In today’s Cloud Wars Minute, I share what I expect to see for Microsoft, Google Cloud, and AWS as Q3 earnings results come out over the course of the next few weeks.
Highlights
00:21 — I want to take a look ahead at the growth rates and overall Q3 performance for Microsoft, Google Cloud, and AWS. All are sort of lumped into the category of the hyperscalers, and I think Oracle legitimately now belongs to that group, although they’re all very different companies.
01:06 — First, Microsoft, my projection is that for Q3 Microsoft’s cloud business will grow 21% to just over $31 billion; phenomenal for a quarter. Google Cloud, I think for Q3, is going to grow 27%, for a revenue of about $8.75 billion, second only in growth rate to Oracle.
02:09 — AWS, I think, maintains that Q2 12% growth rate for a revenue of $23 billion for Q3. That incredible revenue base of $23 billion, that 12% growth in any other business would be considered phenomenal here, it’s kind of so-so. But it would mean that its moderation in its growth rate has declined, that it’s hit bottom.
03:13 — The big question is, can AWS make the flip into software? Microsoft and Google Cloud are world-class, high-powered, very deep, strong software companies. I just don’t think AWS has yet shown that it is in the category of these two, and certainly not in Oracle’s category, as far as a modern enterprise player that has the digital and artificial intelligence (AI) software tools to take companies into the realm of digital business.
04:30 — It’s an example of the innovator’s dilemma. AWS did so well, it was so strong, in some ways dominating cloud infrastructure, that it perhaps didn’t move as quickly into the software areas where some of these other companies can come from.
