that we have learned about the compute domain and the compute services which is offered by GCP, let's also learn about storage and databases. That's again within the storage domain and the services which are offered by Google Cloud Platform. Now you can go back to console and here you can click on this one and here you can just scroll down to see what are the different options in storage. So you have options such as. is big table you have data store fire store file store you have SQL based services you have storage which is object storage and then you have other options which are available so Google Cloud platform offers different
storage-based services out of which storage which is your object storage is quite popular one click on storage and that basically shows you an option which talks about storage browser so this is your Google Cloud's object storage so when we talk about object storage it is basically a storage where you could store any kind of data and when we talk about object storage it is a bunch of bytes which we address
wherein every object will have a unique key. These unique keys are in the form of URL, which allows you to access the object. So cloud storage is comprised of what we call as buckets
which are used to store and hold your storage objects.
The storage objects are immutable and every change creates a new version. Now you can also have control access via IAM, that is identity access management or via access control list. So there is also an option called object versioning which basically says if it is on every time you try to store the same object, a new version of the object would be created. Otherwise, newer option will override old one as. we cannot archive the old version. So let's see how we work with this object storage. So here you can click on create bucket.
Now once you click on Create Bucket, it needs a name. So let's say Test Bucket.
And here I can just give, say, number one. So that says this is the name of my bucket. Now I can directly click on continue or it would be good to look at different options which are available here. So when you click on choose where to store your data, so it already gives me an option. It says the bucket name is already taken. So let me give it a unique name. So let's say test buck and let's call it.
A-U-A, so that should be unique. Now here, it says choose where to store your data.
So this one gives you location type. So you can have region specific buckets which give you lowest latency that is fastest response time within a single region. However, it does not make your storage highly available. You can make a dual region which is basically allowing your bucket or storage to be accessible across regions. You can also make it multi-region, which is highest availability offered. As of now, we can choose region-specific. Now it asks you to choose a location. Now, as always, I will choose...
Frankfurt.
Now I can click on continue and rest all the rest, let all the storage options be default or you can click on a default storage class. Now that tells you based on your storage class there are variant costs when it comes to storing, retrieving or doing any kind of operations. So you have a standard.
Option, which says best for short-term storage and frequently access data. You can also go for cold storage such as Nearline, which is best for backups and data access less than once a month. You can go for freezing storage such as cold line, best for disaster recovery and data accessed less than once a quarter, or you can go for archiving where the data is accessed less than once a year. Let's go for standard as of now, and now you can choose how to control access to objects, so you have fine, or uniform, let it be fine grained wherein, you can give additional permissions at bucket level using IAM or object level permissions using access control list.
In advanced settings, you can choose the encryption and you can also choose a retention policy. So a retention policy to specify the minimum duration that this bucket's objects must be protected from deletion or modification after they are uploaded.
You can always learn about this more by clicking here. Now, once I've chosen all the relevant options, I can click on create and that basically will create a bucket by the name I have given. I can click on overview to basically see brief details about my bucket such as region, what is the default storage class, and it also shows you the link URL, which can be used to access your bucket. It also gives you the link for GEOC. Now Gs Util is a command which can be used in your cloud shell to basically work with your buckets. You can click on permissions to basically see what kind of permissions are already in place and you can then make changes.
You can basically add members, you can view by different roles. So for example, here by default it shows other services such as data prok or your bucket owner or bucket reader related permissions which have been already granted.
now once i've looked at my bucket i can start using it i can drag and drop and push in files here so as of now there are no live objects in my
Object storage that is in my bucket. What I can do is I can click on upload files, and then I can choose a location from my machine. For example, I'll go into data sets,
And what I can do is I can choose some of the files here.
In any format, let's choose CSV or text and just to open. So this one will basically upload my datasets here.
Now once I've uploaded the files, I can basically close this one. I can look into options here which says edit permissions and edit metadata. If you would want to download it, if you would want to copy, move or rename it, if you would want to export to a different service called Cloud Pub Sub, which is Pub Subscribing Messaging System, you can scan the data. Now you can click on a particular file and that basically shows you the URL, which basically allows you to access this file. You can try copying this. You can click on download and download this file. You can even try accessing this from public, and that basically shows you the content of this file based on the permissions.
So this is basically your object storage which is one of the service which is offered. What you can also do is you can create folders and within folders you can then upload your data. So this is your Google Cloud storage option which is for your object storage. That is you can add different items. You can give different permissions and you can use this Google Cloud Platform's storage service offering. Now you also have other options such as Big Table and we can go into that by clicking here and click on Big Table. So Big Table is one of the service which kick started NoSQL databases. Today in market.
we see different no SQL databases such as Cassandra, HB, MongoDB, CouchDB, Neo4J, and many others. So you can basically use Big Table, which was the pioneer when it comes to your NoSQL databases or not only SQL databases. So the problem we need.