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In today’s Cloud Wars Minute, I dive into the latest Q3 results from the top three hyperscalers—Microsoft, AWS, and Google Cloud—to analyze their growth and the shifting dynamics in the cloud market.
Highlights
00:14 — In Q3, the three biggest hyperscalers reported $77.8 billion in revenue. Within that, if you take incremental growth from Q2 to Q3, there was new growth of $4.3 billion. I thought it would be interesting to see what percentage of this total each company had and how much of this new business from Q2 to Q3 each of those three companies took.
01:33 — Microsoft has exactly 50% of this $77.8 billion total, and it came in real close to that with 48.8% of the new business—though not quite as strong as its overall total. Then look at AWS. Of the total revenue of $77.8 billion, AWS took 35.3% of that. But of this new business from Q2 to Q3, that percentage fell to 27.9%. Google Cloud had 14.7% of the total, but when it comes to this new incremental Q2-to-Q3 revenue growth, Google Cloud grabbed 23.3% of that, much higher than their overall total.
02:28 — That signals a company on the upswing, with a lot of momentum, a lot of customer interest behind them. Now, I will admit that, of course, these numbers and ratios and proportions can fluctuate quarter to quarter, and I’m not saying that these figures and these ratios are going to hold for the next year or two. But they certainly are in place right now.
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03:30 — I think companies are not just shopping around to see, “Who can I get the best cloud deal from?” Instead, companies are saying, “Hey, if I want to become or remain a leader in my field or move up and become more prominent, I have to have superb cloud and AI technology. Who are the right companies to do that?” These numbers show that Google Cloud is the hot company.
04:19 — Again, we will see. I’ll watch this over time. I want to say something quickly, too, about the fourth hyperscaler, Oracle. It just is nowhere near as big as these other three companies, and the growth rates were just — or the percentages, based on these numbers — would just be too small, so I don’t think that’s where Oracle’s strength is right now.
04:58 — But very clearly, the massive growth Oracle is undergoing in remaining performance obligation (RPO) last quarter — up 53% to $99 billion —shows that Oracle has a massive pipeline coming, and not too far into the future. I think as I do these quarterly updates, I will include Oracle when the numbers are significant enough.
