After making some predictions last month about Q2 growth rates and revenue figures for several Cloud Wars Top 10 companies, I need to share my projected numbers versus actual results so you can decide whether I have a clue about what’s going on in the greatest growth market the world has ever known.
Here are the results, comparing my predictions in columns 2 and 3 versus the actual results in columns 4 and 5:
Company | Projected Q2 Cloud Growth | Projected Q2 Cloud Revenue | Actual Q2 Cloud Growth | Actual Q2 Cloud Revenue |
|---|---|---|---|---|
|
Microsoft |
29% |
$25.2 Billion |
28% |
$25 Billion |
|
AWS |
33% |
$19.7 Billion |
33% |
$19.7 Billion |
|
Google Cloud |
39% |
$6.43 Billion |
36% |
$6.3 Billion |
|
SAP |
24% |
$3.13 Billion |
34% (24%cc) |
$3.12 Billion |
| ServiceNow |
26% |
$1.68 Billion |
25% |
$1.66 Billion |
|
IBM |
17% |
————- |
18% |
$5.9 Billion |
Let’s take a look at each company. The point is not so much to rehash the past — I mean, the numbers are right there for the world to see — but rather to get a sense of future momentum in this extraordinary market.
#1 Microsoft (#1 on the Cloud Wars Top 10)
The strong dollar dragged down Microsoft’s commercial cloud growth rate, which in constant currency was an excellent 33%. I point this out not to try to undercut reality but rather to show the high-scale impact of the ongoing foreign-currency exchange dynamics. The company said it will monitor expenses even more closely than usual, but also said that major customers are signing up for cloud deals that are both bigger in dollar volume and longer in duration.
As for my prediction versus reality, I’m pretty happy with my call on Microsoft.
#2 AWS
The Amazon cloud powerhouse continues to put up outstanding numbers under CEO Adam Selipsky, who’s been running the AWS show for about 15 months.
As for my prediction, well, everybody gets lucky once in a while, I guess….
#3Google Cloud
Slipping under 40% growth for the first time since parent Alphabet began breaking out Google Cloud numbers about 18 months ago, Thomas Kurian’s company still posted very strong numbers and holds its coveted spot — at least until Oracle reports its fiscal Q1 results in about 4 weeks — as the world’s hottest major cloud provider.
On my prediction, I expected Google Cloud to slip under 40% growth but clearly did not set my expectations appropriately.
#5 SAP
This one’s a little tricky because since SAP is based in Germany, it did not face the severe foreign-currency headwinds that US-based companies did. That’s why I’ve included both its formal growth rate of 34% but also the constant-currency growth rate of 24%, which SAP executives referred to several times on the company’s earnings call.
So, I believe my Q2 predictions for SAP hold up pretty well.
#7 ServiceNow
CEO Bill McDermott was his typically bullish self throughout ServiceNow’s Q2 earnings call as well as on a 1:1 call with me shortly thereafter. While ServiceNow did not hit its customary growth rate of very high 20’s or even 30%, McDermott expressed full confidence that the company’s growth trajectory is on or ahead of target.
My predictions for ServiceNow hold up pretty well.
#10 IBM
I was pleasantly surprised to see IBM come in with 18% growth in the cloud for Q2 — and the corresponding constant-currency figure was a very strong 24%. Within the overall cloud business, the cloud-revenue growth rate within IBM Consulting was an outstanding 29% and underscores the huge strides CEO Arvind Krishna is making in overhauling the company to be easier for customers to deal with.
My Q2 cloud prediction for IBM did not include a revenue projection because of the accounting gyrations involved in the spinout of Kyndryl.
Overall Report Card
It’s always tricky to grade yourself, and in my case, it’s particularly tricky because I was the woeful victim throughout my school days (daze) of teachers who dished out grades based on my actual work rather than on what I hoped I would get.
So, who knows — maybe I’m trying to make up for that now as I give myself a B+ in forecasting the latest episode in the Greatest Growth Market the World Has Ever Known.
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