The money is coming in for the big three, but can we actually tell who’s doing well?
The cloud market is growing and the big three are raking in the money as a result.
Amazon, Microsoft, and Alphabet all filed their financial results and it’s clear that there is a dominant market leader in the shape on AWS, but Microsoft isn’t giving up without a fight.
Amazon said that its AWS revenue grew 43% to $3.66bn in Q1 up from $2.56bn in Q1 2016. Operating income grew 48% to $890m and expenses for the quarter hit $2.77bn, up from $1.96bn in Q1 2016.
This is an exceptional growth rate, although it is a decrease from the 69% growth AWS filed in the year ago period. Some concern might be that this is the seventh quarter in a row that AWS has posted lower growth figures that the year-ago period, but it can be argued that it is more difficult to grow a large organisation than a small one.
Microsoft, the real main challenger to the AWS cloud throne, lists its financial results for Azure into the Intelligent Cloud division, which includes other servers and cloud services, which does skew the results a bit.
In total the unit grew by 11% to 6.8bn and said that Azure’s sales jumped by 93%. This is extremely impressive, if a little like staring into murky waters to try and see your true reflection. The problem is that no one truly knows how well Azure is doing apart from that it’s signing up customers.
The company also reported that its full Commercial Cloud business has an annualised run rate of $15.2bn, which is again a little murky because it also includes the juggernaut of Office 365 and not just Azure infrastructure.
Alphabet’s Google Cloud Platform is still well and truly in third place when it comes to the market. Although Diane Greene has done a good job in playing up the cloud’s importance to Alphabet/Google, the company didn’t mention the business in its earnings.
Google’s dominant source of revenue in Q1 is still advertising, with $21.4bn of the total revenue in Q1 being $24.5bn. This does show that sales outside of advertising rose by 50% to $3.1bn and we can assume that a lot of that has come from new cloud clients, but until Google breaks out the figures separately we are back to staring into those murky waters.