Google has entered into a five-year $110 million deal with OpenX, a programmatic software company, that will make it the first major online ad exchange to operate without its own server infrastructure.
The deal will allow OpenX to improve its ad exchange in five ways: speed, scalability, global reach, future-proofing and people-based marketing.
It is also a significant win for Google, which is far behind Amazon and Microsoft in global market share for providing cloud services.
Every other scaled exchange currently uses physical server locations around the world, which means they must be physically close to the marketers they power. Moving to a cloud-based system should lower maintenance costs and allow for faster innovation, and in turn greater efficiency for programmatic ad buyers on OpenX’s exchange.
Tim Cadogan, chief executive of OpenX, criticised programmatic media’s current server-based system for being "no longer sustainable".
"As we look at the programmatic market today, we see a sector that has experienced massive growth and adoption, but at the same time has stalled in its ability to deliver real innovation for marketers and publishers," Cadogan said.
"We believe it is time to take a completely fresh look at the market and place a major bet on building the infrastructure necessary to drive the next wave of innovation."
The companies expect OpenX to make the full transition to the cloud by the end of this year’s second quarter.
Amazon Web Services has a global market share of 33%, followed by Microsoft Azure (13%) and Google Cloud Platform (6%), according to figures by Synergy Research Group from August 2018.